Asean Pulse, We Bring to Light the Opportunities Awaiting the Business Sector in the Fast-Growing Economies in South East Asia

Issue 2 / Q2 2013

TRENDS THAT ARE SHAPING SOUTHEAST ASIA

EVOLVING OPPORTUNITIES THAILAND HOW DOES YOUR GARDEN GROW? UNDERSTAND WHY THAILAND IS DESCRIBED AS THE GATEWAY TO THE ASEAN BLOC

VIETNAM A FISH OUT OF WATER? WHY VIETNAM IS STILL A GOOD IDEA

MYANMAR THE TRAIN IS LEAVING THE STATION ARE YOU ON BOARD?

© 2013 Ipsos www.ipsosasiapacific.com In the second quarterly edition of Asean Pulse, we bring to light the opportunities awaiting the business sector in the fast-growing economies in South East Asia. Countries in focus include Thailand, Vietnam, and Myanmar.

You will find in this issue specific insights about the economic and social elements of these countries that will play an important role in evaluating your branding or market entry strategies.

This issue also provides a narrowed profile of each country’s consumer: their characteristics, culture and traditions, and other important influencers of their purchase behavior.

Along with this issue is a separate feature report on Thailand as the next luxury shopping hub.

CONTENTS

A Country View: THAILAND 3 Reaching the Thai Consumer 8

A Country View: VIETNAM 12 Reaching the Vietnamese Consumer 17

A Country View: MYANMAR 20

FIND OUT MORE 25

The right Figure 1: Real GDP Growth in 2012 China 7.8% choice for Philippines 6.6% Thailand 6.4% your ASEAN Indonesia 6.2% Malaysia 5.6% hub? South Korea 2.0% Hong Kong 1.4% Singapore 1.3% Taiwan 1.3%

After the ASEAN Economic Community (AEC) was agreed by political leaders, a number of foreign investors began to look closely at ASEAN and its plans to develop into one of the world’s most important economic blocs. Thailand, the second fastest growing economy in ASEAN continues to be a focus of many investors – both within ASEAN and around the world.

The growth rate of 2012 has been largely driven by government policies to stimulate the economy. These include the First Car Policy and the significant increase in the minimum wage of employees holding at least a Bachelor Degree.

But does all this mean that Thailand is ready to become the hub for foreign investment within ASEAN? Let’s look at some key areas that can help to reveal the answer.

Figure 2: Thailand & ASEAN Car How does your Production in 2012 garden grow? 2% 2% A 2012 growth rate of 6.4% firmly positioned Thailand as one of Asia’s 13% fastest growing economies. This was helped in Q4 2012, when we saw a dramatic rise of 18.9% y-o-y, driven by massive growth in the manufacturing 25% 58% sector (+37.4%). The First car policy was successful in stimulating impressive demand for new vehicles - leading to the highest sales on record, (almost 2.5 million units sold), a 70% Thailand Indonesia Malaysia increase from 2011. Thailand thereby claimed the title of the world's highest Philippines Vietnam growth in car production.

The increase in minimum wage US$ 229.5 billion US$ 56.7 billion nationwide to THB 300 was a 7% key election pledge of the 8% 17% current Thai government. 10% 9% While there has been much 6% debate about the impact of an increased minimum wage, we saw a 7% increase in domestic 75% household consumption from 67% 2011 in terms of value.

Despite Thailand's NPL in Q4/2012 falling to its lowest World ASEAN (9) record in history (2.25% of total Principle manufacturing products loan - 1.94% for consumer and 2.36% for corporate), some Agricultural products business leaders and Agro-industrial products academics have expressed Mining and fuel products concern about the medium to long term impact of these Figure 3: Thailand Export Structure specific policies , specifically in relation to inflation levels and the number of non-performing loans. These are two areas to monitor closely in the near 'Thailand’s impressive economic future. performance in 2012 was not driven by domestic consumption alone; exports The only have also risen dramatically. way is up! Thailand’s impressive advantages of the ASEAN World Bank report on ease of economic performance in 2012 economic bloc and the doing business positioned was not driven by domestic opportunities that are Thailand in third place after consumption alone. There was available for exploit. This can Singapore and Malaysia, and also an amazing export be witnessed in the Agro- 18th amongst the 185 countries performance. Its exports have industrial products, where in the survey. risen dramatically over the last exports to ASEAN markets Strong government support for 5 years, with increased trade have doubled from 2009 to foreign investors; modern and among ASEAN neighbours and 2012. key driver, China. efficient infrastructure; and high quality industrial estates are Indeed, ASEAN countries now The heart often cited as the strength of the contribute around a quarter of Thai offering to foreign Thailand's total export value. of ASEAN? investors. With its strategic With the ASEAN Free Trade positioning in this Mekong Sub- Area (AFTA), which should be It is quite common to hear region and land borders with 4 fully implemented by 2015, international commentators other ASEAN countries, Thailand’s impressive Thai referring to Thailand as Myanmar, Lao P.D.R., exporters are increasingly strategic gateway to the Cambodia, and Malaysia, – the convinced about the ASEAN bloc. The June 2012 country offers a strong base for

the important cross-border Thailand import (USD) trend trade, easily reaching a 300,000 population of over 150 million. This is reflected in the trade 250,000 CAGR '07-'12 is 12.1%, and 10.0% activities among Thailand and for ASEAN (9) other ASEAN countries as 200,000 presented in Figure 4. The export from Thailand to other 150,000 ASEAN countries has grown substantially at 11.6% CAGR 100,000 from 2007 to 2012. This growth helps to illustrate 50,000 how ASEAN trade has become an important element 0 of the Thai economy. Such growth outstrips trade with other regions. Add to this the 2012 World Investment Report ASEAN (9) Japan USA EU (27) Others where Thailand ranked at 8th place (up from 12th), noting 300,000 that the country was a top prospective host economy for 250,000 CAGR '07-'12 is 8.3%, and 11.6% 2012 - 2014. for ASEAN (9) 200,000

150,000 The Destination 100,000 of Choice for 50,000 Expatriates 0

Historically, the assumption has been that Singapore Thailand export (USD) trend offers expats the best Figure 4: Thailand Trade Activities in value (USD) experience. However, even in this area, Thailand is able to make a claim for the top spot. The country was voted as the single expatriates had found the reasons for the country number 1 for the overall a long-term relationship in doing so well include low expatriate experience, Thailand. Add to this the cost of living, high quality of according to an HSBC Bank fact that a recent survey by life and standard of living, as International survey that International Living rated well as friendly local people. canvassed the opinions of Thailand as Asia's second It is not called the land of over 3,000 expats working in best retirement destination. smiles for nothing! 30 industries across 50 Then, the case for Thailand countries. The survey also becoming a regional hub reports that around 69% of starts to build up. Some of

Figure 5: Number of Tourist Travel to Thailand opportunity Number of Tourists (Thousand) not to be missed 25,000 22.0 M CAGR '07-'12 is A high-quality health 20,000 9.0 care system is one of CAGR '02-'07 is 6.0 the most important reasons that the 15,000 country continues to attract tourists, particularly to 10,000 Bangkok. The highest number of tourists 5,000 coming to Thailand was 22.0 million. It is estimated that more - than 600,000 of which 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 travelled specifically for medical treatment.

but it too is still largely Medical tourism is forecasted to A land of limited to urban areas. generate revenue for Thailand of Despite the aggressive over THB 100 billion by 2015. The tradition expansion of reasonable cost of treatment with hypermarkets and modern premium quality healthcare What we see in Thailand convenience stores like provides a competitive edge to today is infrastructure of Thailand medical tourism industry, much higher quality, with 7-Eleven and BJC, unmatched by key competitors the dramatic traditional trade remains such as Singapore and India. improvements envied by the backbone of trading many of its neighbours activities in Thailand and The cost of a heart bypass is around ASEAN. That currently accounts for around USD 130,000 in USA, but said, most of the more than half of all only USD 11,000 in Thailand, infrastructure projects are FMCG trade in value compared to USD18,500 in concentrated in urban terms. Singapore. We are now seeing areas. this sector being much more aggressively promoted by the Access to the Tourism Authority of Thailand modern trade (TAT). Hence, healthcare promises channel a great deal of opportunity for is also companies to grow their business undergoing and leverage their entry into the transformation, Thailand market for expansion within ASEAN.

Welcome to Amazing Thailand!

What we can see from all these is that Thailand has bounced back from its No. of Stores Avg dairy sales / store (THB) economic and political 9,000 91,781 100,000 troubles of the past 5 years 82,265 90,000 to turn in a performance 8,000 78,316 72,393 that most countries would 68,709 6,822 80,000 7,000 65,143 be delighted with. 6,276 70,000 6,000 5,790 5,270 60,000 5,000 4,279 4,778 Its growth rate helps to set 50,000 the bar for ASEAN 4,000 economies. What we CAGR: Avg dairy Store Sales /store '07-'12 = 9.8% 40,000 3,000 should see is the growth CAGR: Number of stores '07-'12 = 7.1% 30,000 quickening as the country 2,000 20,000 continues with its moves to 1,000 10,000 take advantage of ASEAN 2007 2008 2009 2010 2011 2012 2015. Total stores Avg dairy Store Sales /store (THB) In terms of the key factors that investors seek from Figure 6: Number of 7-11 Stores and Avg Dairy Sales Per Store FDI (Foreign Direct Investment) destinations, Thailand offers one that is both compelling and opportunity exists within the does have a fresh opportunity unique within the ASEAN Healthcare sector as well as in to persuade investors that it bloc. It could be that Thailand’s world class should be their hub from which ASEAN FDI begin to manufacturing sector. Both to launch a market expansion polarize between these sectors will continue to plan for the ASEAN bloc. Indonesia as the largest be key drivers of the Thai economy in the region and economy and will present a Thailand as the leading road to opportunities that lie economy in the Mekong outside Thailand. Sub-region. The question should not be We are also witnessing whether Thailand could important developments in become the hub for FDI within the role of local players ASEAN but rather, “why not?” within Thailand. There are As a leading trader amongst sufficient signs that the ASEAN countries, Thailand

The question should not be whether Thailand could become the hub for FDI within ASEAN but rather, “why not?”

Thailand is well known for its glorious beaches, Buddhist temples and a place for gastronomy indulgence and relaxation. The beauty we observe as the casual traveller has deep cultural roots. Understanding a few Thai cultural insights could make a difference in building success for your brand.

scantily dressed dancers perform for soldiers and “Getting along” Land of soldiers willingly pose with Thailand’s gracious and friendly tourists against their tanks for culture is at least partially Smiles photographs. rooted in its religion. Thailand is overwhelmingly Buddhist and As soon as you arrive in Buddhist tenets of compassion Thailand, you will be struck by and serenity form the core of the warm welcome you receive. the country’s social values. People smile often, speak Above all, Thais value 'getting softly and courteously to each along' and forgiveness and other, and seem to go out of compromise as means to avoid their way to make guests feel confrontation. comfortable. The smiles are

not just for tourists. Even in their work environment, Thais Most Thai TV advertising tend to are likely to punctuate their be humorous and light hearted. communication in this way. Indeed, Thailand wins more

regional creative awards for

advertising than any other

country in Asia.

Thailand’s warm culture has proven to be a bankable asset for the country, with tourism accounting for more than seven per cent of the country’s total “Sanook” gross domestic product.

In Thailand the culture of When it comes to asking sanook (fun) permeates every consumers how they feel about aspect of life, no matter how new products and marketing serious the context. concepts, Thais tend to rate new

products very highly. Market Thailand’s military coups researchers have to recalibrate present a uniquely Thai Thai rating scales when example of this. Flowers are comparing results with other used to decorate tanks, countries in order to get a more

a long standing relationship Face Time with you, one should be The King careful to avoid offense or Thais strive to blend in with hurt feelings. and Thais and be accepted by their friends, colleagues, and Thailand is one of the few neighbours. They will go out of monarchies in Asia and the their way to buy products connection between the people and brands that help them gain and King Bhumibol is unique in acceptance from others and the world. are likely to want to stick to the 'safe' or accepted market The King is seen as more than leader – a potentially a ruler. He is regarded by Thais significant challenge to a new as 'father,' the people’s market entrant. protector and the government’s For example, if a department conscience. New brands face a long and store has a stall offering free arduous battle to gain mass samples of food or drink, Thais acceptance, regardless if the who try the samples will tend to product actually performs feel obligated to make a full better than what's already on purchase. the shelves. “Put a face to

“Relationships your brand” While his official role in Thais are interested in direct are important” government is ceremonial, the interaction with brands. Cable One of the ways marketers can King has been a champion for TV companies hold family fun differentiate their products is by the people during political crises. days, while consumer developing a personal His 30-year advocacy of self- electronics companies sponsor connection with the consumer sufficiency has not only karaoke contests and fashion – putting a “face” to their brand impacted public policy but shows. It is important for the or company. permeated the lives of Thais Thai consumer to have “sanook” and influenced Thais’ personal with your company and your Personal relationships act as spending habits. product – to put a face to your both binding agent and brand! lubricant for Thai society and Thai business. Thais will always prefer doing business As well as being loyal to with someone they know, over a faceless corporate entity. the monarchy, Thais are extremely patriotic. Many Thai brands, from “Kreng-jai” beer to petrol, capitalise Some of what makes personal on this patriotism by relationships important in promoting the message Thailand is the principle of that buying a particular kreng-jai or consideration for product will help the other's feelings. If someone has country as a whole. done you many favours or has

“Consumption in Beyond moderation” the City Thais are very restrained shoppers who believe in Foreign companies looking to moderating consumption. enter the Thai market have They tend to avail of bank generally focused on the loans only when really growing middle and upper necessary. Once the loan is classes in large urban centres, taken, quick repayment is on particularly Bangkok. However, top of their minds. of the 65 million people living in Thailand, just over 10 per cent On the supply side, the live in Bangkok, and the capital principle of moderation has city represents a been tapped by disproportionate share of the country’s wealth. • a vibrant local industry that has the ability to price its It is important to remember the In the up-country areas, products lower than multi- huge opportunities for brand although household incomes nationals. growth across a range of may be lower than the big • Multiple manufacturers / categories in Thailand’s less cities, so is the cost of living. marketers who have flooded developed areas. The “up- As a result, locals have level the market with lower cost country” markets may be urban of disposable income that options or rural but all have makes them attractive to • The presence of high quality experienced relatively low brand owners. export rejects or creative exposure to marketing and counterfeits. brand development. Tapping into the mass market may mean shifting one’s perception of what a Thai 'consumer product' is. Cement for example, is generally a business-to- business sale in Western countries. But in up-country Thailand, where individuals build their own homes, Seagram 100 Pipers Whisky cement is a branded While it may seem tempting for established itself as an consumer product. brands entering the Thai “honest man’s” drink for the market to associate upscale consumer after themselves with the Royal successfully building its Family and surf the wave business among the up- of their popularity, in practice country working class. this is extremely unwise and Affluent Thais were attracted locals are likely to take grave to its non-pretentious offence. In any case, any message, the opposite of company wishing to link itself which other high-end brands to the monarchy must first seem to project in their submit the proposal to the marketing. Bureau of the Royal Household for scrutiny and adjudication.

Health, family and fellowmen

A poll conducted via Ipsos AsiaBUS in March 2013 among n = 1,000 Thais. The result found that majority of Thais were quite happy, more than half were described themselves are "Very Happy" while zero percentage of "Not Happy At All"

Does or could give me greatest happiness…

Health well-being and family were top mentioned for what give Thais greatest happiness (top 2 boxes : 96%, 95% respectively). As Thais generally have high sympathy for other fellows, there is no doubt that the third rank mentioned was charity and donation or help others either time or money. (94%)

Poll conducted on Ipsos AsiaBUS in March 2013 among a total of n = 1,003 Thais in Greater Bangkok, Chiangmai, KhonKaen, Songkhla, and Chonburi via telephone interviews. Random sampling with soft-quotas among citizens aged 15-64 years old, across SECs A through E.

A fish out of water?

From being depicted as a investors. Can Vietnam up at every street corner. As “war-after-war” destination to continue as a country of choice one of the fastest growing being in the spotlight as an for doing business in Southeast countries, Vietnam benefits emerging economy, Vietnam Asia? from foreign direct investment has faced a number of chronic (FDI) inflows through its economic problems in the attractive foreign investment recent years. These resulted in A soar in foreign policies, and often-stated the caution currently reflected direct investment commitment to a liberalized by both investor and consumer economy. Despite the confidence indices. At the Although Vietnam’s GDP per decrease in FDI registration in same time, neighboring capita is still considerably recent years, FDI markets such as Indonesia, the smaller than that of other implementation has remained Philippines, and the emerging Asian’s economies, the country stable at 70% since 2010. Myanmar have received witnesses a vibrant economy increasing attention from global with small businesses springing

Vietnam FDI (2000 – 2012) 80,000 400%

70,000 350%

60,000 300% 50,000 250% 40,000 200%

30,000 150% (%) Growth FDI FDI Value (US$ mn) (US$ Value FDI 20,000 100% 10,000 50% 0 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 FDI Registration (US$ mn) FDI Disbursement (US$ mn) FDI Disbursement (%) FDI Commitment Growth (%)

Source: General Statistics Office, Ipsos (2013)

A young Vietnam Population (2012) population with a 90+ determination to 80-84 Female 70-74 Male grow (in million) (in million) 60-64 th Vietnam, currently ranked 13 50-54 most populated country with approximately 89 million people 40-44 in 2012, is forecasted to reach 30-34 96 million by 2020. Vietnam is well-positioned demographically 20-24 with an estimated 68% of its 10-14 population (60 million) in the 15- 0-4 64 year working age bracket. The Vietnamese population -66 4-4 2-2 0 22 4 66 remains the youngest in Southeast Asia with the Source: General Statistics Office (2013) distribution of different age groups’ emphasis towards the income-generating age bracket. Vietnamese love gold, but not The economy has continued to in the form of jewellery grow, in terms of GDP, forecasted at rate of 6% annually over the next five years. Vietnamese consumers are increasing their spending levels and gaining greater exposure to new lifestyle trends. What we are currently witnessing is consumers becoming more sophisticated Vietnam Gold Reserve (2012) and independent. With greater purchasing power, compared to 100% the older generation, the 18% consumption expenditure is 80% likely to increase by 30% in 2020, compared to 2012. 60% 82% A major resource in gold 40% The Vietnamese tend to store gold as a way to fight against inflation. The country’s total gold holdings could 20% range from 20 to 45 percent of the country’s GDP, considered to amongst the highest in Asia. While official 0% reserves at the central bank are largely insignificant, most of the gold holdings are maintained by private individuals. With over 400 tonnes of gold being estimated Gold Jewelry Gold Bar in private sector and billions of US dollars circulating outside the official regulatory system, Vietnam has a Source: World Gold Council (2012) major financial resource that has not been explored and used effectively for other sectors in the economy.

The “J Factor” manufacturing facilities. Japan Good Morning, has been most active in One of the things that has courting the governments of Vietnam! dominated both the front page South East Asia, where it and business pages of the already has significant levels of Whilst much of the last year newspapers last year has been investment and strong local has understandably been the ongoing tensions between businesses. Vietnam, with its dominated by talk of Japan and China, which young, smart, and large Myanmar, sparked anti-Japanese population has many Vietnam remains one of the demonstrations and also attractions for Japan. It is strategic destinations within boycotts of Japanese products. widely expected that Japan will continue in its efforts to woo the ASEAN, which should, in Whilst this all has to be put into Vietnamese government. time, start to dwarf some of context, what is clear is that the economies that are many investors are now As we move forward, expect to currently ahead of them on looking more closely at how see Japan’s support for the the curve. With a projected they can balance any risks Vietnamese economy to grow population approaching 100 connected with their and a subsequent increase in million, the country not only investments in China. South the level of FDI from Japanese offers an excellent base for East Asia, specifically companies. Evidence of this investors seeking to Thailand, Indonesia and was seen recently when the manufacture for export, but it Vietnam being the important newly elected Japanese manufacturing bases, offers premier chose Vietnam as one also has the potential to investors an alternative, of the countries to visit on his transform into a thriving credible base for their first overseas trip as premier. domestic market that will lead demand for certain products and services within ASEAN – both for B2B and B2C. Vietnam still has a very bright future and a potential that is still only just starting to take shape. Goodbye, Vietnam? Far from it!

Rich Cultural Fast facts

Diversity Politics: Vietnam is a one- party Communist state; it Vietnam is composed of multi- became unified in 1975 after ethnic groups with vivid cultural 3 decades of war. elements unique to one another. The "Kinh" people (or Economy: It is a major "Viet") account for nearly 90% manufacturing centre; it is of the population. Other major the second biggest supplier ethnic groups include the Tay, of clothes to the US. Thai, Muon, H'Mong, Dzao, and Khmer. Yet, there are Getting Up Close Vietnamese are considered “one of the most curious and Personal people” in the world. They are adventurous in trying out new Vietnamese have a distinctive brands. lifestyle. The desire to achieve harmony in their interpersonal They can easily try products connections outside the family and services that their family group remains their priority. A and friends are using. This typical Vietnamese is more additionally explains why concerned with status, for referral and peer pressure instance, obtaining social helps to drive the buying standing and education, than behavior of this market. with wealth. They live a “gang-related people“ lifestyle. They are likely 54 more minority ethnic groups to imitate what they see and living in the country. Each hear from others, especially in ethnic group’s customs and terms of approaching traditions contribute to something new. Vietnam’s rich cultural diversity.

Vietnam’s population displays almost an equal ratio of men and women. About 70% of the It is the Vietnamese’ cultural population of Vietnam lives in values that describe what they rural villages while the other 30% reside in cities. believe to be good, right, and

Different from other Asia Pacific desirable. nations, the population is beginning to enter “golden If you want this market to embrace population” (where the work you, you have to sneak into their force is larger than the number of dependents) and the number culture curtain first. of the single-person households in Vietnam is increasing.

HE says Foreign chills Vietnamese customer. The preference for foreign brands In Vietnam, culture and The Vietnamese are fond of has long existed in Vietnam. beliefs greatly affect purchase anything foreign: 77% of More so, increasing behavior. Vietnamese love foreign purchasing power resulting brands, while the average in from the country’s economic This can be seen in the way Asia is 40%. There is greater development means greater family purchases are typically opportunity for new products accessibility to premium determined by the husband or in Vietnam if they come with products and services. the father’s preferences. In established brand this patriarchal system, the awareness in the Likewise, the newly emerging husband is seen as the head international scene. affluent classes in Vietnam of the family and tends to be want to establish themselves the primary income earner for A foreign brand known as connoisseurs of fashion the family. through word of mouth, and use the ownership of promotions, and advertising foreign brands to show off The immediate family in are more appealing to the their wealth and status. Vietnam typically includes the husband’s parents, their grown sons’ spouses and children – that is three generations under one roof. Purchase decisions can be quite complex for the head of the household.

“phong thuy” One tradition that continually impacts the Vietnamese life is geomancy or feng-shui. Known as phong thuy to the locals, this is the art and science of living in tune with the environment. By following phong thuy guidelines, Vietnamese believe that they will be offered the best options in life. This affects purchase decisions for home items and many other life decisions.

Vietnamese consumers tend to prefer imported U.S., Japanese, Korean, and European brands over Chinese products and those made locally even if they are foreign brands.

Despite the mentioned Cuisine is a strong point of aggressive commonality among difference among the the people of Vietnam, cultural regions of Vietnam. differences between the country’s regions (northern and • Northern Vietnam is southern) should be carefully considered as the considered in the development cradle of Vietnam of your marketing platforms. civilization. Many of This is because the association Vietnam’s most famous

of foreign goods with higher dishes (suchphở) Northerners tend to view quality – regardless of the facts originated in the North. themselves as more formal and – is very strong in their minds. refined. They are more • The South’s cuisine has concerned about status & It is for this reason that many been influenced by the appearances and are more prestige foreign brands have cuisines of southern conservative and afraid of entered the market Chinese immigrants. change. successfully. Famous ones have enjoyed an annual growth • Central Vietnamese rate of 30% in the Vietnamese On the other hand, Southerners cooking, due to its royal market. are generally more dynamic, setting, uses many side direct, and more free in terms dishes and “garnishing”. of using their money. There are also linguistic differences in Vietnam, especially in terms of Vietnamese consumers tend to phonology. Among the three main accents of the prefer imported U.S., North, Central, and South, the Northern and Southern Japanese, Korean and accents are more intelligible to speakers from European brands over Chinese either region. products and “made in But, strangely, the Central Vietnam” products. accent is often unintelligible to both Northern and Southern speakers.

"Myanmar's land Geographic mass is roughly the size of Britain and crossroads France combined and shares borders with Since the days of the British 40 percent of the Empire, Myanmar has always world's population". been seen as a strategic prize. Myanmar's land mass is Consumer roughly the size of Britain and France combined and shares market borders with 40 percent of the world's population (2.8 billion What’s at stake is one of the people). Sandwiched between last big untapped consumer the world's two up and coming markets. Myanmar today has economic stars; India & China some of the world’s lowest and touching Thailand, Laos & levels of internet and cell Bangladesh, Myanmar is also phone penetration, as well as endowed with a long coast line underdeveloped roads, ports, that connects the Indian hotels, hospitals, schools and shipping lanes with the Straits electricity. of Malacca, one of the world's The recent lifting of economic busiest shipping lines. restrictions means that every industry starts at a clear level In ASEAN, after Indonesia, playing field. Already global Myanmar is the second largest giants such as Coca Cola, country in the 10-member Pepsi, Unilever and Nestle are association. With a population making their presence felt. of approximately 61 million people (24th largest in the world), 70% is within working age (15-65 years) and are hungry to prove themselves. Couple that with an abundance of natural resources and fertile agricultural land, Myanmar has all the ingredients to be the next ASEAN Tiger.

Myanmar, a country rejoining the world economic stage is one of the last commercial virgin markets left in the world for new business opportunities and first mover advantages.

As investment and business ventures pour in, the big question is, who will be left out in the cold because they waited too long on the sidelines?

What should I potential that could power Dawei special economic zone Thailand, Malaysia & Indonesia and deep sea port, an invest in? combined. According to the ambitious project partnered Asian Development Bank together with Thailand, serve The new Myanmar Investment (ADB), there is a hydroelectric as a land bridge for cargo to law was released in 2012 power generating capacity of South Asia bypassing the aimed at making the country 100,000 megawatts (MW). Straits of Malacca. When it is more investment-friendly and Myanmar's current power grid is completed, it is expected to up till February 2013, the at approximately 3,000 (MW). save up to 10 days transit time Myanmar government has Myanmar also has huge natural for shipments. registered a total of USD gas resources, an estimated 42,095 million in 465 million metric tons of coal and considerable geothermal A very green potential. garden It’s all about Fantastic investment opportunities exist for

the zoning modernizing agribusiness in Myanmar as it is primarily an Three flagship special economic foreign direct investment agricultural economy with zones have also been commitments. Eighty-five per almost 40% of its GDP coming established. In Rakhine state, cent of this is in the power, oil from agriculture. the Kyaukphyu special and mining sectors. China & economic zone & deep sea port, Already there have been Thailand are Myanmar's being mainly financed by China, investments from New biggest investors, together will serve as a direct land route Zealand to upgrade the accounting for nearly 50% of to southern China for container country's dairy sector all FDI. shipments to China by rail and Myanmar was once the world's road. largest producer of rice, a goal which it strives to attain again Power A 771 km long oil and gas one day. pipeline connecting Kyaukphyu generation and Yunnan nears completion. In Yangon Division, the Thilawa potential special economic zone, headed Searching for by Japan, will mainly be From the four main rivers that focusing on high tech industries. flow through the country, there “authentic” In Tanintharyi division, the exists enough hydroelectric Asia! With an increased influx of businessmen and tourists, Economic Outlook there is now a shortage of hotel rooms in Myanmar and The International Monetary Fund (IMF) has predicted there are many international a GDP growth rate of 6.3% in 2013 due to the inflow hotel brands already branding of foreign investment. The ASEAN region as a whole their marks into the is expected to average around 7.9% GDP growth. landscapes of Yangon, The IMF has noted that inflation has declined rapidly Mandalay and Nay Pyi Daw. and should be around 6% in 2013. While many of these new properties are not expected to

be online until 2015, there is Healthy also a market for boutique Planes, hotels. However, according to Growth! the new Myanmar Investment trains…but Laws, 3-star hotels or lower can be operated only on a first some Quality healthcare in Myanmar joint venture basis with a automobiles has still plenty of room to grow. Myanmar company. Many foreign hospitals (mainly from Thailand) have already A new Yangon city 30-year Myanmar's automotive set up partnership agreements development plan is currently industry is also getting a with local private hospitals being drawn up in co- spurt of growth as the where patients are sent to the operation with the Japan relaxation of import correspondent hospital abroad International Construction regulations could mean traffic for treatment. The fact that Agency (JICA). clogged streets. In many Myanmar citizens fly to A USD 300 million downtown Yangon, this is Thailand for medical checkup Vietnamese investment in a now a common sight. There means there is a gap for downtown Yangon exists many opportunities for investment. Exciting Commercial Complex and two Automobile and related opportunities exist for government housing projects industries such as pharmaceutical medicine and valued at USD 580 million are Automobile maintenance and equipment providers. care because of this. two examples of up and coming projects. Myanmar's construction industry including the HVAC market is set to boom.

The energy buzz As Myanmar develops its electrical grid, the government is also implementing programmes such as Solar Energy as an alternative power source to places where the national electric grid cannot reach yet.

It’s good to talk! Myanmar's upcoming tender to auction for 4 telecom licenses has attracted huge interest from over 90 companies worldwide submitting their notice of interest. The government has laid an ambitious plan to substantially increase mobile phone penetration rate to 85% within three years.

Where is the final frontier? When it comes to the Far East, the current thinking seems to be that Myanmar is indeed the final frontier for the business community. What we have seen last year is a scramble of many companies to secure a place amongst the first movers. But the country offers a perfect opportunity for investors with a long term strategy and there remains a huge amount of untapped potential.

ASEAN Pulse is published on a quarterly basis by Ipsos Asia Pacific. Research content in this issue was contributed by Ipsos Business Consulting and Ipsos UU (Qualitative Research Specialists).

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© 2013 Ipsos Ipsos is the only leading independent market Working both on a global scale and in local research company controlled and managed by markets, our expert teams give our clients the research professionals. In October 2011 Ipsos benefit of high value-added business solutions acquired Synovate and the combination formed including qualitative, forecasting, modelling, the world’s third largest market research firm. market knowledge and consumer insights.

With Synovate we not only acquired a company, Ipsos is committed to working with clients to but embraced a team of talented people with identify the right solutions to their specific ideas, expertise, and approaches who greatly challenges. It is a belief that enables us to ask and enrich our environment and our partnerships. probe, to subject our hypotheses to rigorous Ipsos and Synovate are two research agencies analyses and, finally, to deliver reliable data and with shared values, with huge amount of synergies the most effective recommendations in the shortest and a sound understanding of our industry. possible time. It also inspires us to innovate, initiate and continuously improve to meet the For our clients this translates into more and more challenges our clients face. varied research possibilities. Our talented professionals are working together to implement a And with only one aim: providing our clients with widened portfolio of analytic solutions, leverage an the best service, using qualitative or quantitative advanced operational infrastructure and offer a methods, at local, regional, and international deeper level of insight in more countries than ever levels. We go beyond the numbers to identify a before. course of action that will lead to stronger market results. Our shared ambition: to make market research a primary means to understand contemporary Our goal is simple: to be our clients’ preferred society and economy. And to make Ipsos a research partners in our areas of specialisation. strategic partner for those who wish to better understand the world and play an active part in it More About Us with lasting success. Founded in France in 1975, Ipsos now has around One activity, six specialisations 16,000 employees with offices in 84 countries. Ipsos has the resources to conduct research Our activity consists of asking the right questions wherever in the world our clients do business. of the right people. It also consists of observing, listening and analysing; this is what our experts in Ipsos has been listed on the Paris Stock Exchange qualitative and quantitative research do every day. since 1999 and generated global revenues of Ipsos implements this know-how allied with new €1,363 billion ($1.9 billion U.S.) in 2011. technologies in its six specialisations – advertising, customer loyalty, marketing, media, public affairs Visit www.ipsos.com to learn more about Ipsos’ research, and survey management. offerings and capabilities.

We explore market potential and market trends. We test products and advertising. We help our clients build long term relationships with customers. We study audiences and their perceptions of various media and measure public opinion trends around the globe.