NAYPYITAW, Myanmar--Rival western firms rushing to tap Myanmar's potential may be asking, "Is this place big enough for the both of us?"
A flood of major international companies are planting a flag in the Southeast Asian nation, where years of isolation have left the country bereft of the sort of global brands that are household names almost everywhere else. With a population of more than 60 million people, that means Myanmar is ripe with potential.
Often, though, the global firms are quickly coming up against fierce competitors they know well from other parts of the world.
"It's like China 20 years ago. The pressure is on," said Hellmut Schutte, dean at the China Europe International Business School and a delegate at the World Economic Conference in Myanmar's capital Naypyitaw this week. "There are few greenfield options like Myanmar left, so multinational companies have to get there first."
Even though people in Myanmar cannot yet own a credit card, competition between MasterCard Inc. (MA) and Visa Inc. (V) to establish a beachhead here is "aggressive" and "enthusiastic," said Matthew Driver, MasterCard's president for Southeast Asia.
At the moment, almost all transactions in the country are in cash and only a few hundred vendors--mostly restaurants and hotels that service tourists--accept international cards. Neither Visa nor MasterCard has a permanent office or any employees in Myanmar. But they are each striving to build crucial relationships with the local regulators and banks as they jostle for position. They are also both rolling out branding activities. In Naypyitaw, a giant billboard advertises MasterCard services, even though local people cannot yet use them.
A battle is also bubbling in soft drinks, where Coca-Cola Co. (KO) and PepsiCo Inc. (PEP) are slugging it out to offer the fizzy beverage of choice. Coca-Cola this week announced a $200 million investment in Myanmar over the next five years, and became the first American brand to start manufacturing its products locally since most American sanctions against Myanmar were lifted a year ago. Coca-Cola's event was attended by former Secretary of State Madeleine Albright and featured a performance from local pop-stars.
PepsiCo does not have manufacturing operations in Myanmar yet, even though like Coca-Cola it has teamed with a local partner to distribute their products. Still, this week, PepsiCo CEO Indra Nooyi was a prominent ambassador for the brand in the country, as she co-chaired and spoke at the historic WEF event in Naypyitaw.
While western brands have been mostly excluded from Myanmar, the market was not a complete vacuum prior to the country's recent efforts to open up. Foreigners will compete with local brands, as well as goods from countries such as China, Japan and Thailand.
But it is not just in consumer goods that international rivals are going head-to-head.
The big four accounting firms--PricewaterhouseCoopers, Deloitte, Ernst & Young and KPMG--are also muscling in. All of them have set up some presence in the country in recent months, though KPMG was at the front of the pack when it opened up an office in Yangon in September 2012. The firm now has 15 employees in the country including 12 local staff.
"We were very keen to be the first in. We can always say that" said Bob Ellis, a KPMG partner who is based in Thailand.
Most executives acknowledge that despite the intense rivalries, the growth of Myanmar's economy in the long run should support opportunities for everyone.
American technology firms, for example--namely Google Inc. (GOOG), Intel Corp. (INTC), Hewlett-Packard Co. (HPQ), Microsoft Corp. (MSFT) and Cisco Systems Inc. (CSCO)--visited Myanmar's government ministries in a joint mission earlier this year, all set to reap from any additional investment in Myanmar's backward information technology. Jamie Harper, president for new markets in Southeast Asia at Microsoft, said he is supportive of partnerships with other technology who all stand to benefit from improvements in infrastructure.
Similarly, executives at both credit card companies, for instance, say the development of the infrastructure behind electronic payments will help both firms.
"There's a natural, innate rivalry between two brands moving into a new country," said Stephen Kehoe, Visa's head of corporate relations for Asia Pacific, Central Europe , Middle East and Africa. "But at the end of the day, we're all interested in the same things. The more we can convert people from cash [to electronic payments], the more the pie will grow."
Write to Duncan Mavin at Duncan.Mavin@wsj.com and Shibani Mahtani at Shibani.Mahtani@wsj.com
By WSJ
No comments:
Post a Comment