Tuesday September 18, 2012
Parkson ventures into Myanmar
SINGAPORE: Seven years after entering Vietnam, South-East Asian department store owner Parkson Retail Asia Ltd is battling headwinds, but that isn't deterring it from expanding into Myanmar in search of growth.
Singapore-listed Parkson, which has 54 stores criss-crossing Malaysia, Vietnam and Indonesia, was one of the first to enter the Indochina market, and now hoped to apply some of the lessons learnt from Vietnam to Myanmar, where it expected strong consumer spending and economic reforms.
“We are dealing with a country with a huge population and very little services provided. Retail is still very much, compared to neighbouring countries like Vietnam, in the backwaters,” Parkson's group managing director Alfred Cheng told Reuters.
Parkson competes with regional players such as Robinson Department Store PCL, AEON Co Bhd and Ramayana Lestari Sentosa Tbk PT, but is the largest player in Vietnam.
Comparing his experience in Vietnam, Cheng expected Parkson to see double-digit sales growth in Myanmar in the first four to five years, potentially in the 20% to 30% range.
Parkson's early years in Vietnam could give it an upper hand in understanding consumer spending trends in Myanmar a similar emerging market, Cheng said, adding that many businesses in Myanmar were already familiar with Parkson due to trading activity between the two countries.
Although Cheng conceded that Myanmar was not ready for a full-fledged department store now, it planned to open a relatively small one at 40,000 sq ft in Yangon before March 2013 to test consumer behaviour and train local staff. After years of isolation, resource-rich Myanmar has sped up policy changes, prompting companies to express interest in investing in the country. Reuters