Myanmar as a consumer market may not have lived up to the outsized optimism that generated breathless media coverage and sent investment rushing in following its emergence from military rule and international sanctions in 2012. But outside observers should not make the mistake of thinking the market is moribund. Despite its ongoing political issues, Myanmar has a young population of 53 million consumers who are optimistic about the future, increasingly technically savvy and uncommonly open to learning about and interacting with brands.
From a macroeconomic viewpoint, people in Myanmar have good reason for their optimism. GDP grew 6.74% between 2017 and 2018, according to World Bank, which also expects Myanmar's economy to chart GDP growth above 6.5% per year through at least 2021. The median age is 27.8, according to CIA World Factbook, and 36% of the population is aged between 10 and 29.
Personal income, according to a hot-off-the-press primary research study by Kantar, has doubled in the last five years. To be precise, average monthly income among 18- to 55-year-olds rose from US$122 in 2014 to US$264 in 2019.
That burgeoning pocket money has Myanmar citizens increasing their spending in a number of categories, notably investments, travel, healthcare and household transportation, according to the research company.
Investment is coming in from both international and domestic brands, across a number of sectors, particularly FMCG and automotive, according to Simon Bailey, CEO of Humology, a mobile-first ad platform serving brands and agencies in the country.
"I was talking to a regional head of one of the largest FMCG companies," Bailey says, "and he said that Myanmar is going to be one of their key focuses moving forward, as they are seeing some of their highest sales-growth figures, not just across APAC, but globally."
Warwick Olds, founder and partner of Havas Riverorchid, which has been active in Myanmar for about a dozen years (Havas acquired the agency, which has offices across Indochina, in 2015), says the companies that came in after 2012 and have stayed the course are seeing payback.
"One thinks of companies like Unilever, like Coca-Cola, Nestle, Colgate-Palmolive, some of the telco companies like Telenor for example," he says. "They are doing the right things, and they certainly seem to be building successful businesses, on the back of good robust product offers and good marketing and good distribution."
Bailey agrees that distribution and partnerships are critical to success. "It can be tough to do business here, like any sort of frontier market," he says. "But if you've got your partners in place, at a local level, they can definitely support to build brands here."
"The country was at the height of optimism when it opened up to foreign investment. Things have simmered down, and the mood is cautious but hopeful," says Caroline Lim, managing director of Today Ogilvy Myanmar, known locally as Khin Myat Htwe. "Brands underestimate the cost of marketing here along with the expertise required. Generally, there is an overestimation in terms of the skills set while underestimating the budgets. This has led to an influx of 'me too' work which lacks insight as well as differentiation. This problem is further amplified when there is more competition amplifying the same message."
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This article is part of an ongoing series taking an in-depth look at the advertising and marketing industry in some of Asia's less well-known markets.
The future came on quickly
Due to its history of recent reforms, Myanmar is rather unique among markets, which translates to some interesting consumer characteristics. Lim says brands are not be always attuned to these, often clustering it in an 'Indochina' region together with Cambodia, Laos and Vietnam, applying the same insights to all and expecting similar results.
"Because it lived in such a bubble and a time warp for so long, from basically the 1960s through to the early naughties when it opened, Myanmar just leapfrogged into the future," Olds says. "So developments and changes that took 50 years everywhere else in the world happened in about three or four years here."
Internet penetration, for example, went from zero to over half the population in about a year when the market first opened, he says. And the market famously skipped over wired internet connections and the PC era. Mobile penetration now sits above 90% and should hit 100% by next year, according to Bailey.
"The younger generation that's coming through, they are very optimistic about their ability to access more information, learn a lot more information and to learn completely new skill sets as well," he says.
People in Myanmar use their mobiles as much as anyone else, about six hours a day—on par with global averages, according to Humology's research. But the frequency of use is lower than it is elsewhere. In other words, people tend to use their phones in fewer, longer sessions. "So what we're seeing here is definitely the mobile phone is being utilized for personal entertainment," Bailey says. "The top three categories are social media, messaging and gaming."
Facebook very much dominated early internet usage, to the point that for many people it remains synonymous with the internet itself. "But more and more people are expanding out of that," Bailey says. "What we are seeing is, people are using a broader range of apps and mobile sites, than they've ever done before." Facebook remains the key platform for marketing campaigns, but "massive growth" is taking place in other channels, which advertisers should pay attention to.
"For example, Myanmar now is the second-fastest growing market for YouTube, across APAC, just behind Indonesia," Bailey says.
None of this is to suggest the market is completely digital. "The traditional advertising market is softening, but it's certainly not going away," Olds says. TV still consumes the bulk of adspend and isn't going anywhere. "But you certainly are seeing the shift that one is seeing everywhere in the world," he says. "It's just perhaps happening a bit quicker here, again, because of this sort of leapfrog phenomenon."
Lim agrees, noting TV still reaches the largest consumer population and is still the most effective for building brand trust and credentials. "TV is still the primary medium," she says. "Social media, or Facebook, is mainly for the metro and urban areas and more for entertainment purposes."
That said, in-app advertising is developing more slowly than in other markets, as users are just starting to branch out from Facebook and explore other apps. "If you're talking about brands trying to get their apps into phones, that's sort of tough to do," Bailey says, "because as mentioned, people really see that phone as a personal entertainment device, rather than being a functional device for them throughout the day. So you're not seeing people using it for email, for example, and they're not really using it for banking. They're not really using it for getting taxis and so on. It hasn't really shifted yet to that functional space. But it will do eventually—it's just happening a bit slower than on the entertainment side."
Attitudes toward brands
In a place where brand advertising didn't really exist within the living memory of most people, Kantar's research shows that consumer attitudes toward brands are evolving. The percentage of respondents who agreed with the statement, "I like to use the brand which shows my success" increased from 47% to 62% between 2017 and 2019. The percentage agreeing that they often try new products before their friends rose similarly, from 24% to 41%. Yet at the same time, 53% of people agreed that there's no real differences between brands (up from 41% in 2017), and 43% say they never pay attention to brand names.
People in Myanmar used to watch CD and DVD compilations of ads as entertainment, Lim explains. "However, with more exposure, the audience has become more sophisticated, especially in the key markets," she says.
"It's such a young market, and they still see advertising as being a way for them to find out about new products and services that they hadn't necessarily been aware of before," Bailey says. "And if allowed to do so, we see that consumers are willing to interact with brands."
That may be underselling the tendency. Bailey mentions a recent rich-media Ovaltine campaign that garnered a 30% interaction rate. "That is, quite frankly, something we've never really seen before," he says. "I mean, it's insane." When brands run campaigns that allow interaction, they find that people are "thirsty and hungry for knowledge".
"This is all quite new for them," Bailey says. "They don't quite have that advertising fatigue, yet. It's still seen as useful and valuable to their day-to-day lives."
GAMING: AN UNRECOGNISED OPPORTUNITY
"There's huge growth in the gaming category, which takes up the lion's share of people's time spent on their mobile, and not a lot of people are aware of this because Facebook has been the go-to for so long," says Simon Bailey, CEO of Humology. "But actually there are more gaming unique users in Myanmar than there are people on Facebook."
"And it's not just the youngsters. We see a slightly higher skew towards females rather than males when it comes to total gaming apps".
In fact Humology's research says consumers in Myanmar are 50% more likely than the global average to interact with mobile app advertising. "People are open to finding out more, and they're excited about finding out about new products and services. Advertising is not yet seen as being an interruptive necessity in the consumer experience."
At the same time, reaching people in Myanmar is not all about factual, educational content. "From our experience, the consumers respond very well to branded emotional content based on local insights rather than just branded advertisements." Lim says, an observation seconded by Bailey.
The creative engine for creating that kind of advertising is still a work in progress. Many clients are still "in adaptation mode", Olds admits, although he adds that his agency is producing a growing amount of original, creative work. The talent pool is developing, he adds. "It's still early days," he says. "So, you wouldn't, in this country, see, for example, a major award-winning, famous local creative director, in the way that you would in say, Thailand, where there are dozens of them."
Recruitment and retention can be difficult, for an international agency. "It's not easy to find people who have the necessary skills or experience," Olds says. People who have the skills tend to go into business on their own, and poaching and turnover run high.
The biggest challenge for marketers in Myanmar, according to Bailey, is one that will be familiar to marketers everywhere, only in Myanmar it's even more acute: quantifying the effectiveness of campaigns.
"It's not that data-rich, particularly when it comes to linking activities through to sales," Bailey says. A deep history of retail data simply doesn't exist. So just getting a handle on sales uplift can be difficult. And e-commerce is in its infancy. The loop is tough to close.
"And in terms of investment in pre- and post-campaign research, when it comes to say, brand awareness or brand perception, people haven't been investing in that," he says. "There's little previous understanding of the market, when it comes to how campaigns are delivered effectively. The benchmarks aren't there."
CASE STUDY: A LAND BEFORE BRAND
It's well worth remembering that Yangon is, in the words of Katie Ewer, head of strategy at brand-design firm Jones Knowles Ritchie, an anomaly in Myanmar. Much of the country outside the capitol is populated by subsistence farmers for whom consumer choice and the idea of a brand are entirely new concepts. Here, Ewer shares her recent experience designing a brand for Yetagon, which provides agricultural products, services, advice and micro-financing to low-income farmers in rural Myanmar.
It's an incredibly humbling and eye-opening experience, to have your target audience be a group of people for whom the very concept of a brand is still somewhat novel, and in some cases completely alien. They don't necessarily perceive a brand to be a symbol for a whole set of values or associations. They also don't think of themselves as consumers, with rights and expectations of the company that's selling to them. If you think of a brand as a way of easily navigating between choices in a category, that whole concept is not there yet.
One of the things that we found was that our audience was incredibly literal. As designers we spend a great deal of time obsessing about achieving distinctiveness and standout in the marks that we create. A distinctive brand mark needs to be abstract to be ownable, or it needs to be engaging or clever, or to have layers of understanding. We spent a great deal of time going round and round in circles trying to find a way to encapsulaate everything that this brand stood for in a mark. And then we realized that we were putting friction into the process. We were putting barriers between the consumer and the brand by trying to build communication into a medium that really is about identification.
So in the end, we ended up with a logo that is what we call a 'see say' logo. So the brand is called Yetagon, which means waterfall, and the brand mark is a waterfall, which is good, because the business sells irrigation equipment.
As consumers of brands in a developed market, there's a hard-wired understanding that if you look at something like the Nike swoosh, that that is a symbol for a whole load of associations and stories—proxies of value. Whereas I think if Nike had been born in the fields of Myanmar, its logo might have had to be a pair of shoes.
When you go to an environment that is so essential in its nature you're forced to be essential in the way that you create a brand and bring it to life. We have to create as much impact as possible with very, very little in the way of tools. And that can remind you about what the point of all this is.
Your average consumer in say, Singapore is inundated by choice. And our primary mission in life is to get from morning to night without being paralyzed by it. So we're kind of hard-wired to ignore 95% of the commercial messages that cross our paths. Whereas in Myanmar, the commercial messages are so few and far between, and also, because we're dealing with people who've never had a brand specifically aimed at them before, that they almost can't believe that a company wants to talk to them. You can't help thinking about how that is going to change. And how quickly?
The above has been condensed and edited for clarity.