The Myanmar Cosmetics Association (MCA) has recently made an official request to the Myanmar Investment Commission to put the industry on its radar and start both protecting and investing in the sector.
MCA wants the government to recognise the industry and its contribution to the country’s economy by implementing measures to protect the country’s many small- to medium-sized beauty players from bigger international and multinational beauty players.
Joint ventures with international players
MCA chairmanU Kyaw Minsaid in an official communication that he wants the government to step in and save these businesses from such a threat by implementing the joint venture requirements that have been made necessary for many international businesses wanting to enter Myanmar.
The move came after MIC published an official list of foreign investment restrictions in Myanmar back in April of this year.
The document was criticised when it was first unveiled for being ‘ominously broad’, but despite this allegation, there was no mention of the cosmetics and personal care sector anywhere on the list.
“We know Myanmar needs foreign investment and we welcome it in the cosmetics sector because it helps business grow,” said U Kyaw Min in an interview with Myanmar Times.
“But we want there to be joint ventures. Industry operators will not put up with 100pc owned foreign companies.”
Myanmar needs foreign investment
The second annual beauty industry expo took place in Yangon in June and is a major part of moves to attract outside investment by stressing the emerging market's potential as a space for the cosmetics and personal care industry to flourish.
The 'Myanmar Cosmetics Expo' focused on regulatory compliance, supporting manufacturers in the country to meet the legal requirement for all products in beauty categories such as cosmetics, spa, beauty enhancement and anti-ageing, and was organised by Myanmar's government body, the Food and Drug Administration (FDA).
The event was billed as a key networking opportunity for industry professionals in the country, providing workshops and summits on the registration, export, import, marketing and distribution of beauty products in Myanmar.
Market of the future
Myanmar is one of the countries recently picked out by market research firm Euromonitor International as a 'market of the future' – a list of 20 currently underdeveloped markets worldwide which, Euromonitor states, “will offer the most opportunities for consumer goods companies globally.”
The firm's analysts anticipate that the country will register a GDP growth of 8% up to 2018, fuelled by a rising number of middle class consumers – a group which is expected to double by 2020.
Beauty and personal care is one sector which has been enjoying particularly robust growth, having reached a market value of US$318 million in 2013, after growing at a steady CAGR of 14% since 2009.
“Myanmar is identified as the last economic frontier in Asia with significant growth potential,” Euromonitor's report asserts.
Hurdles
The current business environment in Myanmar, however, remains far from meeting this potential: indeed, according to the World Bank's 'Logistics Performance Index', the country ranks as one of the least attractive places worldwide to do business.
“Lack of clear trade and investment rules, corruption, high government influence on the economy and undeveloped capital markets are the main problems,” explains Euromonitor's report.
But change is already in motion, with Myanmar now implementing some of the economic reforms needed to liberalise its market.
The country is also expected to join the ASEAN Economic Community in 2018, which will remove several trade and investment hurdles, opening its markets up to develop much more quickly.