to Thailand. When products come fromcountries such as Thailand and China, thereare concerns that the cosmetics are mixedwith other products. I also believe this istrue. Even though it’s more expensive toimport from the US, I will be able to sellthe products for a higher than usual price.It’s really easy to find people who want tobuy these brands,” she told SPC.

Although the country’s Food and DrugAdministration (FDA) takes responsibilityfor regulation, Myanmar’s market is floodedwith fake cosmetics. An FDA spokespersonsaid that five samples are required formarket approval certification and that thewaiting list is currently six months long,which may be one reason why it iscommon for products to be smuggled intoMyanmar via Thailand and China.

Schimpl said that part of the problem isthat many long established brands, such asPantene or Nivea, have long beensmuggled into Myanmar, with regulatorsdoing little to stop this black market: “Theycome in from countries like Thailand, butare not under the direct control of thebrand owners.”

Since Myanmar began to open up itseconomy, these brands are now marketedand distributed under the control of thebrand owners. “However, it is still not easyas they can’t import themselves as theyneed a local importer. Building distributionchannels is also a challenge, due to thehighly fragmented market. Furthermorethere may be parallel imports from Chinaor other countries and there are also fakes,”she explained.

Beauty and personal care majors arestarting to eye a manufacturing presencethough. Unilever opened an office inMyanmar last year and recently announcedit will manufacture locally in future, once ithas established how to cope with high land

Personal care product investors andtraders are eyeing Myanmar with a “goldrush mentality,” Marita Schimpl, Head ofQualitative Research and New BusinessDevelopment at Yangon based MyanmarSurvey Research (MSR), has told SPC.

Now that Myanmar is slowly opening upto foreign trade and investment, andinternational sanctions are lifting due toincreased democratisation, Schimpl said:“Everyone thinks they can’t miss out. In away they’re right – it’s difficult forlatecomers because people are more brandloyal when it comes to cosmetics. That said,the door is never closed when a brand has agreat product and advertising.”

And although Myanmar is considered apoor country, there are sales opportunities:“There is a lot of money, especially in [thecommercial capital of] Yangon. It’s notnecessarily that incomes have increased, butpeople are setting aside more of theirbudget because they want to look good.This is due to the influence of [widelypopular] Korean movies and the fact thatgoods are now available,” Schimpl said.

However she warned foreign cosmeticscompanies that doing business in Myanmarremains risky due to a lack of infrastructure,a weak legal framework and excessivelyhigh commercial rents, which can exceedUS$20,000 a month for one industrial unit.She stressed that “there are still so manyareas where clarification is needed on theforeign investment law”.

A law passed in 2012 allows 100%foreign investment in Myanmar basedbusinesses for the first time, however forcompanies bringing goods into the country,a local importer is still required. That said, alocal distributor is not required. And theresearch organisation chief noted that, withthe exception of neighbouring Thailand’sMistine brand, foreign cosmetics companiesprefer working with a local partner due tothe fragmented nature of the market.

Schimpl said that China and Thailand arethe dominant countries importing cosmeticsto Myanmar. South Korea and Japan are alsoleading western brands in commandingBurmese sales, with the exception ofshampoo sachets, which are dominated bywestern brands – notably Pantene.Moreover, Nivea has excellent distributioninto smaller cities, being the biggest personalcare brand, and having a long establishedpresence in Myanmar, said Schimpl.

And European and US brands may wellgrow sales in future, with local consumerskeen to buy more of their products. Forinstance, Yu Yu Maw, a 25 year oldjournalist, has just resigned from her job ona national newspaper to enter the cosmeticsbusiness to sell western cosmetics brands.

“Most people in Myanmar preferMaybelline, L’Oréal and Revlon. Thesebrands are usually imported from Thailand,but I want to import directly from the USbecause people think the quality is superior

prices and an unreliable power supply.Data from the Myanmar Marketing

Research & Development Company(MMRD) has shown a consistent increasein consumer consumption year on yearfrom 2008 to 2012. The number of peoplebuying hair care products has increased by2.6% every year in the country, and saw thebiggest increase in rural areas, where theaverage increase was 3.2% every year.Interestingly, Myanmar’s rural population isstill growing, despite the liberalisationprocess, which has prompted urbanisationin Asian countries such as China. Duringthe same period, the average number ofconsumers buying body care productsincreased by 1% per year. Again, this wasmainly contributed by people living inrural areas, with an average increase of1.8%. The figures for facial skin careincreased by just 0.2%, however the mainincrease in the number of consumers wasin metropolitan areas, with a 1.3% increase.

Meanwhile, the increase in media andadvertising spend within the cosmeticsmarket grew by 77% every year from 2008to 2012, said the research company. Atpresent, the personal care products sectoraccounts for 25% of the total spend onmedia and advertising across all types ofconsumer goods. And this spending is risingfast. From 2008 to 2012, for hair care, theaverage increase was 97.5% (with a 181%increase in 2012); while for facial skin careproducts the average increase was 70.25%(an 129% increase in 2012). For body care,the average increase was lowest, at 63%,however 2012 saw a spike in spending of170%. Jessica Myint Thinn, MMRD GroupCommunications Manager, said: “We alsonote that the biggest media spender in2012 was a cosmetic product,” however shewas unable to disclose the name of thespecific company.

August 2013 SPC 17

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DEMOCRATISINGBEAUTYThe cosmetics market inMyanmar is growing fastbut obstacles remain asJessica Mudditt reportsfrom Yangon