Inroads to a growing market
Apr. 13, 2017
Newsroom Tokyo looks at Japanese businesses operating in Myanmar. It's been about a year since Aung San Suu Kyi's party took power. The country is still struggling with issues related to its ethnic minorities and is seen as slow in implementing political and economic reforms.
But at the same time, expectations have been high for the country's growth as sanctions were gradually lifted. Now, China and Singapore have a big share of the investment and Japanese businesses are playing catch up with them.
Around 360 Japanese companies are now operating in Myanmar. That's more than 6 times as many as in 2011. Newsroom Tokyo explores their business activities in the country.
Construction is booming in Yangon, the economic heart of Myanmar.
Shopping malls, resort hotels and other big projects are springing up all over.
All this activity has attracted the interest of Japanese companies. They're speeding up their expansion into the 51-million-strong Myanmar market.
Two years ago, the Myanmar government set up a special economic zone. It’s aggressively pursuing foreign investment.
One company from Osaka sells Japanese steel.
Last autumn, it built the first full-scale steel processing plant in Myanmar.
It processes steel imported from Japan for any number of projects, such as buildings and bridges.
Quality control is a top priority. The workers carefully measure the length and thickness of the sheets.
Not even a smudge of oil escapes their notice. It's a safety issue. There's a chance it could catch fire during the construction work. The company hopes to win the trust of clients by offering superior products, and thus gain new customers.
“Because the country’s economy has grown so much, steel will be in great demand for new infrastructure," says Yoshiyuki Morita, Managing Director at RK Yangon Steel. "I think this is our biggest chance at the moment.”
Meanwhile, others are going online to create new business opportunities. Kazutaka Shintani is the president of an Osaka-based online retailer.
He set up a site in January. Such things are still something of a novelty in Myanmar. There are more than 100 products on the site, including fashion items and cosmetics.
Shintani says, "This online shop will suit the needs of the people of Myanmar. I’m confident that we can offer good service."
Shintani has been paying particular attention to the growing use of smartphones as a business opportunity.
As recently as 3 years ago, only 10 percent of the population had a smartphone; today, that number has climbed to 90 percent.
Young people are also branching out in fashion.
Traditional styles revolve around the longyi, a wraparound cotton cloth worn like a skirt, while cheeks are commonly adorned with a cosmetic called thanaka, a paste made from plants.
But recently, such things have given way to Western skirts and pants. Young people are buying them up in an ever-greater number.
One says, "I spend most of my salary on fashion. About 80 percent."
Shintani takes advantage of his local employees’ connections to get more sellers on his online store. They visit a traditional longyi shop.
A salesperson there tells them, “We have stores that sell cosmetics and cotton products; there are more than 100 items on the website.”
The salesperson pitches the site by pointing out its special advantage: because it carries a wide variety of items, shoppers who come looking for one thing easily come away with more. The salesperson also underlines what a breeze it is to get started. It's enough to reach an agreement on a contract.
Shintani also has other ways of attracting new users. The streets of Yangon are often choked with traffic. His company gets around this by making deliveries by bicycle.
"If you go out to shop, the traffic’s awful," says one customer. "This service is very convenient, because they deliver to our home or office.”
Shintani hopes to expand his services nationwide. He says, "We could be very successful if we try, because there are still many business opportunities."
Many Japanese companies entering the market are encouraged by, among other things, the pool of eager young workers.
Mitsuru Nishigaki is a Managing Director at Japan SAT Consulting. He has trained many young people and introduced them to Japanese companies.
Every year, about 200,000 people graduate from university. But there are still very few jobs in Myanmar that require advanced skills.
Reportedly, only about 10 percent of graduates land a job immediately.
Sizing up the situation, Nishigaki founded a Japanese-language school 4 years ago.
His idea is to groom young, highly educated people for jobs at Japanese companies.
One class teaches business Japanese. Its rules are strict to help the students get used to Japanese business customs. Last year, Japanese companies hired about 1,000 young people in the country. Nishigaki hopes to see this number go up.
Nishigaki says, "There are so many excellent young people in Myanmar, but unfortunately not many job opportunities. Japanese companies are looking for talented people just like these young graduates. I launched this project because I wanted to match them up."
NHK Osaka station's Neil Kato joined Newsroom Tokyo Anchors Sho Beppu and Aki Shibuya in the studio. He went to Myanmar for this report.
Beppu: Some say the economy in Myanmar is not in as ideal shape as it should be. Why are there so many foreign companies, what are they telling you about the situation?
Kato: People at the companies I've interviewed said the country still lacks necessary infrastructure, and there are headaches over changes in legal and business procedures. Despite this, Japanese firms are taking the initiative to get businesses off the ground in Myanmar. They see huge potential for its economic development.
Shibuya: So the young people there seem very serious about learning Japanese. But many people say the Japanese language is difficult. It's popular in Myanmar?
Kato: That's right. I met a lot of people who said they wanted to study Japanese more than any other foreign language.
Actually, Japanese grammar is similar to the grammar of their language. Also, many people want to learn Japanese because it helps them get a job at a Japanese firm.
Japanese firms like to hire such people because they tend to be serious and hard-working, and share similar values.
Beppu: I also understand that the young workforce in Myanmar is very attractive for Japanese business because here in this country we are facing a workforce shortage.
Kato: Yes. Mr. Nishigaki, who was in the video, not only refers young people to Japanese firms there, but has already started dispatching them to companies in Japan.
He makes sure that Japanese managers who plan to employ people from Myanmar actually visit the country to meet them and their families. Myanmar's economy is growing fast but the living standard hasn't improved so much yet. He wants Japanese managers to understand the feelings of young people who come to Japan, as well as their families, to help build good relationships.
He also wants the young people to take what they learn in Japan back to Myanmar. He hopes they will take leadership positions to guide their country's development.