Coca Cola in Burma

Challenges in Burma:

Political and economic context

New business opportunities had to be grounded in recognition of Myanmar’s recent history. Following a coup in 1962, Myanmar had been ruled by a repressive military dictatorship. In 2010, general elections resulted in the dissolution of the ruling military junta in 2011. At this time, the country pursued political and economic reforms to modernize and develop. However, this new political and economic environment was still tentative and ambiguous and the economy remained amongst the most repressive in the world. Much of the economy remained in the hands of military conglomerates or cronies of high-ranking generals of the former regime. Unlike its Southeast Asian neighbours, Myanmar was not even listed in the World Bank’s Ease of Doing Business Index of the world’s 183 economies. State-owned banks dominated the banking system and the country lacked a proper capital market. The country also had to overcome its legacy of having one of the worst human rights records in the world.

Infrastructure

 Other aspects of the Myanmar business context posed challenges to entering the country and marketing to the population. The country faced underdeveloped infrastructure, such as low electrification levels (less than 30% of the population had access to electricityxiii) which would pose challenges for bottling and distribution. In 2012, official statistics estimated that only 9% of the population was mobile phone users. However, with the recent influx of foreign investment, this figure was expected to increase to 80 percent penetration in 2015-2016, while internet usage was expected to reach 50% penetration this same time period, according to the Ministry of Telecommunications and Information Technology. Roadways and car usage were also underdeveloped. In 2011 it was estimated that Myanmar had 38 cars per 1000 people, but had doubled in 2012. In comparison, Laos had 171 cars and Thailand had 432 cars per 1000 people. Highways and road infrastructure ranged from acceptable to poor.

 Local soft drink tastes and competitors

Traditionally, tea was the most common beverage in Myanmar. Green tea was ubiquitous and black tea and coffee, liberally served with milk and sugar, was popular at teahouses and restaurants. Street vendors sold fresh-squeezed sugar cane juice, as well as lemon and lime juices. In the stead of drinks from international brands like Coke and PepsiCo, people drank local sodas from manufacturers such as the Loi Hein Group (30% market share), Myanmar Golden Star, Pinya Manufacturing, and Happy Soft Drink Company.

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