Finding right local partner key for Thai SMEs: experts

Speaking at the "Thailand-Myanmar Trade Investment Relations in the Age of AEC" seminar held in Bangkok, Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI)’s president Win Aung said that Thai investors needed not look further than the UMFCCI members if they want the experienced business partners.

“We have over 28,000 members and we closely coordinate with the Royal Thai Embassy in matching the potential partners,” said the UMFCCI president.

He added that Myanmar has an advantage in having GSP from European Union and that they stand a promising manufacturing base for almost products except arms. Among the highest potential businesses include consumer products, food industry, textile, garment, agriculture, and service industry such as tourism and education.

However, Aung asked the investors to be patient about the poor infrastructure and the legal process on financial and business laws. “We (the Myanmar government) do realise the problem as major obstacles for foreign business investors and we believe that we can solve the problem within two years.”

Michael Lim, chairman of Today Group Myanmar - a leading marketing communications and media business network - said at the same seminar that enterprises should understand Myanmar people's behaviour before selling their products in the market.

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In his view, Myanmar citizens are loyal to brands, and especially to products from Thailand, therefore Thai SMEs need to build up brand efficiency before penetrating the market.

He suggested to SME members of the audience that they should find reliable local partners for distribution, rather than relying on border traders or cronies close to those with influence among the military, as proper distributors in Myanmar can access more consumers, which helps generate healthy revenue for Thai businesses.

Apart from brands and strong distribution partners, Thai producers should maintain prices and quality in order to ensure sustainability in Myanmar, he added.

Lim also recommended that SMEs wanting to do business in Myanmar should have good logistics and good public relations, and should understand what kind of media best access Myanmar consumers. Social media has become increasingly powerful in communicating with local consumers, he said.

Manop Sangiambut, executive vice president and head of International Banking Business at Siam Commercial Bank, said that although Myanmar was a potential market for Thai operators, there were risks involved in doing business there, too. Enterprises should, therefore, have strategies in place to achieve their business goals, while at the same developing tactics to defend against inherent risk.

SCB, which has a representative office in Myanmar, sees consumer products and hotels as the first two opportunity businesses for Thai operators in the country, he said.

Consumer products are a basic business with good prospects because they do not rely on infrastructure problems in Myanmar, which still faces power-supply issues.

At the onset of doing business there, firms' financial costs should not be too high and they should have not to rely heavily on transportation, the executive said, adding that Thai operators should also consider the joint-venture model in order to reduce costs involved in renting office buildings.