Myanmar’s Retail Industry

and City Mart Holding Co., Ltd.

18th July 2014

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer
 Market
Overview

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 2
Market Overview
Starting from a low base

Myanmar Thailand Vietnam China

GDP (PPP) 82.7 601.4 299.2 11,290

In USD billion
GDP per capita 1,300 9,700 3,300 8,400
In USD
Annual income per head 900 5,000 1,400 5,300
In USD

EIU 2011
CIA Factbook 2011

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 3
Market Overview
but…with huge potential

• Large and young population (76%

of working age)

• Urban population is familiar with

brands around the region, due to
large overseas migrant workforce
(3- 5 million)

• Consumers are quality conscious

• Monthly income of USD 157 per

person in urban cities

• Consumer spending could triple

from USD 35bn to USD 100bn by
2030

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 4
Market Overview
what can be achieved…
Myanmar Consuming Class
(Income > US 10 a day)
19 million

Myanmar has Huge Potential for

Middle Class Population Explosion

2.5 million

2010 2030

Source: Mckinsey Global Institute: Myanmar’s Moment (2013)

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 5
Market Overview
1
Monthly Household Income Comparison in
Urban Cities 47% of Myanmar’s urban
population belongs to the
10 11 9 consumption class, with monthly
household income above USD
11 15 325.
23 40%
47%

65% 25
16 2

Proportion of Segment A is
32 higher Vietnam and Cambodia,
11 26
suggesting wealth is
concentrated at the top.

30
22
26
Segment A: > USD 750
Segment B: USD 500 -750
11 12 Segment C: USD 325 - 500
8
2 Segment D: USD 225 - 325
Segment E: USD 125 - 225
Vietnam Myanmar Cambodia Segment F: < USD 125

Source: TNS Consumer Market Research 2013

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 6
Market Overview
Discretionary
Total Consumer Spending (Real GDP)
Semi-necessities
100% = US$ 34 billion US$ 98 billion Necessities

2 3
6
13 Personal Items
6
3
1
Transportation, communication
2
9 14 Recreation, education & culture

6
Household products
8
Health care
10
Apparel
10 Household & utility
71

37 Food

2010 2030

Source: Mckinsey Global Institute: Myanmar’s Moment (2013)

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 7
Market Overview
Consumers’ shopping habits for FMCGs in Yangon
Wet Markets 99%
Grocery Shops 56%
Convenience Stores 30%
Supermarkets 17%
Mini marts 15%

Upper Low-
Habits by SEC Upper Middle Lower
Middle Middle
A B C D E

Wet Markets 60% 86% 95% 100% 100%

Grocery 53% 60% 61% 58% 50%

Convenience 33% 36% 34% 29% 25%
Supermarkets 40% 23% 17% 16% 15%
Mini marts 15% 15% 16% 15% 14%

MMRDRS – Consumer Index 2013 HYPERTRADE

Myanmar’s Leading Retailer

Market Overview
Estimated Myanmar Retail Universe (outlet no.)

Total retail stores in Myanmar is estimated to be over 231,000

Grocery, Convenience Stores, Fabric Shops, Pharmacy Shops and Fashion Shops are the
top 5 highest outlet types and account for 45% of total universe, especially 32% are from
grocery and convenience stores which sell FMCG and kitchen foods.
Source: Estimation based on MMRD Publication 2013

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 9
Market Overview
Traditional & Modern Trade Ratio
The Myanmar retail sector is highly fragmented with more than 90 per cent of its
business being carried out by traditional family run small stores

Modern Trade (MT) ?

• There are mostly
modernizing decoration
and usage of modern
system (especially Check-
out counters, Air-
conditioned indoors,
Computerize system, self-
services, Visual
Merchandizing, freezer etc.)
• Hypermarkets,
Supermarkets, Department
Stores, Mini Marts,
Convenience Stores, etc.

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 10
Bright Outlook for Consumer Sector in Myanmar

• GDP growth
• positive demographics ( 76% of population is working age)
• Continued Urbanization ( 33% now)
• Increasing investment in Infrastructure (roads, telecom, electricity, etc.)
• Improved rules and regulations

This will fuel these developments in the

Consumer Sector
• Expansion from chain stores
• Emergence of new retail formats, internet retailing
• More Efficient Supply Chain
• Increased presence of international brands
• improved service levels and direct dealings with brand owners
• More investment in manufacturing in the country

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 11
What is happening now…

Global Brands are coming!

Products will be more available …

everywhere

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 12
 Retail:
an Overview

Stores Performance Organization CSR

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 13
City Mart Holdings Company Profile

 City Mart Holding Co. Ltd is Myanmar’s largest Retail Chain, currently
employing more than 5200 employees

 Started as a supermarket in 1996, the company is now engaged in many

aspects of modern retail trade

 City Mart is the market leader in the supermarket, hypermarket, pharmacy

and bakery and café formats in Myanmar

 The company aims to serve more of Myanmar’s 59 million populations

through outlet expansions and introducing new retail formats

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 14
Vision, Mission & Values

Vision

To be the benchmark of EXCELLENCE in the supply chain delivery

Mission

To be the leading retail market chain in Myanmar with the highest market share in each
retail format

To pioneer breakthrough concepts in retailing relevant to Myanmar

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 15
Our 3 Pillars of Growth

Retail Distribution Real Estate

Food Solutions Provider Real Estate developer

to HORECA channel for commercial and
residential projects
Distributor of premium
food & non-food
products

Sister company of Pahtama Group, 30,000

Exclusive distributor for P&G, Abbott, Distribution points
Cerebos, Nestle Professional

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 16
Our Milestones

2000 2006 2013

First City Medic First Ocean Rebranding City
Pharmacy (City Care) Supercenter Medic to City Care

1996 First City Books &

Music
First Shopping
Center: Northpoint 2010
First City Mart First City Baby
Supermarket Club

1996 1998 2000 2002 2004 2006 2008 2010 2012

2003 2011
First Seasons First marketplace
Bakery & Cafe supermarket

Established Food First convenience

Service Operations store

2009
First Popular
bookstore

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 17
Our Brands

City Mart Supermarket

City Mart Supermarket aims to be the market leader of Food
retailing committed to delivering quality, freshness, innovative
food ideas, value for money, comprehensive product range,
superior customer services and pleasant shopping environment
Target customers are urban households who appreciate good
quality food & lifestyle. We aim to be recognized as the fresh food
people eventually in the urban community
We currently operate 17 City Mart supermarket outlets.

marketplace is City Mart’s

premium supermarket
brand. We currently
operate one outlet at
Golden Valley

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 18
Our Brands

marketplace by City Mart

marketplace is City Mart’s premium supermarket brand where we
are able to better serve our more discerning customers with more
international and upmarket products.
We currently operate one flagship outlet at Golden Valley.

marketplace is City Mart’s

premium supermarket
brand. We currently
operate one outlet at
Golden Valley

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 19
Our Brands
Best Value Products and more
City Mart Holding Co., Ltd.
Ocean Supercenter
To be the market leader of large format retailing committed to
delivering Great Quality and Value
A one stop place satisfying the needs of every household & each
household member in the city
We currently operate 6 Ocean Supercenter Outlets.
Private and Confidential Myanmar’s Leading Retailer 20
Our Brands

Seasons Bakery & Cafe

The daily fresh baking concept, complimenting the needs of the
urban household
To be the leading Bakery in the country known for quality, service
standard and value
We currently operate 21 outlets.
Freshly baked everyday

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 21
Our Brands

Popular
City Mart holds the country franchise rights to “Popular
Bookstore”, and is currently operating 3 outlets

Products sold in Popular bookstores include books, stationery,

assessment titles and multimedia products
Opens your mind

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 22
Our Brands

City Care Health & Beauty Store

To be established as an Independent full-fledged pharmacy &
personal care store catering to the urban household
To consciously safeguard public health by ensuring that the
pharmaceutical products sold in the community are of good
quality, safe and reasonably priced
Your dependable partner in We currently operate 23 City Care outlets.
healthcare

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 23
Our Brands

City Express Convenience Store

Established in 2011, City Express is the fastest growing
convenience chain in Myanmar
City Express is a convenience store chain that seeks to be at
every corner of the city to provide you with your daily necessities
at the convenience of your doorstep

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 24
Our Brands

Shopping Centers
We manage our Shopping Centers with the interest of the tenants
while providing a safe, clean, convenient ambience for shoppers.
We aim to provide a unique experience for our shoppers
We currently operate 4 Shopping Centers and 6 Neighborhood
centers
Operated by City Mart Shopping Centers
Holdings Northpoint 100,000 sq ft
Ocean Pazundaung 120,000 sq ft
Ocean Oattarathiri 230,000 sq ft
Ocean Shwegondaing 120,000 sq ft
Neighborhood Centers
Chinatown Point 16,000 sq ft
Myanigone 25,000 sq ft
Shwe Mya Yar 16,000 sq ft
Golden Valley 30,000 sq ft
Thamine Center 30,000 sq ft
South Dagon 20,000 sq ft

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 25
Shopping Centers
Thamine Neighborhood Center Ottarathiri Shopping Center
Yangon Naypyidaw

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 26
Leading the Modern Retail Trade

Share of Selling Floor Area within Modern Retail Share of Branded FMCG Goods within Modern Retail

City Express
Others ABC
Super One Asia Light ABC 1% 4%
City Express 1%
5% 2% 2% Gamone 1%
Pwint Asia Light
Ruby Mart Ocean 3% 2% Others Ocean
5% 26% 11% 19%
Capital
Orange & Blazon 4%
5%
Orange
5%

City Mart
Capital Gamone Pwint 15%
7% 14% City Mart
Sein Gay Har Sein Gay Har
14% 47%
7%

Internal Data
Modern Retail Trade Universe includes Departmental stores

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 27
Myanmar’s Leading Retailer

City Mart Supermarkets 17

Ocean Supercenters 6

Seasons Bakeries & Cafes 21

City Care Health & Beauty Stores 23

City Books & Music Stores 9

City Express Convenience Stores 37

Shopping Centers 10

Popular Bookstores 3

Total Stores 126

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 28
Distribution Center

Locations :
 Ayerwun Road, Tharkayta, Yangon
 Industrial Zone, Mandalay

Total Plot Area : 220,000 square feet

Ambient Storage
: 70,000 square feet (4500 pallets)

Temperature controlled Storage

: 600 pallets (+15 to +20)
: 220 pallets ( 0 to +12)
: 250 pallets (-20 to -25)

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 29
City Hope & Love Foundation
We understand that we are responsible to the community in which we operate in.
Hence, we started the City Hope & Love Foundation in 2013 to provide support in the
following areas to our community.

Community Living Education Health Environment

CMHL ran a Wall of
Pledge campaign on the
Anti-Human Trafficking
Day on 13th Sept 2013 in 4
outlets. It is aimed to
support the fight against
human trafficking.
In dedication to all We have held blood We donate a portion of
mothers, we donate part donation drives since 2009 our proceeds from the
of our profit to charities with the Mingala Buhar sale of reusable bags to
and organizations each Association. CMHL also FREDA* and participate in
year. In 2012 we donated donates the necessary tree planting activities.
Ks 73 million to support equipment to facilate in
healthcare, education the blood donation
and youth development drives.
programs.

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 30
Outlet Growth
for key operations

Outlets

180
156
160

140 Popular
120 Shopping Centers
105
Ocean Supercenter
100
City Mart Supermarket
80
63
Seasons Bakery & Café
60 49 City Medic Pharmacy
36
40
22
20 10 14
8
4
2
0
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014* 2016*

* Projected

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 31
We foresee progressive changes in the coming years

Facing more choices in terms of stores and products, the concept of

Store selection Shopping Experience will become even more meaningful: Choice,
criteria will change Innovation, Inspiration and modernity, cleanliness, store atmosphere
and services.

While retailers and Brands compete for their share of the pie, new
Shopping Drivers will rise:
New Shopping • Food Safety
Drivers will rise • Quality
• Promotion
• Price

• Shopping frequency will slightly decrease in large agglomerations

• Shopping basket will grow
Shopping patterns
• In addition to Choice, Price and Promotion importance will
will evolve become important in store selection
• Communication will be a stronger influencer in shoppers decisions

Modern Trade is best equipped to address these changes

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 32
Thank you

Contact Us

Padonmar Stadium (East Wing), Bargayar Street,

Sanchaung Township,
Yangon, Myanmar

Tel: (951) 508460 / 523430

Fax: (951) 512019

www.CMHL.com.mm

City Mart Holding Co., Ltd. Private and Confidential Myanmar’s Leading Retailer 33