“Every
man has a crazy hobby,” said U Thiri Thein Than, an automotive engineer
from Yangon who also has a home in Tokyo. “For me, it’s cars and
watches.”
For
years Mr. Thiri Thein Than, 40, has done his higher-end shopping
overseas. But in March, he visited a boutique that the Swiss watch
company Franck Muller had just opened in the upscale Sedona Hotel
overlooking Yangon’s Inya Lake — the company’s 44th location worldwide,
and Myanmar’s first monobrand luxury watch store.
Mr.
Thiri Thein Than bought a Master Calendar Lunar watch in pink gold with
a tiny moon that rises and falls with the lunar calendar. He said the
watch, which sells here for $33,500, has drawn compliments at his office
and makes him feel distinguished in crowds.
“This
is my jewelry,” he said of the watch on a recent morning, sitting in
jeans and a blue dress shirt beside a giant white vase of fresh orchids
at the hotel, where the Muller boutique occupies 2,153 square feet.
Photo
Tadayuki Azuma, manager at the Franck Muller boutique in Yangon, brings a watch into the VIP room at the shop.Credit
Minzayar Oo for The New York Times
Myanmar’s
economy, stunted for decades after a 1962 military coup, has grown
swiftly since 2012, when landmark elections ushered in dramatic
political reforms and a wave of foreign investment. Profits from the
domestic timber, minerals, and oil and gas industries had been fueling
urban property markets and a high-end domestic jewelry trade, but
international brands were virtually nonexistent before the opening —
even here in Yangon, Myanmar’s business capital and most cosmopolitan
city.
Many
residents still patronize ramshackle wet markets and sidewalk tea
shops, where a full meal costs far less than a Starbucks latte. But by
2015, the country’s economy was growing by 7 percent annually, up from
5.6 percent in 2011, and new high-rises and shopping malls were
sprouting alongside the city’s majestic, if dilapidated, colonial-era
buildings.
Nearly
all of Yangon’s new retail space targets low- to mid-range buyers, and
shoppers who can afford luxury goods typically buy online or on trips to
Singapore, Thailand or Europe, several analysts and businesspeople
said. But a few overseas luxury brands are beginning to sell watches and
other goods here, with an eye toward future sales.
“It’s
nice to be there at the very beginning,” Nicholas Rudaz, director of
Franck Muller, said in a telephone interview from the brand’s
headquarters in Switzerland. “And, of course, this is a long-term
investment.”
Even
with the new malls, Yangon’s total retail space is still minuscule,
compared with that of Bangkok and other Southeast Asian shopping hubs.
And Antony Picon, Myanmar managing director at the commercial real
estate company Colliers, said he did not expect major luxury brands to
enter Myanmar for another five years to a decade, although a few luxury
cosmetics chains might open locations in Yangon’s upscale hotels, a
common pattern in emerging markets.
Photo
A magazine shoot at the sales showroom for Jaguar Land Rover, one of Yangon’s first luxury brands.Credit
Minzayar Oo for The New York Times
But
in the longer term, the country’s retail growth could be explosive,
said Gregory Miller, managing partner at Myanmar Capital Partners, a
Bangkok-based financial services company with staff in Yangon. “There’s
no point in trying to draw comparisons with Laos and Cambodia because
they’re not rich with resources,” Mr. Miller said. Myanmar is “going to
be more like Thailand.”
He
said demand for luxury retail would come not only from the existing
moneyed elite, but also from an emerging middle class and Myanmar
émigrés coming home to pursue business opportunities.
The
situation “will change simply because the head of sales will be saying,
‘We need to be in Myanmar,”’ he added. “And some people will take the
leap.”
There
already are signs of demand: For example, Jaguar Land Rover, BMW and
Mercedes-Benz have all opened Yangon showrooms since 2012.
Okkar,
a Myanmar national who uses just one name, is a Ford brand manager at a
Yangon car dealership selling Ford, Jaguar and Range Rover models. He
said government officials drive the sales of luxury sport-utility
vehicles, and that many luxury car buyers here have large fleets.
Photo
The Swiss Time Square watch boutique in Yangon sells brands such as Rolex, Tissot, Breitling and Rado.Credit
Minzayar for The New York Times
Another
sign of growth is Swiss Time Square, a sleek, multi-brand watch
boutique that opened in 2013 on the fringes of Yangon’s Golden Valley
district. Prices start at a few hundred dollars for Tissot and Rado
models, and rise to $1.3 million for a diamond-and-ruby-studded Rolex.
“Wearing
Rolex watches is just like cars: If you are buying a BMW or Mercedes
car, it means other people will see that you are a rich person,” Tay Zar
Win Htoo, a sales supervisor, said on a recent morning at the two-story
boutique, which sits near some mobile-phone shops on a traffic-choked
boulevard about four miles from downtown Yangon.
However,
he said, the more common sale was $500 to $1,000, with as many as 30
watches of each popular brand being sold in the months before
Thadingyut, a Buddhist holiday in October.
Engineers, construction
workers and other staff members inside Sule Square, the 7.4-acre
shopping mall and office complex being completed in Yangon. Its retail
area is to feature luxury brands such as Rolex, Emporio Armani and
Montblanc.Credit
Minzayar Oo for The New York Times
Luxury
elements are being included in several mixed-use real-estate projects
in Yangon’s downtown. One is the Landmark Development, a
two-million-square-foot project scheduled to open in 2019 or 2020 with a
luxury Peninsula Hotel, according to the project’s developer,
Singapore-based Yoma Strategic Holdings.
Cyrus
Pun, the company’s head of real estate, said in an email that the
Landmark’s luxury component, though small at first, could expand as
Myanmar’s retail market matures.
On
a nearby block, Sule Square, a project of Shangri-La Group, a Hong
Kong-based conglomerate, was nearing completion early this summer. Yinn
Mar Nyo, Sule Square’s director of sales and marketing, said the
project’s 64,583-square-foot retail component would include Myanmar’s
first monobrand Rolex store.
Photo
A street vendor in front of
Sule Square in Yangon. Many residents still prefer to shop at open-air
markets rather than Western-style malls.Credit
Minzayar Oo for The New York Times
But
Ms. Yinn Mar Nyo added that the mall’s primary target will be
mid-market consumers. “There are buyers for luxury goods, but in terms
of volume, it may not be there,” she said during a tour of the
high-ceilinged lobby, speaking over the drone of buzz saws and the clank
of hammers.
Ivan
Pun, a Myanmar entrepreneur whose father, Serge Pun, is the executive
chairman of Yoma Strategic Holdings, said he came to a similar
conclusion about Myanmar’s retail sector after briefly operating a
pop-up store with international designer clothing.
“The
target audience that I had in my mind — of girls in their 20s and 30s
with a high disposal income — they came through the door,” Mr. Pun said
of the project, which he said featured “cool kid” brands like 3.1
Phillip Lim and Mary Katrantzou, with prices ranging from $300 to more
than $7,000. “But that did not translate into sales.”
Mr.
Pun, who previously worked in New York and Beijing, said he was now
talking with international luxury brands and would be open to
partnerships with some of them here, but that none was rushing to open a
monobrand shop in Yangon because Myanmar's luxury market was so new.
For
now, his start-up, Pun + Projects, is opening restaurants in Yangon
that would not look out of place in Brooklyn or East London. One example
is Rau Ram, a Vietnamese fusion restaurant whose menu features Hokkaido
scallop crudo, lemongrass buttermilk fried chicken and a designer
cocktail named “pho real.”
Tuesday, September 06, 2016
