German store Metro eyes expansion in Myanmar

THOUGH some multinational companies are still hesitant about investing in Myanmar, Germany’s Metro AG’s bold entry into the market has yielded satisfactory returns, said Jens Michel, chief executive of Metro Wholesale Myanmar.

In an exclusive interview with The Nation, Michel said Metro was looking into expanding to Mandalay, Nay Pyi Taw, Taunggyi and other prominent cities in Myanmar in the next few months, a plan that is buoyed by the company’s strong performance since its entry in March.

“We are constantly expanding our customer base and have set a very ambitious target. You will see good news in the very near future,” he predicted.

“The market response to our launch has been absolutely phenomenal. We have experienced huge customer interest in what we are doing, and have seen an enormous amount of new customers coming [to the Metro booth at the Food and Hotel Myanmar 2019].”

According to Michel, the Myanmar operation now has more than 300 HoReCa (hotels, restaurants and caterers) as customers, with Metro delivering fresh and high-quality food to them on a daily basis.

“We are now on the right track, and will continue to keep up the good work and will try to accelerate our growth,” he said.

“By some miracle, the way we engage with the market and customers, the feedback we are receiving shows pure market leadership for us, particularly in the HoReCa segment.”

Michel said the majority of Metro’s customers are local companies, including mega-hotel groups and big names as well as small and medium-sized enterprises. Currently, more than 2,500 |products are available in the market, and Michel foresees a substantial increase in the firm’s product line.

“We would like to double it in the next few months, but that depends on market demand. We don’t believe that will be an issue, because demand for our products is on the rise in Myanmar,” he said.

“We are very focused on Myanmar – on HoReCa as well as the trade segment and small companies. We are here in a highly emerging market, and do not underestimate its potential. We are always looking at how to achieve our target by working closely with local partners and our customer base.”

Michel said Metro will focus on building a successful business in Myanmar, though it needs to be aware of the nation’s political environment.

“We really drive for innovation, progress and market leadership. Myanmar as a country has significant opportunities in itself. But it will require someone to take leadership to innovate for the market to grow further … this is what we are doing,” he said.

Wide range of products

“We are conducting general and modern trade. This will enable our customer base to benefit from a wide range of products. We help customers to spend more time on their own businesses, focus on their own vision and strategies, while we take care of all food and non-food items they require as well as delivery to their businesses.”

The firm has a 5,800-square-metre warehouse in the Thilawa special economic zone where incoming goods are stored and packed in compliance with food safety standards for delivery to customers. For logistics, it has partnered with Kospa, a joint venture between Yoma Strategic Holdings and Japan’s Kokubu & Co.

“In terms of logistics, we aim to apply our framework and quality standards. Kospa is a very strong partner, so we do not foresee any changes,” he said.

The firm now has 150 employees in Myanmar, and 92 per cent of them are locals. Michel is confident the company could easily double or triple the number of employees in the next few years.

To date, the firm has invested around 10 million euros (Bt354 million), and will keep boosting its investment in Myanmar, he added.

“At the moment, a lot of investment is going into technology, as we are driving for market leadership in e-commerce as well as in our physical expansion,” he said.

Michel said the company tries to source at least 70 to 75 per cent of its products locally, while the remainder is imported from different countries, with a focus on neighbouring nations, including Thailand.

Earlier this year, Metro Wholesale Myanmar secured a US$20 million (Bt634 million) loan from International Finance Corporation, which Michel said is a great partner.

“There are a lot more opportunities for collaboration with IFC beyond their financing facilities. Working with IFC on these facilities has been very positive for us and it enables us to drive our market expansion in terms of geographical coverage,” he said.

Michel said Metro was constantly looking at strategic partnerships, adding that openness to innovation, transparency and consistency |were critical to the selection of |partners.

“We are in active discussions with several local partners to accelerate the expansion of our footprint. We are very excited about their interest, and are confident that we will be successful,” he said.

Source: Nation

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