Will Amazon ever come to Myanmar?

Amazon's attempt to establish operations in Myanmar faced several significant challenges that ultimately hindered its success. These difficulties can be attributed to a combination of economic, political, and logistical factors that made the country a tough environment for the global e-commerce giant to operate in.

First, the economic landscape of Myanmar, while full of potential, has been shaped by decades of military rule, sanctions, and a nascent transition towards a market economy. Though the country experienced a period of economic opening after 2011, the infrastructure necessary to support large-scale operations like Amazon’s was severely underdeveloped. Key elements such as digital technology, telecommunications, and reliable supply chains were still in their infancy, making it difficult for businesses to operate efficiently. The lack of a robust e-commerce infrastructure, combined with challenges related to payments, delivery logistics, and internet penetration, further complicated Amazon's potential entry into the market.

Moreover, political instability has long been a significant obstacle for international companies looking to invest in Myanmar. The military’s grip on power, especially after the coup in 2021, created a volatile environment that scared away foreign investment. The political risks, including sanctions, unpredictability in governance, and threats to the rule of law, were heightened by the country’s poor human rights record, which made companies like Amazon wary of being involved. The situation deteriorated so much that it became impossible for any long-term strategic business planning to take place.

Another crucial challenge was competition from local and regional players who had a deep understanding of the Myanmar market. Retail groups like City Mart, which had already established a presence and built robust supply chains in a very challenging environment, posed stiff competition. These companies adapted quickly to the needs of Myanmar consumers, who were just beginning to experience modern retail formats. Amazon would have found it tough to compete with local players who understood consumer habits, had established supply chains, and were culturally attuned to the market's nuances.

Additionally, the costs of doing business in Myanmar have risen sharply over recent years. From 2011 to 2018, human resource costs, for instance, increased dramatically, by 20-25% per annum. This rise in operational costs made it difficult for Amazon to implement its typical cost-efficient logistics and distribution models. Myanmar's urban infrastructure is still underdeveloped, which posed further challenges for Amazon, particularly regarding last-mile delivery—a critical component of its business model.

Furthermore, the digital infrastructure in Myanmar did not reach the level that could support large-scale e-commerce operations. While mobile penetration increased, internet speed and reliability, essential for online retail, lagged behind other Southeast Asian nations. Given these issues, it would have been hard for Amazon to replicate the efficient, seamless shopping experience that its customers in developed markets are used to.

In summary, despite Myanmar’s potential as an emerging market with a growing population and increasing disposable incomes, Amazon was ultimately unable to succeed in the country due to a combination of political instability, underdeveloped infrastructure, high operational costs, and fierce competition from local businesses that were better positioned to navigate the country's complex environment. The political and economic landscape of Myanmar, especially in the wake of the 2021 coup, likely sealed the fate of any future plans Amazon might have had for expansion in the country.