The Emerging Retail Market in Myanmar - An Institutional Perspective of Foreign Retailers’ Market Entry Decisions

Abstract

In contrast to most of its Southeast Asian neighbors, Myanmar still lacks a vibrant retail landscape. Yet, given the political and economic opening-up of the country and the abolition of many sanctions since 2013, commercial interest in Myanmar is growing rapidly. While political and economic reforms sweep across the country, retailers are now eyeing-up the formerly reclusive nation for opportunities. Still, the question remains as to how optimistic the outlook of the Myanmar retailing industry really is? This paper explores and analyses the developments of Myanmar’s retail sector to date. Within the decision making process, companies operate within an external and an internal environment that consist of political, cognitive and sociological elements. A company’s behavior and decision making processes are affected by both environments. This study applies institutional theory as a complementary framework in order to evaluate international retailers’ foreign market entry choices with special regard to Myanmar and evaluates the main factors influencing decisions for, or against market entry. It concludes by proposing institutional theory as complementary to, and not substitutive of, existing theories such as Dunning's eclectic theory or transaction cost analysis.