MYANMAR CONSULTANTS, BROKERS, MIDDLEMEN AND INTRODUCERS

Similar to other developing markets in their early stages of development, Myanmar market has its own share of ‘ambitious’ and ambiguous consultants, brokers, middlemen, introducers and so on. Being an unregulated sector of the market, the ‘consultancy’ sector or ‘brokerage’ business may be targeted by individuals or smaller companies with no real value-added expertise to try their luck because they simply do not have any real expertise to succeed in other sectors of the market. Therefore this article is to share our first-hand experience dealing with such individuals or companies.

Your usual McKinsey, BCG, Deloitte, PWC, Collier and similar 'big boys' will always upkeep their brand and performance qualities, therefore I do not have any ill advice against using them, especially for the big corporate clients with existing relationships with such entities in their regional or global headquarters level.

My challenging experience has to do more with the ‘local local’ consultants/brokers/middlemen (for this article, we will call them as ‘brokers’). This does not exclude some overseas ‘consultants’ who are trying to do ‘gold rush’ in Myanmar market too, of course.

Introduction to the President, Chief Minister or Some Big Names: Many brokers would always try to lead the foreign investor or potential investor to believe that by meeting the ‘President’ or Chief Minister of certain state, all the permits, projects, and whatever else would follow automatically. This could not be further from the truth. Before 2011 or 2012, there might have been isolated cases where foreign investors with high-value/investment projects might have succeeded. In reality, in the current environment, important office holders have their own busy agenda and the business establishment process is getting more transparent, therefore our experience shows that it may just be a waste of time and resources to agree to the broker to help set up a meeting with the important office holder.

Broker’s obvious motive is to earn a quick fee from you by possibly arranging a 2 minute hand shake and a quick chat about the weather with the ‘important’ person. We usually politely decline all such suggestions from an early stage.

Percentage of Equity: Some of the brokers would be willing to introduce you to the head of the local corporate or family member(s) of a large local corporate. By doing so, they not only expect a one-time fee, but also some equity percentage in the new investment or business that you intend to set up.

Our experience shows that we do not really require any broker to introduce us to any serious business partners locally with shared business interests. We could contact the company/office by ourselves and arrange for the appointment at a mutually agreed schedule. Once in a while, if we are under time pressure to arrange various meetings during a very short visit to the country, we might require to pay a local broker that we trust to make all the appointments and to personally drive/follow us around for such meetings. Apart from such situations, it is quite unnecessary to use brokers for introduction, and worse still, to lose a percentage of your new business to a non-value-added ‘partner’ in exchange for a simple introduction.

Customer Lifetime Value: Marketing professionals would appreciate how we place value on customers based on the lifetime value that such customers bring to the business. Brokers (some of them, at least) understand this concept pretty well too.

We, out of goodwill or just naturally part of friendship and as a normal ‘human’ habit, would quite happily refer some businesses to our friends and associates’ companies. It is no difference to pointing to the right direction of road to a stranger or a tourist in any city that we live in, for example. However, our broker friends would usually place ‘value’ against that road direction information, unfortunately. Worst still, such brokers would also expect to benefit from such value for the lifetime of that customer relationship that you may have.

It was getting quite challenging for us because the broker would insist on attending all meetings and be a part of all important decisions/negotiations and also want to place a percentage for himself (just for his introduction). In the end, we had no choice but to kill that business deal just to protect our long term business interest. It is advisable to make it clear each party’s position and benefit/compensation (if any) from the start of the business discussion or relationship to avoid possible misunderstanding at a later stage.

When will you need a professional consultant?  It is almost compulsory to have a local consultant who knows the international business and corporate practices in additional to the sound expertise of local ins and outs. More importantly, it is extremely useful to have an excellent locally based consultant to work with you hand in hand especially in the early stages of your multi-million (or hundreds of million) investment venture in Myanmar.

You definitely need to meet your timeline/milestones and return on investment targets. And you may not be able to do it on your own or just with your trusted professionals from your home office. Therefore, you need a local ‘tour guide’ as your consultant to help negotiate the local ‘roads’ or ‘waters’ and to IMPLEMENT and GET THINGS DONE together with you for your long-term sustainable success in Myanmar market.

We would be happy to further discuss with you to identify specific areas where you may need an expert consultant and also realistic timelines related to your entry strategy and implementation of your business plans in Myanmar.