The Last Word

January 10, 2013 3:24 pm

Tiger Balm returns to its Myanmar roots

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Tiger Balm

Return of the rub: the ointment is in its native land again

With its leaping tiger logo and pungent menthol smell, Tiger Balm ointment has been a staple in many medicine cabinets since it was invented by two Chinese businessmen in what was Burma in the late 19th century.

The Aw brothers made their fortune by selling the ointment from a shop in Rangoon, before moving the business to Singapore in 1926.

Their legacy lives on in the city-state at a bizarre theme park known as Haw Par Villa, whose whimsical depictions of Chinese mythology and garish statues must make it one of the world’s most eccentric tourist attractions.

Tiger Balm’s owner, Singapore-listed Haw Par Corporation, wants to take the ointment back to its roots in what is now Myanmar, betting that lingering memories of the brothers’ legacy will help it crack southeast Asia’s hottest emerging market.

“The reason why we are very keen on Myanmar is, of course, it’s our origin. Tiger Balm has gone out into the world, made a name for itself and now it’s coming back,” says A.K. Han, the company’s executive director in charge of healthcare.

Tiger Balm is sold in more than 100 countries and its range was recently extended to include sticking plasters and a “muscle gel” for sports enthusiasts. Singer Lady Gaga recently tweeted her approval, declaring the ointment to be a “backstage must-have”.

But it has not been sold officially in Myanmar for decades. Any sales that did occur were via a flow of bootleg products from neighbouring Thailand.

Myanmar is rapidly becoming a magnet for consumer goods companies betting that the relaxation of the ruling military junta’s grip on power will unleash a new consumer class as the country – with a population of more than 60m – opens up.

But unlike many companies entering new markets, Haw Par dispensed with on-the-ground consultants and granular market research, relying on informal networks within the trading community. Instead, Mr Han sent staff to Myanmar to find a distributor. They picked up names from the labels on the back of products already distributed in the country and short-listed suitable candidates.

“With all due respect to the consultants, we’ve been in this business for a long time and we are in so many countries, so we are able to fish out the guys on the ground who can do the job and walk the talk,” Mr Han says.

Awareness of the product was not an issue. Mr Han reckons that as many as six out of 10 people already know it or are at least aware of its name, based on informal conversations with shopkeepers and traders.

The main issue was figuring out whether consumers in Myanmar – a country with among the lowest annual per capita incomes in the region – would be prepared to pay the premium price that Haw Par charges for Tiger Balm. A jar costs at least three times as much as a locally made product.

Confirmation that there is spending power came when the company’s chosen distributor was asked to organise two parties last September to mark the reintroduction of the product, one in Yangon, the capital, and the other in Mandalay.

About 300 wholesalers, pharmacists and chemists turned up at each party – far more than Haw Par had expected. And they arrived driving luxury cars such as Mercedes and Lexuses. “That was when we knew we were right,” Mr Han says. “These are the people who wake up commerce. Either they have their own trading organisations or they have their own trading links with, say, Thailand. They have wealth and they flaunt it.”

Mr Han is convinced that there is “quite a layer of richer people” in Myanmar, who are not necessarily connected with the powerful military, long a force in business in the country. Romain Caillaud, managing director, Myanmar, for Singapore-based consul­tancy Vriens Partners, says: “People have to go beyond this idea that the it’s only the military that are rich. There is also a private sector that is somewhat independent from the military.”

Four months after the launch, flights to Myanmar are packed with business people eager to tap that private sector, especially from Singapore, whose flag carrier started direct flights to Yangon in October.

“It [Myanmar] is going to be as big if not bigger than Vietnam in the near future,” Mr Han says. “So we are not just testing the waters. We are definitely committed to launching the whole product range there in due course.”

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