Ultra wealth: Capitalizing the conspicuous consumption in Myanmar

Wealth-X World Ultra Wealth Report 2012-13

Last month, Wealth-X, a firm that gathers data on rich families for the use of fundraisers, financial advisers and luxury brand marketers released this year’s World Ultra Wealth Report.

In it, Wealth-X estimates that there are over 40 families from Myanmar that make the cut, and forecasts that this number is only likely to grow drastically in this country – to 307 families by 2022. As reported in Irrawaddy, the new rich will grow from such sectors as tourism, financial services and commodities (lumber).

To make it to the list, one will have to be valued in purely financial terms at minimum USD 30 million, also known as “High Net Worth Individuals.” This is a term people often throw around in the fundraising world where I worked in New York City. But it is also a deeply patronizing term, reducing a person down to a financial category. Equally patronizing as “aspirational consumers” as marketers like to say. For those that don’t make the cut to the HNWI list, the X-Wealth report also has another category for the masses that make only USD 200,000 per year, “Mass Affluent.”

Now, what does all this mean for Myanmar? Three things stand out.

1. People in emerging economies like Myanmar love the bling factor.

In 2001, a research from the University of Chicago found that conspicuous consumption serves to fend off the perception that the owner is poor, rather than to signify that he/she is well off. That means, one spends relatively more on luxury and spends much less on essentials if one belongs to an underprivileged group.

In a bottom billion country like Myanmar, the few rich families display conspicuous consumption to deliberately dissociate themselves from the majority that is poor. By bling factor, I am not just talking about over-sized rings and glitzy tote bags. In Myanmar terms, bling includes anything from celebrities wearing monogrammed small leather goods in a totally unrelated ad (again, like a true aspirational consumer), to tagging what brands you are wearing in your stylized Instagram photos. Yes, Myanmar is going through that phase.

Capture

2. Philanthropically speaking, individual giving in Myanmar is still extremely low.

Traditionally, charity in Myanmar centers on religious affiliation and close and extended family causes. You donate biennially before and after the Buddhist lent. You pay for a nephew’s fees for school. Or provide low interest credit to a family member who is in need of capital for business. If you are feeling particularly generous, you then go to Shwedagon to pay for more gold plates.

While we had pioneers like Pwa-U-Zun in the past, we have few role models to look up to in Myanmar’s modern philanthropy. Sure you occasionally come across in your daily paper a stiff picture of someone handing a box marked with USD 5,000 to someone else equally stiff. A sum so trivial in comparison to my New York donors where they write a check for USD 10,000 and we hand back in a thank you letter personally signed by the CEO. That is it. Not even a picture.

Mr. Zaw Zaw of Max Myanmar Group, as Erika Kinetz at AP reported, ended the fiscal year 2012 with more than USD 240 million in revenues. Yet, he made just a little over USD 125,000 of corporate contribution that year. In a high-profile fundraiser spearheaded by Ms. Aung San Suu Kyi back in late 2012, Mr. Kyaw Win of Shwe Than Lwin gave over USD 155,000, but I wonder if in essence that sum sits on the fine, murky line between humanitarian gift and campaign contribution.

3. Guilt factor: Second generation families members of the wealthy also feel the need to cover the areas that their family is commercially involved with.

Some of them don’t bother. They say money has always been important to them, with a Montblanc watch dangling on their wrist. Others do. Now running a family airline, the daughter of one of the largest conglomerates (listed on SDN and all) now devotes much of her time studying and identifying opportunities for Corporate Social Responsibility (CSR). A friend whose father sells electronic goods says she is interested in finding a way to recycle old electronic goods. An old acquaintance from high school wants to promote public health while her father sits on the board of one of the largest conglomerates that have 35% market share in drinks made with rectified spirit. The new, modern élite is yearning for a more fulfilling and meaningful fashion of giving in contrast to how their fathers have done in the past, and for good reasons.

This is just a long-winded way of saying that fundraising could be made more professional in Myanmar. As the nouveau riche is bursting with energy for conspicuous consumption, a more modern and fashionable fundraising platform could direct this energy for the majority of Myanmar where life is still very difficult. Some of the trendsetters have already picked up on this, if you remember a very grand birthday party that took place late last year when all party-goers wrote a check to a foundation at the entrance. Right before they descended into the large staircase leading to all the boozy sparkles and gold.

2 thoughts on “Ultra wealth: Capitalizing the conspicuous consumption in Myanmar

  1. Pingback: economy of reputation | An Edible Woman

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