Rocket Internet, the German startup dynamo that focuses on emerging markets, has already been operating in Myanmar for just over two years with several classifieds sites. But now the company says it’s ready to do something new and very challenging – launch an actual ecommerce site in Myanmar.
But is Myanmar itself ready for ecommerce? The country only opened up a few years ago. While foreign brands have rushed in – from Coca Cola to Huawei, L’Oreal to Telenor – to get an early start, tech companies are finding that a lack of infrastructure is making for a slow beginning to their frontier ambitions. With few people online (1.2 percent of the 53 million population, said the World Bank in 2013) and smartphones in the hands of a small percentage of the population, the prospects for online shopping look tough.
“We believe Myanmar will shortly be ready for ecommerce,” says Koen Thijssen, co-CEO of Asia Pacific Internet Group (APACIG), the Rocket spin-off set up in April to focus on the continent.
Thijssen cites Rocket’s ecommerce entry into Pakistan as an example of getting in at the ground floor, way before other companies would even begin to consider the market as a viable option.
He’s now preparing to launch Shop.com.mm in Myanmar, an ecommerce marketplace that has just come online quietly but which the firm isn’t yet marketing. It’s a version of the Daraz.pk estore that it rolled out before in Pakistan. Aside from Myanmar, it will soon launch in Bangladesh as well.
“It’s the Amazon of the frontier markets in Asia,” says Thijssen, describing the site.
New shoppers
Thijssen, who hails from the Netherlands, feels that the time is right for this kind of move into Myanmar. “We have to be there now because it’s growing so rapidly,” he explains.
Shop.com.mm will focus on “price leadership,” says Thijssen. That and the broader availability of items compared to offline shops should help to bring in Burmese eshoppers – and perhaps even drive the growth in ecommerce in the nation.
Nay Min Thu, a Burmese tech entrepreneur who founded the iMyanmar Group, says that ecommerce in Myanmar is going to boom. “It is inevitable. Thousands of people are getting online for the first time every day. Internet usage will grow by leaps and bounds.”
Although Nay Min Thu’s sites, such as iMyanmarHouse, are rivals of Rocket Internet’s classifieds sites in the country, he welcomes the tech giant’s arrival in the fledgling ecommerce scene. “Rocket Internet’s presence in Myanmar is actually good for the local tech ecosystem. It kind of puts pressure on local startups to do a lot of improvements – in terms of both technical and business-related improvements.” He adds that “competing with an international player […] compels local startups to work harder and move faster.”
With this new launch Rocket is effectively cutting out a decade of the normal evolution towards ecommerce that we’ve seen happen around the world. Usually a country starts to get online, then people use online classifieds sites or forums as an ad-hoc way of selling things, and next folks try using new social networks for basic commerce. Then, finally, something like Amazon or Alibaba’s Taobao emerges and ecommerce in that nation is truly ready to go.
Thijssen says that when people use forums or Facebook stores to sell stuff, it’s “a typical example of seeing demand but not having a marketplace.” And so Rocket is leaping straight to giving Myanmar a proper estore.
He believes there will be “country-specific challenges” as APACIG’s estore expands from Pakistan to Myanmar and Bangladesh, but the feeling is that they “should be able to replicate the success [of Daraz Pakistan] in a similar market – similar in GDP.”
Driving demand
Rocket’s new ecommerce site for Myanmar is a marketplace, so that means it brings opportunities for shopkeepers and new entrepreneurs to open up online stores. While it doesn’t require a deposit to set up a store, it does take commission.
Thijssen calls it a “managed marketplace,” which means it’s not like Ebay – it’s more like Amazon Marketplace. The Myanmar store, Shop.com.mm, will have a central warehouse that merchants ship to, and then the firm sends the packages to buyers. It even handles payments, including cash-on-delivery as an option. It’s a model they tried in Pakistan too. “It’s an important way to guarantee quality,” he adds.
The company will have to educate sellers in Myanmar about ecommerce, he admits, but that’s something that both Rocket Internet and APACIG inevitably do in the relatively young markets they enter, from Indonesia to Brazil. Thijssen says Myanmar’s web users and potential online merchants are mostly young, which makes them “relatively tech savvy… and very eager.”
Daraz.pk used to focus on selling clothes before it switched to being a general marketplace. In Pakistan, the company finds that gadgets, especially phones, are in huge demand. For some people in Pakistan this year it was the surest way of getting a new iPhone 6 or 6 Plus. Thijssen sees this happening in Myanmar as well. “Availability is an important driver of ecommerce,” he says.
Another tactic that will be carried from Pakistan to Myanmar is the way the company pushes down prices, often to levels below what brick-and-mortar stores can offer. Thijssen explains that Shop.com.mm will work closely with merchants who have the lowest prices and offer incentives, such as featuring them on the homepage or starring them in Facebook ads (for which the merchant doesn’t pay a thing). Since the cheapest merchant will likely be the most popular, the estore will persuade the merchant to put more stock in APACIG’s warehouse so that items can be shipped faster to buyers. If a shopper happens to be in the same city as a warehouse, that could even mean same-day delivery.
But speed isn’t the priority. “It’s all about availability,” Thijssen reiterates, with a low price thrown in to sweeten the deal for consumers.
A page on Rocket’s new Shop.com.mm store for Myanmar.
Regular readers will be familiar with Rocket’s Lazada estore, which operates in Southeast Asia. So why doesn’t the new ecommerce site for Myanmar bare the Lazada name? Thijssen says that the Myanmar move is APACIG’s, not Rocket Internet’s, so the different investors involved means that it had to borrow the Daraz name from APACIG’s side of the business. APACIG is a joint-venture with Qatari telco Ooreedo in which Rocket has a 50 percent stake.
Startup struggles
APACIG now has 10 ventures in its portfolio, and Rocket Internet has a further eight in Asia alone. It’s not been easy for all them. Rocket Internet has all but crashed out of China in the past couple of years in the face of strong local competition, and yesterday EasyTaxi announced that it’ll pull out of three Asian markets – Hong Kong, Indonesia, and India – as the taxi app market gets saturated. EasyTaxi remains in action in seven other Asian nations.
The EasyTaxi pull-out is yet more proof that Rocket prefers a nascent market to a crowded one.
When Tech in Asia spoke to Thijssen it was a few days before EasyTaxi’s partial withdrawal. While he conceded at the time “that the [taxi app] space is more competitive” than most of the other areas where Rocket operates, “We want to be able to meet all demands – getting a maid, a taxi, a job.”
The maid part is a reference to Helpling, which is a marketplace for domestic help that will soon launch in Asia. Helpling’s first launch in the region will be in Singapore early next month. Singapore would seem like a much too developed market for Rocket, but Thijssen says it “makes sense [to launch] where domestic help is more expensive.”
However, most of the Rocket action in the new year will continue to be where a lot of tech giants fear to tread.
See: Myanmar’s startups are on their own for now, but entrepreneurs have hope
This post Rocket Internet launches ecommerce store in Myanmar appeared first on Tech in Asia.
Rocket Internet launches ecommerce store in Myanmar
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