ecommerceIQ

Compared to the other Southeast Asian countries, not much is known about Myanmar’s market potential.

Despite being late in joining the world wide web, the country’s internet penetration grew 97% in one year, reaching 26% of the population, roughly 14 million users.

eIQ speaks with Win Nander Thyke, founder and CEO of rgo47 — one of the leading online retail companies in the country — to shed light on the country’s retail potential, evolving Burmese shopping behavior, and why she believes strongly in the market’s future.

Realizing Myanmar’s new consumer

Rgo47, initially Royal Golden Owls (RGO), was introduced in 2013 during Myanmar’s inaugural hosting of the biennial Southeast Asian Games (SEA Games).

By leveraging her family’s fashion business, RGO was responsible for producing the official merchandise for the SEA Games such as t-shirts and fashion accessories to be displayed and sold at the two-week event.

Myanmar ecommerce market

Official SEA GAmes Myanmar banner with RGO as a sponsor.

It was the right opportunity to send a positive image of Myanmar and reach a large audience with her new apparel brand as one of the official event sponsors and operators.

And it was during this time the company first observed a shift in consumer behavior that signaled the beginning of online retail potential in the country.

“People would email us or contact our Facebook page to ask if we were able to deliver the SEA Games souvenirs to their homes,” said Win. “At the time, we didn’t have the resources to do so and didn’t think that our Myanmar people would be interested to shop this way that early.”

Fair to say so considering only 1% of its population was connected to the internet only a few years back.

RGO, now rebranded to rgo47, decided to launch its online channel in April 2014 — the year that marked the country’s “Mobile Revolution” when mobile penetration jumped to 83% in only five short years.

Through its ecommerce channels to this day, the company continues to sell its most popular category: fashion apparel that includes everyday apparel, sportswear, shoes, and bags as well as its most recent category additions: cosmetics, kitchen appliances, and electronic and home office goods.

A uniquely Facebook-first market  

Given Myanmar’s reputation for being a Facebook-first country, the company set up a Facebook page and website as its first online channels.

“Facebook is very integral to the Burmese daily life that it’s almost useless for us to have a website,” said Win “I’d say 80% of our transactions come from Facebook.”

Myanmar ecommerce market

rgo47’s main Facebook page

According to Win, a native Burmese herself, a majority of consumers in the country require a personal touch, which usually means human interaction while placing their orders.

To cater to this need, the company employs 42 telesales personnel – out of 122 employees – to communicate with customers through phones and chat applications including Facebook Messenger, and the country’s favorite, Viber.

Win is trying to lessen its reliance on a labour intensive transaction process and anticipates a change in consumer behavior. The company released its mobile application earlier this May, already generating 11,000 (iOS) and 72,000 (Android) downloads.

However, even with this initiative, Win admits that shoppers still prefer the company’s Facebook page, pretty evident as the rgo47 page holds the largest audience in the country.

Myanmar ecommerce market

The company has the largest Facebook audience in Myanmar, leaving behind even earlier player Rocket Internet’s Shop.com.mm and Kaymu

Evolving Burmese online shopping behavior

A preference for Facebook is not to say that the Burmese are resistant to change.

While cash-on-delivery (COD) was the most preferred payment method based on rgo47 records last year, the company saw a shift to more than 50% of its orders now being processed via other channels such as bank transfer and Wave Money – Myanmar’s top mobile financial service providers.

Although a step in the right direction, Win believes the country’s lack of ATMs can cause customers to travel long distances in order to complete a payment and has unfortunately resulted in many canceled orders.

Aside from low payments infrastructure, the country’s addressing system also presents the last mile challenge. While most of its customers reside in big cities such as Yangon and Mandalay, the company has seen an increase of orders coming from rural areas where the drop off locations are difficult to find.

“Outside of Yangon, it is really hard to find the address for customers. That’s why most ecommerce companies in Myanmar still need to give every customer a call to confirm their orders and exact location,” explained Win.

While Myanmar’s ecommerce challenges are not uncommon, Win says customers are loyal, especially after companies have proven their reliability.

More than 30% of rgo47’s monthly transactions come from returning customers.

Win believes that the reason they have such a high retention rate is because her company constantly seeks ways to cater to customer needs.

“Customer satisfaction is the only metric that really counts for us,” said Win.

Customer-obsession seems to be working as the company is currently experiencing two-folds growth in its annual number of transactions and expects volumes to increase as more Burmese pick up online shopping habits.

Possibilities for the future

Despite the hardships that come with nascent markets like Myanmar, Win feels optimistic about the possibilities yet to be explored in ecommerce and its potential impact on communities.

A big determinant of ecommerce success in the country rgo47 believes is working together with experienced ecommerce firms from other markets to learn and apply their best practices.

Win also encourages foreign players to get their hands dirty and enter the market while it’s still early to reap the most benefits.

“The Myanmar people are smart and very curious about new tech experiences,” says Win.

“Many companies hesitate to enter Myanmar because they think the people or the market is not ready but if you’re waiting until they’re ready, it means you’re already too late.”