Myanmar is not the first market that comes to mind when talking about Southeast Asia’s $238 billion ecommerce potential. Subject to political turmoil for most of its recent history, the internet has been a luxury the Burmese have had access to for less than a decade — a very late start compared to its Southeast Asian neighbours and the rest of the world.

After the ‘Mobile Revolution’ in 2014, Myanmar recorded a rapid increase in mobile phone penetration to 83% in just 5 years. Right now, there is an estimated 46 million plus active mobile subscription in the country with 54 million people.

By 2018, the market is expected to reach mobile penetration of over 90%.

With such robust growth and clear demand to go digital, the country is attracting the attention of tech-entrepreneurs and VCs that don’t mind getting their hands dirty. Gmail only recently began supporting the Burmese language on its platform.

Omidyar Networkrun by eBay founder Pierre Omidyar – recently granted $2 million in funding for Phandeeyar, Myanmar’s first tech hub based in Yangon. The hub recently launched a startup accelerator program to help the growth of early-stage startups in the country.

What else should companies eyeing Myanmar understand? eIQ assesses one of Southeast Asia’s last untouched markets for its ecommerce potential.

Myanmar, a mobile-only market

The entrance of two foreign telecom giants — Telenor from Norway and Qatar-based Ooredoo — ended the monopoly of the state-owned company, MPT (Myanmar Post and Telecommunications) and brought down the price of SIM cards.

The Burmese can purchase a SIM card for as little as $1.50 today whereas it cost them $2,000 5 years ago.

With the outpour of cheap smartphones on the market and coincidentally, the rise of tech in Yangon, Burmese mobile users have leapfrogged the basic phones in favor of smartphones causing the country’s internet penetration to skyrocket.

Myanmar not only has the quickest growing number of internet adopters compared to other Southeast Asian countries, it’s also a mobile-only country – many households would rather have two or more smartphones on hand than owning a desktop or laptop.

It’s no surprise that mobile ownership in Yangon was 83% of 15–65 year olds in 2016.

“Myanmar is coming online, it’s coming online via mobile, and it’s coming online via smartphones,” comments David Madden, founder of Phandeeyar.

myanmar ecommerce potential

Source: Quartz | IDC

The impact of these factors has increased the percentage of Internet users and mobile social users drastically since January 2016 to this year as noted by WeAreSocial below.

myanmar ecommerce potential

The growth in social users has been so significant that the Burmese identify Facebook as the internet itself.

Facebook-first country

Sporadically banned in the country until only three years ago, Facebook boasts a strong 84% year-on-year growth in Myanmar, one of the highest in the world. There is an estimated 14 million active monthly Facebook users – roughly the same number as the country’s internet users.

myanmar ecommerce potential

A mobile-shop owner in Myanmar comments,

“Nine out of ten people who come into the shop want Facebook. Nobody needs a special app for their interests. Just search for your interest on Facebook. Facebook is the Internet.”

The country is also a testing ground for one of Zuckerberg’s controversial initiative, Facebook Basics and Facebook Flex, in collaboration with MPT. It allows unlimited surfing on certain sites and use of Facebook in a data-free mode.

As with others in the world, the people in Myanmar are using Facebook to get news and interact with friends and reach wider networks. But amid the country’s growing online maturity, it’s important to note that less than 20% of mobile phone users are browsing the internet.

Not even 10% are using their emails – or even know what email is.

Phones in Myanmar are still used primarily for its basic functions, calling or texting according to the latest joint report of GSMA and LIRNEAsia, Mobile phones, Internet, and Gender in Myanmar, even though most own a smartphone.

How can emerging markets get people to adopt online behavior?

Chatbots and gamification to propel digital habits

Knowing that the Burmese have a Facebook-first mindset, it makes sense for businesses to open a shop on the platform and focus online marketing efforts there. Current successful examples include Juno Myanmar Fashions and BangBang.

Shop.com.mm, the self-acclaimed number one ecommerce website in Myanmar, has more than 68,000 pageviews per month with 18% of the traffic coming from social media. The company is German venture Rocket Internet’s first ecommerce venture into the country three years ago, alongside several of its sister companies.

Shop.com.mm has spent 60% of its marketing budget on Facebook ads but strangely, not selling products through the platform. Creating a catalog page and implementing a chatbot on Facebook Messenger or Viber would bring awareness to the Burmese about online shopping as they spend most of their time there.

To leverage the popularity of mobile games, companies could gamify their campaigns to attract more users. An example would be creating a wide array of quizzes on Facebook distribute online discounts or coupons; M&M’s in the US has used this strategy successfully multiple times.

myanmar ecommerce potential

Source: M&M’s gamification of a campaign to increase levels of engagement.

Companies looking at Myanmar need to adjust their online offering to match the current internet behavior of the Burmese.

What’s in store for Myanmar?

Even if all the people of Myanmar decided to try online shopping, there is still the problem of underdeveloped infrastructure to tackle.

The country’s low banking penetration is echoed by many other Southeast Asian countries. And despite offering cash on delivery, a more sustainable and cost-efficient payment method solutions is still needed.

Various companies take part in trying to resolve this issue including WaveMoney, MyPay, 2C2P and OK Dollar but banking services are still only used by 2% of mobile owners.

Yangon Door2Door tries to solve the delivery problem in Myanmar where the operations of the motorbike in the urban area is banned by using bicycles to deliver food. The model could be adapted to deliver other types of smaller parcels.

Although the market is far from ready, the tenacity of which the Burmese adopted the available technology to get to its current state right now is very encouraging. Like how they surprised us with their smartphone maturity, it’s not impossible for them to do the same with ecommerce.

“Most countries go from traditional trade to modern retail to ecommerce. We could jump over that. Instead of opening malls, Myanmar could leapfrog directly to ecommerce.” Kiren Tanna, former CEO of APACIG, Rocket Internet’s subsidiary group in Asia Pacific told Forbes.