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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.”

Here’s what you should know today:

1. President of Indonesia signed the ecommerce road map

President Joko “Jokowi” Widodo has signed the long-awaited ecommerce road map that was expected to be issued at the end of this year

The road map will provide guidelines for the country’s digital economy sector, including issues such as payment, logistics, cyber securities, taxation, human resources development and consumer protection.

The ministry was also designing a measure to record online transaction information from the marketplace, in coordination with the Finance Ministry, Central Statistics Agency (BPS) and Bank Indonesia.

Read the full story here.

2. Facebook enters China with photo sharing app

Facebook is testing a photo-sharing app called Colorful Balloons in China after banned in the country since 2009.

Colorful Balloons works like Facebook’s Moments app by allowing users to share photos with friends and family members.

However, instead of using Facebook’s interface, it relies on WeChat, and was released by a local company called Youge Internet Technology.

Read the full story here.

3. Indonesia’s niche ecommerce players attract JD.com 

Chinese internet giant JD.com continues to show its interest in the market by pursuing new partnership with niche ecommerce players in Indonesia. The company is also said to be open to making an equity investment.

JD.com is learnt to be interested in partnering with Laku6 although that relationship may not be an equity based one. The firm aslo recently participated in Traveloka’s $500 million funding round.

The rumour of its talks for investment in Tokopedia has been around for months with its rival Alibaba also showing interest in closing the deal.

Read the full story here.

Here’s what you should know today:

1. Facebook launches Watch, a tab dedicated for video content 

Facebook redesigned its video platform and renamed it ‘Watch’ to replace the current video tab. Over time the, tab will become personalised to users’ interest.

At the moment, Facebook is financing creators to make some shows appear in the Watch tab as to seed the app with original content.

But in the future, the company plans to make money by taking 45% of revenues generated by ads in this platform.

Read the full story here.

2. Softbank backs Flipkart in a record investment for India tech company

Flipkart confirmed that Softbank has invested in its business through Softbank’s $100 billion Vision Fund,

The deal will be part of an extension to Flipkart’s $1.4 billion financing round last April which counts Microsoft, Tencent and eBay among the backers.

Both companies didn’t disclose the details of the deal but hint that it’s the largest investment in India tech company and also put Softbank as one of the largest shareholders.

Read the full story here.

3. Co-working space marketplace FlySpaces secured $2.1 million pre-series A

Manila-based Flyspaces has secured $2.1million in pre-series A round led by angel investor Raymond Rufino, co-president of commercial property manager Net Group.

The company is planning to use the money to further develop its technology and fund its expansion in the region, especially Indonesia.

FlySpaces calls itself an “Airbnb for office and retail spaces”. It plays the role of middlemen between the property owner and the renter and take a cut of the booking fees.

Read the full story here

Here’s what you should know today:

1. Facebook will open an office in Indonesia

Indonesia’s favorite social network site Facebook will open an office in Jakarta later this month as part of the requirements for its operation in the country.

Samuel Abrijani Pangerapan, Communications and Information Ministry director general of information applications, said the office will be opened as a permanent business entity in South Jakarta.

Facebook will also establish specific business activities (KBLI) as required by the existing regulations for the type of business run by Facebook. The company also expressed its commitment to deal with prohibited content on radicalism, terrorism and pornography.

Read the full story here

2. honestbee celebrates second anniversary with regional expansion

Singapore’s online grocer honestbee celebrates its second anniversary this month by cementing its position as the largest and fastest fresh grocery ecommerce service in the region.

In addition to its groceries service, honestbee also expand to other business verticals like food and laundry. honestbee plans to become the most convenient on-demand services marketplace.

Within two years, honestbee has presence in eighth city, including Singapore, Hong Kong, Jakarta, Kuala Lumpur, Manila, Taipei, Tokyo and Bangkok.

Read the full story here

3. Recommended reading: Where are the Southeast Asian brands?

The latest BrandZ Top 100 Most Valuable Global Brands report revealed that tech companies are thriving, but it’s also exposed the absence of Southeast Asian brands in the global rankings.

However, the arrival of a brand in the global Top 100 from Southeast Asia should not be far as economies in the region grow, populations swell and mass mobile adoption levels the playing field (and reduces the cost) of delivering widespread reach.

Read the full story here

 

Here’s what you should know today:

1. Baidu partners with PayPal for mobile wallet service

PayPal is expanding its presence on mobile by pairing up with Baidu, allowing the Chinese company’s 100 million users to make payment to PayPal’s 17 million merchants.

The news is the latest in a series of partnership from PayPal after integrating with Apple and Samsung Pay, as well with banks Citi and Chase.

For Baidu, the partnership offers a way to increase the odd in their favor on the competition in China’s mobile wallet landscape that currently dominated by Alibaba’s Alipay and Tencent’s WeChatPay.

Read the full story here

2. Whatsapp hits 1 billion daily users, Whatsapp Status has more users than Snapchat

Chat messengers app Whatsapp records 1 billion daily users as revealed during the Q2 2017 Facebook Earning calls. The company only has 350 million daily users when it was acquired by Facebook in 2014.

Facebook has also successfully rolling out Snapchat’s Stories format to a much wider audience than the original inventor.

Instagram Story and Whatsapp Status are each used by 250 million people every day, meanwhile Snapchat only has 166 million daily users on its app. Facebook itself records 2 billion monthly users.

Read the full story here.

3. Snapdeal to sell its digital payment platform FreeCharge to Axis Bank

After accepting the buyout from Flipkart for $950 million, Snapdeal is also selling its digital payment platforms FreeCharge to Axis Bank for $60 million.

Axis Bank will have access to FreeCharge’s base of over 50 million mobile wallet users, its staff of about 150 – 200 and its resources and proprietary tech.

FreeCharge was first acquired by Snapdeal in 2015. The deal was reportedly worth about $400 million.

Read the full story here.

Here’s what you should know today:

1. RedMart hired ex-Amazon and Facebook exec as Chief Product Officer

Singapore-based RedMart has appointed Patrick Teo as its new Chief Product Officer (CPO) and Executive VP Engineering. Teo is hailed from Silicon Valley where he previously posted in as Head of Tech and Site Leader for Amazon.

His impressive CV also including Head of Engineering for Facebook’s Local and Entities division, VP Engineering for Shutterfly. Under his stewardship, the startup went public for IPO in 2006.

RedMart’s President, Vikram Rupani said that Teo’s appointment is “a stamp of validation for Singapore’s maturing tech ecosystem and the quality of our own engineering core.”

Read the full story here.

2. Uber fled Russia after $3.7 billion merger agreement

Uber and Yandex are merging their ride-hailing businesses in Russia. The former will invest $225 million and take a 36.6% stake in the new venture, leaving Yandex with a controlling stake of 59.3%.

“This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business,” said Pierre-Dimitri Gore-Coty, Uber’s Chief for Europe, Middle East and Africa.

Together, Uber and Yandex handle 35 million rides a month. The yet-to-be-named venture will be valued at $3.73 billion and the deal is expected to close in the last quarter of 2017.

Read the full story here.

3. CashCashPinoy shuts down in the Philippines

Founded in 2010, CashCashPinoy announced on its website that it’s “taking some time out from the spotlight.” The online company used to be a discount site offering its members bargains from various merchants.

The company has been the subject of numerous complaints of selling fake and low quality products as well as allegations of scams, leading to their payment partners like PayPal and BDO to pull the plug on the transactions coming from the site.

It is not clear yet as what to led to the shutdown of the business, although there has been a report about the company’s filing for bankruptcy posted on business rating and reviews site Jabber.

Read the full story here

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