After superpower China announced earlier this week that it has banned Initial Coin Offerings (ICO), the value of bitcoin fell 11.4%immediately after. Circulating speculations claim the ban will impact the large amounts of capital raised from ICO, a total of more than $1.7 billion from January to early September 2017.

What is ICO and bitcoin? What impact does it have on businesses and why did China, one of the world’s most influential countries, ban something so lucrative?

What is bitcoin?

Invented by the then-unknown creator Satoshi Nakamoto in 2009, bitcoin is a ‘peer-to-peer’ electronic currency. It has no physical form so it does not require a central location to store.

In other words, bitcoin runs independently from banks and financial institutions and without any involvement from those institutions, bitcoin transactions are ‘free of charge’ but this also means if they get stolen or lost, there is no possible way to recover losses.

ICO Explained

Craig Wright, an Australian entrepreneur, who claimed in 2016 that he is Satoshi Nakamoto, creator of bitcoin. Source: The Economist.

Cryptocurrency is any currency associated with the internet that uses cryptography – the process of converting legible information into an almost uncrackable code, to track purchases and transfers.

Cryptography was created to cater to the need for secure communications in the Second World War. It has evolved in the digital era thanks to mathematical theory and computer science, to become a way to secure communications, information and money online.

Bitcoin was the first cryptocurrency, other examples include Ethereum and Ether.

How does it work?

To buy or sell bitcoin, users need to have a bitcoin wallet installed on their desktop or mobile devices. The identity of users are kept anonymous but transactions are tracked with digital identification comprised of a bitcoin address and a private key.

Think of your bitcoin address as a transparent safety deposit box. Everyone knows what is inside but only the private key can access it. These “safety deposit boxes” are public logs called blockchain.

How do you get bitcoin in the first place? Users typically take part in mining.

Mining is the act of verifying bitcoin transactions by contributing computing power to match private key to bitcoin address. Whenever a new block of transactions is created, it is added to the chain of blocks, hence the name. Still with us?

For comparison’s sake, blockchain technology  is similar to Google Docs.

Before the arrival of Google Docs, users could only edit documents via Microsoft Word one person at a time because two users couldn’t edit a document simultaneously. With Google Docs, both parties have access to the same document at the same time if they are provided access.

Blockchain technology is like a shared document, but it is a shared ledger.

What is bitcoin used for?

Blockchain solves two challenging problems associated with digital transactions: securing information and avoiding duplication making the technology widely applicable to multiple use cases.

It also eliminates all the pain points with transferring money through traditional methods: crossing borders, rescheduling for bank holidays, high bank fees, failed/dropped transfers, etc.

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don & Alex Tabscott, Blockchain Revolution

Because bitcoin allows users to stay anonymous, it has raised concerns in its application to facilitate drug deals, money laundering and illegal purchases. But as with all crime, there is a price to pay if caught.

“But if you catch people using something like Silk Road [bitcoin market], you’ve uncovered their whole criminal history,” Sarah Meiklejohn, computer scientist at University College London, says. “It’s like discovering their books.”

In more positive applications, tech giants like IBM are utilizing blockchain technology for information storage in healthcare, government, and supply chain for its accuracy and transparency.

Estimated spending on blockchain technology by banks in 2019 can be as high as $400 million.

ICO Explained

The price of bitcoin has fluctuated aggressively since it became popular in 2013 when prices rose by almost 10,000% before the biggest online bitcoin exchange sent it crashing.

Telegraph recently reported that there are currently 15 million bitcoins in circulation, each of which is worth $4,231 (as of September 2017). A single bitcoin’s sharp increase in value has many sceptics believing that we are in a bubble.

ICO Explained

Back full circle, what’s the big deal with ICO?

Similar to an Initial Public Offering (IPO), an Initial Coin Offering (ICO) is when a company offers a chance to invest in a new cryptocurrency. Instead of trading shares, companies exchange their newly created cryptocurrencies, known as tokens in ICO…essentially, code.

An example would be OmiseGO ICO in August, when the payments company raised $25 million selling its OMG tokens. Since then, many news outlets are reporting millions of dollars raised in selling cryptocurrencies in a matter of a few hours.

China banned ICO because its legality is described as ‘undefined’ and it was only in July this year that US regulators began looking into it.

According to Sun Guofeng, director general of the Chinese Central Bank, banning ICO was a necessary move to stop illegal fund raising.

China-based ICOs raised about $400 million through 65 offerings with more than 100,000 investors. If it all came crashing down, China would be in hot water.

What is the future of ICO around the world and in Southeast Asia?

To clarify, holding cryptocurrencies in China by private parties is still legal. The People’s Bank of China only makes it illegal for financial institutions to hold or transact in them. It does not mean that there is no opportunity for Chinese developers and service providers in cryptocurrency.

While countries are slowly trying to control ICOs, the Southeast Asian market sees bitcoin as an opportunity to improve the financial maturity of its citizens, over 70% of whom are unbanked.

Singapore has been dubbed to be the next ICO hotbed given its a favorable location for startups, favorable regulatory standards, and supportive tax measures.

And developing markets like Vietnam are embracing digital currency as showcased by smart vending machine startup Dropfoods that announced its ICO this week and Myanmar’s SKYBIT that aims to open the country to a global market through bitcoin.

Bitcoin is not evil. Digital currency is not the bad guy. What has fueled the “ICO bubble” uproar is the excessive optimism that is outweighing rationality that usually comes with smart investing.

Tokens purchased by “investors” in an ICO can be used to transfer value within the new coin’s ecosystem, or to other cryptocurrencies’ ecosystems. The problem is that there is a high likelihood these ICO projects will fail. Why?

Take it from the creator of a famous cryptocurrency.

“Many firms are issuing a coin not because it makes sense to do so, but because they have a product they can sell quickly.” – Ethereum founder Vitalik Buterin

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 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:

1. Grab starts full operations in Myanmar

After four-month trial period, Grab has begun full operations in Myanmar by launching localised apps with new safety and technology features.

Myanmar is the seventh market for Grab where it already has 5,000 drivers registered in its Myanmar’s network. The drivers is said to have seen 30% growth in their average income during the trial period.

Grab is also rolling out GrabVenue terminals at major shopping malls in Yangon that will allow customers without a smartphone to access the service.

The company claimed to have more than 1.1 million drivers in 65 cities across the seven countries and has recently raised $2 billion to strengthen its operations in Southeast Asia.

Read the full story here.

2. Malaysia’s parliament passed two bills legalizing e-hailing services 

Malaysia’s parliament passed two bills that will legalize the e-hailing services like Grab and Uber in the country.

The amendments will allow the services to operate on an “intermediation business license”, a new category specific for the service.

The new license will regulate “the business of facilitating arrangements, bookings or transactions of an e-hailing vehicle whether for any valuable consideration or money’s worth or otherwise”, according to Malaysia’s Land Public Transport Act and the Commercial Vehicles Licensing Board (CVLB) bill.

The bill is supported by the cabinet even as taxi driver associations protested. The CVLB had previously declared that both Uber and Grab drivers were operating illegally in the country.

Read the full story here.

3. Amazon’s entry into Singapore marred by delivery problem

The company is unable to deliver goods to customers in Singapore after introducing its Prime Now two-hour delivery service in the state-country.

As of Friday afternoon, its Prime Now app was telling users that “delivery is currently sold out. Check back soon.” The service appeared to go down hours after its official launch on Thursday, according to media reports.

The company launched Prime Now app for customers in Singapore where they can shop and get tens of thousands of items delivered to their door with free delivery on orders of more than S$40 ($29). The service is available for trial for free for a limited time in Singapore, before the company rolls out its Prime membership program.

Read the full story here.

Here’s what you should know today.

1. Alibaba Group invests in delivery startups

Alibaba Group is boosting its efforts to grab a slice of China’s growing online grocery retail sector.

Alibaba will use start-ups courier businesses, which works much like Uber for delivery, and similar to Instacart to tackle the growing demand for online grocery shopping

The start-ups run lean, with little infrastructure. When a customer logs onto the Alibaba website or app and purchases groceries, they will send contractor couriers to supermarkets, convenience stores and local groceries, where store employees bag the orders for the courier to pick up.

Read the rest of the story here.


2. Uber and Grab poised to launch in Myanmar

Southeast Asia’s ridesharing war is spreading to a new frontier after rivals Grab and Uber revealed plans to expand into Myanmar.

This marks Grab’s first international expansion in three years

Myanmar is unique because it has gone from zero internet access to widespread adoption, creating an open field of opportunities for businesses, after the country emerged from decades of military rule. Mobile operators have entered, along with the rise of chat apps and social networks. However, taxi apps have yet to take off-this should be the next step towards change.

Read the rest of the story here.


3. Amazon to expand counterfeit removal program in overture to sellers is expanding a program to remove counterfeit goods from its website this spring.

As early as next month, any brand can register its logo and intellectual property with Amazon so the company can take down listings and potentially seller accounts when counterfeits are flagged.

The move reflects Amazon’s efforts to court increasingly important third-party sellers

Amazon is also offering brands a program called “Transparency,” which lets them label packages with a code so shoppers can cross-check their purchase against official information.

Read the rest of the story here.


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., 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. 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.

Rocket Internet is hiring for its four ventures in Myanmar to keep up with the country’s growth, reports Deal Street Asia.

Rocket Internet will be expanding operations and hiring more positions across all of its Myanmar based companies, they are as follows:

  1. – job search portal
  2. – real estate listings
  3. – automobile listings
  4. – classifieds

Rocket Ventures entered Myanmar in 2012 and was among the first foreign tech ventures in the country, even before the foreign telecom operators officially entered the market in 2014. The market is now growing rapidly, and Rocket wants to make sure they have the bandwidth to accommodate increasing demands.

The expansion of suggests that the market is heading towards a more sustainable economy with consumers looking into auto purchases, buying auto insurances and managing car loans.

The telecom market is also accelerating as Myanmar internet penetration increased with Myanma Post and Telecommunications (MPT) reaching 20 million users by the end of June 2016. The two foreign operators, Telenor and Ooredoo have also recently launched their 4G network. Telenor has 16 million customers in the country while Ooredoo has 6.9 million users.

As foreign operators have taken a large share of the telecom industry, this blocks a lot of growth for local players to take their share of the telecom pie.

Rocket Internet refused to disclose exact investments figures, but are committed to staying ahead in the ecommerce space by increasing their footprint.

Rocket Internet recognizes the significance of telecoms’ role in online retail, and have partnered up with Ooredoo for’s first mobile sale this year.

Among the four ventures of Rocket, and have the highest number of visitors as they appeal to a broader group of people who are looking for a job or trade goods on an ongoing basis.

Data shows majority of visitors are accessing the site from their mobile phones.

Rocket Internet’s decision to expand operations may be linked to the increasingly competitive nature of the ecommerce market in Myanmar, as their business models are very simple and have low barriers to entry.

A version of this appeared in Deal Street Asia on July 18. Read the full version here.