I may have expressed doubts in the past about Rocket Internet’s claims to be the first mover in Asian countries. But when it comes to Myanmar, the giant German venture fund and startup cloner has made big strides very quickly. Since July, Rocket’s jobs classifieds site there, Work.com.mm has been racking up to 100,000 page-views per month, according to SimilarWeb.com’s research. That is twice the number of its only direct competitor, Myanmarjobs.com.mm (which, no, has no connection with the region’s Seek jobs empire).
More interesting, more ambitious and potentially much more lucrative is Shop.com.mm, a general merchandise retail site along the lines of Amazon or Rocket’s clones elsewhere in Southeast Asia, Lazada and Zalora. Then there’s Rocket’s two-year-old Daraz in Pakistan and Daraz Bangladesh, whose marketing push commenced around the same time as Shop.com’s. Even if Shop.com didn’t, as Rocket executive Kiren Tanna says, launch only a month ago, user traffic has steadily climbed since the beginning of October 2014, when the real marketing push set in. By the end of December 2014, the monthly tally was more than 46,000 page-views, with about 500 individual visits daily. That may leave every other Myanmar online retailer in the dust.
There’s no mystery about the appeal. While many online Burmese shops, like Juno Myanmar Fashion and the wide-ranging (with hot lines!) American Store, are hosted on Facebook and, less often, on the old school Web, they don’t have the number and variety of products that Shop.com does. Shop.com now lists 2,000 products and 100 brands, according to Tanna, who is the Singapore-based co-managing director of Rocket’s Asia Pacific Internet Group, a joint venture formed in April 2014 between Rocket and Qatar mobile carrier Ooredoo. What are the Burmese buying online? “Phones and fashion are selling well,” Tanna said. “So are electronics, TVs and appliances. Feature phones are still popular too.” (I would have guessed cosmetics and other “beauty” products would be way up there.)
Among the top brands are Acer, Bata, BangBang (Korean clothing), Oppo (mobile phones–and much more popular than Xiaomi in Southeast Asia, despite Forbes Asia’s anointment), Philips and Samsung, which conduct complementary marketing efforts. Those partnerships probably also enable Shop.com to offer lower prices, since the smaller Burmese operations seem to source by buying products in Singapore, Thailand or the United States.
Customers can pay on COD terms–cash payment on delivery. Since 95% of the Burmese lack a bank account, Rocket didn’t have much choice. COD still boggles my imagination but Tanna tells me that most customers in Southeast Asia prefer it, even if they have credit or debit cards. In the Yangon area, some of Shop.com’s 30-strong staff are employed in delivery; elsewhere in the country, it’s carried out by local services. Not being able to unearth direct competitors on research site SimilarWeb, I compared Shop.com with the Yangon Online Store, which I wrote about last April, and YangonBay.
Yangon Online is not a direct competitor since customers have to pay a visit to its physical store in the country’s biggest city. However, up until September 2014, Yangon Online’s website pulled more page-views than Shop.com. Shop.com only crossed over and surpassed Yangon Online’s page-views in mid-September, when traffic for each site was running around 2,000 page-views per month.
YangonBay is a conventional online retail store with several options for payments, including the PayPal-like MyanPay. Its range of products–apparel, electronics, “beauty and health”–is much narrower than Yangon Online’s, though. YangonBay’s viewers tend to look at twice as many pages as Shop.com’s do but, from a high of 4,000 page-views in July, YangonBay’s traffic slid below 1,500 views in December. Most of its viewers seem to be in Singapore too—most likely members of Singapore’s large Burmese population.
But what about Facebook?
But what about Facebook stores? every Burmese reader is asking at this point. Burmese at home and abroad are Facebook fanatics. Tanna says there are 2.7 million Facebook users in Myanmar. When I wrote about the Yangon Online Store eight months ago, one commenter pointed out, ”There is no equivalent of Ebay or Amazon yet, and I think one of the reasons is because Facebook [shopping] actually works very well. People apparently are reluctant to visit independent sites to do online shopping.” Many of these shops even offer COD terms.
Unfortunately, it’s difficult to trace traffic to Facebook shops, at least for the layperson. When I punch in the names of a Burmese Facebook shop into SimilarWeb, either the name isn’t recognized or I’m told there is “insufficient data”. The largish Myanmar Blog Shop website turns up “insufficient data” too. Then, even with regular websites, it’s not possible (at least for normal people) to count users accessing by mobile phones.
This is no small matter since, with the arrival late last year of the country’s first two private mobile providers, Ooredoo and Telenor, many Burmese are obtaining regular access to the internet for the first time with smartphones like Samsung’s and Oppo’s. According to Tanna,”Ten percent of the population had phones three to four months ago. Today it’s twenty-five percent. It will be fifty percent in six months.” To be sure, we don’t know how many of those phones are smartphones so, in short: you need to look at traffic to www websites in Myanmar with a few qualifications in mind.
Shop.com isn’t selling anything directly on Facebook but it and the Rocket (jobs, housing, cars) classifieds sites are relying on Facebook by running ads there. Sixty percent of Shop.com’s marketing budget is allocated online, most of it to Facebook. Since many Burmese access the Web from internet shops, Shop.com has also been training shop staff how to help customers that want to buy something online.
Leapfrogging the Malls
To the uninitated observer, it does seem like Rocket will have to wait many years to earn a profit from Shop.com or to merit purchase by a global player. Given that online sales now only constitute 0.1% of all retail sales in Indonesia, what are the prospects for little Myanmar with one-third the per capita income and a much more rudimentary consumer culture? Tanna’s answer: the proverbial leapfrog. He points out that 90% of Myanmar’s annual retail trade of $15 billion is now conducted by traditional mom-and-pop shops and 10% by “modern retail” such as department stores, while “the shares are reversed in Singapore.” (For Thailand, the breakdown is 50-50, he said, no doubt counting the 2,000 or so Charoen Pokphand 7-11s that must be siphoning off the trade of nearly every mom-and-pop shop and market stall in the country.)
“Most countries go from traditional trade to modern retail to e-commerce. We could jump over that. Instead of opening malls, Myanmar could leapfrog directly to e-commerce,” Tanna said. Some brands carried by Shop.com aren’t available off-line anywhere in Myanmar, so if someone hears of a product or sees a TV ad, buying online might become the first option that springs to mind.
Regarding the share of online sales to all retail sales, Tanna even made a grand prediction: “We expect Myanmar to be at the same level in one year as Thailand, Vietnam, Philippines and Indonesia. Or maybe slightly ahead of them.” Thailand’s online retail share is probably higher than Indonesia’s 0.1%. Thai e-commerce is growing fast and may have amounted to $1 billion last year, if Euromonitor forecasts prove correct. That would be somewhere around 1% of all retail sales. Can e-commerce in Myanmar grow ten-fold or twenty-fold in a single year?