Humble founders of digital startups can take heart: Just because a deep-pocketed foreign company plants web stakes in a less developed country doesn’t necessarily spell doom for the little guy. There’s a significant proviso, though, that wasn’t true a decade ago: the first mover startup needs to attract generous angel investors pretty early on.
Despite Rocket Internet’s formidable funds and experience, the German company’s taxi-hailing app company, Easy Taxi, in December pulled out of Indonesia and Hong Kong and decided not to launch in India after setting up preliminary operations there. There are signs that Malaysian operations could well be the next to fold. That wouldn’t be surprising since Kuala Lumpur is the home of GrabTaxi founder Anthony Tan. His app first launched there, as MyTeksi, in 2012. In Jakarta Easy Taxi couldn’t compete with the apps of GrabTaxi and the Blue Bird taxi group’s own app. (In Hong Kong local startups Taxi Hero and Fly Taxi and Alibaba-backed Kuaidi Dache drove out Easy Taxi.)
When I spoke with Tan last March, he described GrabTaxi in terms of the Biblical David taking on Rocket’s Goliath–a German Goliath with a strong track record in Latin America and seemingly an unlimited budget for promotion. (Granted, with a Harvard MBA, formidable advisers and two preceding generations involved in auto industries, Tan has more than the usual advantages). That was right before a group led by Temesek’s venture arm provided Series A funding, rumored to be $10 million, in GrabTaxi. By the end of the year, the company had raised almost $340 million in venture capital and loans and was operating in 17 cities in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. Easy Taxi only has $77 million to serve about 162 markets in 32 countries.
Car Classifieds in Myanmar and Malaysian VC
Now we have the case of a small Myanmar online classifieds site, MyanmarCarsDB.com. Started by three Burmese friends in a Singapore apartment three years ago, it has pulled ahead of Rocket’s Motors.com.mm in visitor traffic, despite Motors.com’s more up-to-date minimalist site design. In recent months, the two rivals have each been attracting about 2,000 visitors from desktop computers per day (see traffic graph below), although MyanmarCarsDB was the winner in January with 65,000 page-views, according to data from SimilarWeb. The site currently attracts 51% of the traffic of five sites strictly devoted to buying and selling vehicles, while Motors.com has a 44% share.
Of course, the online editions of Burmese newspapers carry auto classifieds too, as does the ever-popular Facebook. The race is hardly over. Like the region’s taxi-hailing apps, it is unlikely that any of these car sites are yet making a profit: the game is to win dominant market share. And Rocket just raised another $25 million to expand its vehicles classifieds sites, usually known as Carmudi, in Asia and Mexico.
MyanmarCarsDB, the country’s first online auto marketplace, launched just at the right time. That was in early 2012, shortly after the Myanmar government drastically reduced import duties on vehicles–thus creating, in record time, the awesome Yangon traffic jams we enjoy today. According to the company’s CEO, Wai Yan Lin, the number of registered cars in Myanmar has more than doubled since 2011, so that there are more than 600,000 today. MyanmarCarsDB says it lists 40,000 vehicles on its app and website.
Early on, MyanmarCarsDB got $160,000 in seed funding from several Singaporean investors, according to Wai Yan Lin. It had to ramp up its efforts when Motors.com got serious in mid-2014. Like Rocket’s other sites in Myanmar, Motors.com’s had been little more than a placeholder site since some time in 2012 when they all popped up. Last December MyanmarCarsDB won an endorsement that could keep it in the forefront: Malaysia’s Frontier Digital Ventures took a stake with a dollar investment “in the upper six digits” according to Wai Yan Lin.
MyanmarCarsDB gets more than money out of the deal. Frontier CEO and co-founder Shaun Di Gregorio has a wealth of experience with classifieds sites in Southeast Asia. Shortly before founding the venture fund last May, he left his position as CEO of Malaysia-based iProperty Group. He has long been associated with another Australian, Patrick Grove, who is an investor in Frontier.
The closest thing to a Southeast Asian internet mogul, Grove is the co-founder and chairman of three companies listed in Australia but with primary operations in Southeast Asia: the iProperty, Ensogo (formerly iBuy) and iCar Asia groups. ICar Asia encompasses autos classifieds sites and online magazines in Malaysia, Indonesia and Thailand. Di Gregorio has also invested in a Pakistan automotive site, PakWheels.com, as well as in iMyanmarHouse.com, which competes with MyanmarCarsDB’s sister site, MyanmarHouseDB, as well as awith Rocket site, House.com.mm (Still with me?). For Thailand, iCar Asia’s acquisition of One2Car.com last November for US$14.4 million in cash and equity was one of the biggest digital deals of 2014.
Android Apps and Advertisements
Maybe MyanmarCarsDB could follow the same route? “We are working very closely with Shaun to bring success to our startup. Our main objective is to become the most reliable and No.1 go-to source for all automotive related business in the country. We are very focused on our goal and would love to run the business for a long time. But when the time comes, we might consider any offers which is reasonable for everyone,” said Wai Yan Lin.
The new investment will hasten the release by the end of this month of a new Android app that will enable users to post an auto listing within the app, produce search results, and set up a wish list. The site has also started advertising on city taxis in Yangon, distributing posters at car marketplaces in Yangon and running weekly social media campaigns.
As for competition from Motors.com, Wai Yan Lin says, “We knew that we had to fight against the internet giant. But we believe that we have our own advantages. One of our main advantages is that we use our international experiences together with our deep understanding of local market. Since we launched, we are very focused on simplicity, user friendliness and localisation. We understand exactly what local people want. We build the product that could be used easily for local people, even for some people who are very new to internet. We always provide better customer services.”
FoodPanda Eats Up Room Service, City Delivery
On the other hand, looking at Rocket’s sweep this month, for an undisclosed sum, of online restaurant delivery services in Malaysia, Philippines, Singapore, Thailand, Hong Kong and Pakistan may be discouraging for the small entrepreneur. In most cases, though, Rocket Internet’s FoodPanda didn’t buy out homegrown startups; it acquired venture capital-funded regional companies that sometimes had earlier acquired smaller local ones.
Food Runner operations in Singapore and Malaysia, known by the Room Service brand, had been acquired and then spun off from Singapore’s DealGuru e-commerce site in 2013. DealGuru had been started with venture capital from Berlin’s Rebate Networks and Singapore’s Digital Media Partners (DMP) in 2012. As for Philippines’ City Delivery–which which delivers groceries as well as restaurant meals in more than a dozen cities–that was bought by Food Runner last year. These services may continue to run under their own brands but will folded into the FoodPanda operations in Malaysia, Philippines and Singapore. Rocket this month also bought Hong Kong’s Koziness group aka iDelivery, which had already gobbled up the little locals Dial-a-Dinner, SOHO Delivery and Ring-a-Dinner.
That leaves Bangkok’s FoodbyPhone as the hometown business flattened by the mammoth multinational. Founded by expats in Bangkok, FoodbyPhone began delivering meals back when customers used phones and faxes to initiate transactions. Foodpanda added more restaurants, widened the Bangkok metropolitan delivery and also started or acquired services in Pattaya and Chiang Mai. Although FoodbyPhone was widely known, I can’t say it was widely popular. Perhaps people just don’t want to admit they use any restaurant delivery service. Whenever I bring up the subject, the typical response from Thailand residents is puzzlement. Usually, they wonder, “Why would you use such service, when you can just call a restaurant directly and pay a motorcycle taxi guy for delivery?”