Myanmar businesses slow to adapt to improvements in Internet

Our study of the Myanmar industry shows that Myanmar businesses are still lagging behind in the use of Internet technology.

We studied 72 audit/accounting firms and 44 law firms in Yangon and were flabbergasted to find that 93% and 68% respectively do not have websites and 70% of them are still using Gmail. Our study of 21 business travelers at Yangon Airport showed that 81% & 71% respectively would not use a professional firm (such as an auditing/accounting or a law firm) if they do not have a website or corporate email.

What we found was that among Myanmar companies and even government agencies – use of Gmail was an accepted way of business communication. Many Myanmar business people are not aware of the poor image that is being communicated to foreigners about their business when they do not have a corporate website or email.
According to one established foreign marketing executive, many local businesses have still to be convinced of the value in modern marketing communications such as PR campaign or a good corporate website. Potential partners and clients in other countries will make a Google search of an industry category prior to coming to Yangon. “Myanmar firms that do not appear in a search result will miss the opportunities,” the executive added.
It could be because of 50 years of under investment in telecom infrastructure has led Myanmar people to not depend on the internet as it was not working properly for the last decade. It was after the economic reform and the entrance of Telenor and Ooredoo in end of 2014 that we see the mobile and Internet market facing competition and improving it service and reliability.
The next area we look at is the adoption of online booking and payment system in the hotel industry. In our study we focus on the hotel industry as we felt that it was a good proxy for how local Myanmar business is adapting to the improving internet infrastructure in Myanmar, as the hotel industry is most affected by the expected influx of 5 million tourist in 2015 – a 67% increase over the previous year and has every reason to upgrade its IT infrastructure.
We interviewed 21 business travelers and 31 Free Independent Travelers (FIT) at Yangon Airport in early October about how they book their hotel prior to their trip to Yangon. We found that over 90% of the travelers book their hotel prior to the trip. We also found that over 50% of the travelers that book online would not book a hotel if it does not accept online payment.
Our initial study of the 3-stars hotels in Yangon all of which are owned by Myanmar citizen shows that most hotels are not investing in IT systems to promote their business online. Instead they prefer to let third party hotel room booking sites such as or handle their room bookings and thereby give up a portion of their sales as commission to the third party hotel room booking sites.
Intrigued by the result, we dug deeper and studied 51 3-stars hotels in Yangon and found that 40% do not have websites and 82% do not accept online payment. 94% of these hotels are represented on third party hotel room booking sites such as or The third party hotel room booking sites charge the hotel a commission of up to 17% for any room booking conducted through their website. This 17% commission is the cost to the hotel of not having their own website with online booking and payment facilities.
Our research shows that due to the dysfunction banking system in Myanmar and previous bad experience with demonetization and bank runs – Myanmar people have learned not to trust the bank. It is estimated that less than 20% of the population have a bank account. So Myanmar people have no experience operating a bank account, writing cheques, using an ATM or making purchases using credit card. The element of trust that is so important for modern banking and for e-commerce system to work is unfortunately not present in Myanmar. It does not mean that online banking or e-commerce will not be possible in Myanmar. It just means that it will be harder and it will probably take longer for them to take root in Myanmar.
Online shopping is in its infancy in Myanmar with companies such as Rocket Internet’s and among those trying to get established. However, online payments are not easy, as few consumers have bank accounts and there are no locally-issued credit cards. Vendors need customers to prepay in cash or offer cash on delivery. Online retailers serving Yangon face an added constraint, the ban on motorbikes; a ban that does not apply in other cities. Online retailers therefore need to find a cost-effective system of goods delivery and of handling cash-on-delivery.
With the opening up of the telecom market in end 2014 to competition the penetration of SIM card in Myanmar has grown from 7% in 2013 to 54% in March 2015. The exploding penetration of smart phone in Myanmar has meant that Myanmar has made technological leaps in the area of messaging from using SMS to Viber/WeChat, in the area of one-to-many communications young people update their Facebook status instead of blogging or email, in the area of facsimile from using fax machine to snapping a photo of the document using their smart phone and then sending the photo to a business associate via email or Viber.
As to whether Myanmar people can make that leap to mobile banking and e-commerce – it is yet to be seen. However one thing for sure is that companies such as Red Dot (a mobile payment company), Rocket Internet’s, telcos such as Telenor and Ooredoo and local banks are all working hard to make online banking, online payment and e-commerce a reality in Myanmar.
The future of online banking and e-commerce is bright in Myanmar however you need to have deep pockets, strong convictions and a very patient and understanding shareholders to make it work


Author: Jonathan Millar
Jonathan Millar is a graduate from University of Otago (NZ). The above article is part of a research project that Jonathan was involved in as part of his internship at Consult-Myanmar Co Ltd in Yangon.

This article was also published in Myanmar Business Today Journal at

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