E-commerce market’s slow and steady rise

Rapidly improving internet and connectivity rates are bringing more people online, but changing shoppers’ preferences is still a struggle for online shopping businesses.

Companies are crowding in to online shopping in a bid to be Myanmar’s version of Amazon or Alibaba. With all the competition, though, it is increasingly difficult to stand out in an industry that is only now finding its feet.

Zaw Gyi Mart has been around for two years, but counts only 10,000 total users since its inception, said U Zaw Min Aung, managing director of parent company Za Information Technology.

Zaw Gyi Mart links users with IT gear, fashion items, beauty products – even helium balloons. The firm hopes to stand out by not charging for product delivery within the Yangon area, with plans to eventually expand this service to other areas. It also supports its customers with exchanging defective products under warranty.

“I believe e-commerce will keep expanding in Myanmar, because the internet connection is becoming faster,” he said.

While local online stores are inspired by international giants, there are important local differences. Myanmar is still largely a cash society, and the different technologies such as credit cards and online secure payment have been slow to emerge. Requiring a payment for a good before receiving it means the buyer may be at risk if the store does not deliver, while the store may be left with un-paid-for merchandise if it requires payment after the fact.

At Zaw Gyi Mart, customers can pay using cash on delivery, money transfers through banks, online payment, mobile systems and MPU cards.

There is also a problem of logistics. Many goods sold at online shops are not stored in the country, and must be imported from overseas, requiring a significant turnaround time. Transporting goods through Yangon to different addresses can also be uneconomical for stores. Potential customers say the concept will take some time to catch on.

U Win Ko Oo said people are still gaining the knowledge of e-commerce necessary for consumers to make extensive use of online services.

And Ma Khin Khin Thet said Myanmar people like to shop by testing products in person rather than trust ing online stores.

“It’s a very niche market in Myanmar for e-commerce,” said U Kyaw Aye Naing, owner of online shopping site Shwe99. “People would like to feel and see traditionally before they buy any goods. And also sizing is one of the issues for the clothing market.”

Shwe99 – a purely online store that sells clothing, electronics, fashion accessories and more, and also takes customer requests for products not on hand – came online in 2011, U Kyaw Aye Naing said. The site logs about 100 to 150 site visits monthly.

Whether shopping and shoppers move entirely online can also depend on industry – and who is involved. While many local online shops are essentially only a Facebook page and a creator, there are also bigger, foreign-backed firms involved in the business.

Rocket Internet’s Myanmar vehicle marketplace Motors.com.mm sees about 160,000 visitors a month, according to the company’s country manager Rianne Roggema, and Amazon lookalike Shop.com.mm – which offers home goods, tech, clothing and more – gets more than 10,000 site visits per day.

Meanwhile, about five users make purchases per day on Yangon Online Store, according to a company official. Its sales range from Apple products to power tools. Another platform, Myanmar Online Store – where customers can find a range of IT, household, health and beauty products and more – receives about 3000 to 10,000 monthly visitors, said its co-founder U Nyan Min Aung. And a recently launched online store for grocery shopping has been visited more than 2800 times.

Yet the number of hits alone does not define online commerce – and offline browsing can remain crucial to online business.

“Nobody would ever buy a car only for seeing six pictures and a description,” Ms Roggema of Motors.com.mm previously told The Myanmar Times. “With fashion, for instance, you can do that … We’re not even trying to take this physical contact away, because that’s never going to happen.”

The company recently held a press conference announcing a US$25 million capital injection in global classifieds platform Carmudi.com, whose Myanmar arm is called Motors.com.mm. The investment will be spread among Carmudi properties in eight countries, seven in Asia. It remains unclear how much of that money the Myanmar market will see.

While Myanmar’s infrastructure cannot yet support the entire ecosystem around online businesses – some, like Zaw Gyi Mart, have made headway with users.

Online grocery shop Daily Mart, which lists more than 1400 products and averages 48 daily site visits, has eclipsed
32,000 page views since its debut in January, according to founder Ko Htut Thant Syn.

Though some user ranks remain minimal, still stats show that progress has been made in a short time.
“The e-commerce industry is growing in Myanmar with the help of better internet penetration and growing mobile-phone usage density. People are already familiar with internet since social media like Facebook is getting very popular,” Ko Htut Thant Syn said. “When the online payment system comes in place, it will get much exposure and a lot of people will get engaged in shopping online because it saves time.”

The internet industry landscape has changed drastically since Erwin Sikma, Carmudi.com co-founder and global managing director, came to Myanmar more than two years ago. “When I started here, people sort of didn’t know what internet was,” he said.

Today, more than nine out of 10 professional dealers in Yangon, Mandalay and Nay Pyi Taw advertise their cars on Motors.com.mm, Ms Roggema said.

And about 8000 cars, motorbikes and commercial vehicles – put up for sale by more than 200 dealers – populate the platform.

Recently, users have also turned to mobile applications to head online.

Over the past half-year, Ms Roggema said, Motors.com.mm’s application has been installed more than 35,000 times, representing a 600pc jump in growth.

“[Myanmar is] still probably on a couple of aspects the least developed [market] in Asia, but it’s so extremely quickly catching up,” Mr Sikma said.

Since Myanmar opened up, the e-commerce market has gained some momentum – and entrepreneurs see movement ahead.

“I think e-commerce industry in Myanmar is still a little bit in the early stage, but we now have mobile phones and internet easily available to everyone. E-commerce will grow big,” said Daily Mart’s Ko Htut Thant Syn. “With the new job opportunities being created, people will get busy and they are looking for more ways to save time and e-commerce could be the answer.

“It could be one of the fastest growing industries in coming few years.”

Source: Myanmar Times

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