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Online shopping site rgo47 eyes a growing market

When Royal Golden Owls Co. launched the 27th SEA Games Myanmar T-shirt in 2013, it was a hit across the country. To meet soaring demand for the T-shirts, which sported the games’ owl mascot, Royal Golden Owls turned to rgo47 to give consumers the option of ordering online.

One of Myanmar’s first online shopping platforms, rgo47 was launched the same year. “At the time, online shopping was strange for everyone. It was still in its very early stages,” said U Aye Chan, chief strategic officer of rgo47.

Since then, the business has grown. With the development of Myanmar’s telecommunications sector, the retail market has made a big shift towards online shopping. Increased public awareness and economic development have also contributed to the growth of e-commerce.

Yet, e-commerce in Myanmar must develop further before it is a truly competitive, productive and safe digital ecosystem for buyers and sellers. That represents a good opportunity for growth at rgo47.

“E-commerce will definitely develop more in the next three years,” said U Aye Chan.

“The plan of the company is to expand the business. We want to stay ahead in shifting to e-commerce. We have to quickly carry out improvements and expansion in all sectors, from the IT system to delivery,” U Aye Chan said.

Focussing on fashion

The Yangon metropolis remains a major market for e-commerce. Some e-commerce platforms are targeting specific product categories, with rgo47 focussing on fashion. It offers delivery services in 230 towns across the country.

At present, although 80 percent of payments on e-commerce platforms are made in cash, more digital payment systems are expected, U Aye Chan said. As for deliveries, today’s orders are guaranteed to arrive tomorrow in Yangon and in 1-3 days in other places, depending on the distance. Customer service has also improved, he said.

The potential for e-commerce growth in Myanmar has not gone unnoticed. Daiwa PI invested in rgo47 in March. Under the agreement, Daiwa didn’t declare a specific amount for the investment. “They invested because rgo47 has value. We understand the local market. There are many things to do to be suitable for the local market,” U Aye Chan said.

Last year, Alibaba Group bought Daraz, which operates the e-commerce platform shop.com.mm in Myanmar. Such investment is absolutely essential for the country’s e-commerce development, and leads to a safer, more competitive market and more options for shoppers.

“Investment is associated with market competition. Operating with foreign investment is important rather than operating locally. We need a level playing field and a more complete ecosystem in which to grow, U Aye Chan said.

Although rgo47 and other e-commerce businesses offer shopping via websites and apps, online retail still depends mainly on Facebook, which is still the country’s most popular site for online shopping.

“We mostly depend on Facebook. We offer promotions with discounts on our apps and websites to encourage people to use them, but most online shopping is done on Facebook and Messenger,” he said.

As the country’s e-commerce sector develops, the businesses in the sector are growing as well, he said. Online shopping depends on four main areas: connecting with suppliers, customer service, making deliveries and collecting payments. This requires a more robust digital ecosystem, which is currently lacking in Myanmar.

Addressing trust issues

However, the biggest challenge is to gain market trust, he said. “If I’m to describe the challenge in just one word, it is trust. Trust deals with everyone doing e-commerce, and a collective effort is essential to building trust. We view this challenge as an opportunity to try to establish trust in the market,” U Aye Chan said.

In response to this challenge, the government is writing an e-commerce law to regulate the fledgling e-commerce market. Currently, people are doing e-commerce by getting business licenses.

“Rules and regulations are needed to prevent fraud and cheating of customers, and unregistered selling. On the other hand, as it is an electronic-based industry, I’m worried that rules that are too strict may retard its development,” he said.

The private sector has established the Myanmar e-Commerce Association with the aim of promoting and developing e-commerce in cooperation with the government, building consumer trust, and producing certified goods.

Although e-commerce is a tiny part of the country’s economy, it has good potential, U Aye Chan said, adding that the growing use of the internet and smart phones by Myanmar consumers will help the industry to flourish.

Source: Myanmar Times

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