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A Bhutan tech primer: early signs of startups and e-commerce

Thimphu TechPark in Bhutan

In our initial Bhutan tech overview, I provided a brief summary of the country, its unique circumstances, and its increasing openness to technology and startups. In this second article, I’ve reached out to the COO of Thimphu TechPark (pictured above), Tshering Dorji, and several others for an on-the-ground analysis of the Bhutanese tech scene.

Dorji has been with Thimphu TechPark since it opened in May 2012, and prior to that, worked at Bhutan Telecom, where he witnessed the country’s explosive internet and mobile growth firsthand.

In the 14 years since the Bhutanese government first allowed internet access, “people took to the internet almost like a fish to water,” he said.

Now that most subscribers have broadband connections, the popular applications are Facebook, online discussion forums, Twitter, news sites and blogs – not to mention the porn sites.

Regarding mobile, Dorji said that 3G coverage is available throughout Bhutan, including “some of the most remote villages” in the country. “In fact, foreigners are often surprised that there is mobile coverage even on the mountains and deep valleys of Bhutan,” he added.

A startup white elephant?

Back at the tech park, however, a January article in The Bhutanese newspaper claimed that the development was a “white elephant” and a waste of taxpayer dollars invested in the project. Few firms had come forward to rent space within the tech park besides the Bhutan Innovation and Technology Centre’s startup incubator. In that same article, Dorji was quoted as saying that “the rent paid by the incubatees isn’t even enough to cover the electricity bills.”

Thunder Motors electric car from Bhutan

Thunder Motors’ electric car is designed and assembled in Bhutan.

Still, he believes in the long-term viability of the tech park, and referred to several incubated companies making huge strides in Bhutan, in both hardware and software.

“Thunder Motors is one of our graduates, working in the electric vehicle sector, and they recently received funding from a big business group in Bhutan,” Dorji said.

While the components of Thunder Motors’ cars (pictured) were sourced from Germany, Japan, and China, the software development and final assembly took place in Bhutan.

Thunder Motors sold several of its vehicles to the Thimphu City Corporation (TCC) and the National Environment Commission for 600,000 Bhutanese Ngultrum ($8,856) each. There are nine charging stations set up at Thimphu TechPark, and plans are in the works to establish stations throughout Bhutan. Thunder Motors is looking even further afield, as it also plans to export electric vehicles to India, Nepal, and Bangladesh.

Early signs of Bhutanese e-commerce

Shop.bt ecommerce in Bhutan

On the software side, Dorji mentioned startup Shop.bt, a winner of their 2013 business idea competition, and an up-and-coming Bhutanese e-commerce pioneer. Shop.bt is the country’s first web platform for Bhutanese merchants to showcase their products online, and the first to allow customers to browse a massive inventory of products from the comfort of home. It currently points customers toward a store’s physical address to conduct the final transaction, however, so I reached out to Shop.bt’s co-founder, Damchey Lhendup, for further details on this fledgling almost-e-commerce business:

As of this moment, online ordering and payment is not supported, but it is one of our future goals. We are basically testing the waters right now and have been gathering feedback from users.

Several factors complicate web-based transactions and delivery in Bhutan, chief among them being the fact that “few Bhutanese have ever had the experience of purchasing products online,” Lhendup said. In addition, he cited the following additional barriers to e-commerce in Bhutan: acquiring a debit/credit card that works online, finding a bank that allows web transactions, and being able to pinpoint an exact physical address for product delivery. But barriers to entry also mean opportunities for first-movers like Shop.bt. He added:

There’s not much competition, so if you get a good product out, it’ll get known and found out more easily.

In the meantime, Bhutan Post is making progress on the delivery logistics problem and will soon transition to a standardized address system. With this piece of the puzzle put in place, Lhendup added, “even if online transactions remain unfeasible, we can begin allowing customers to order online via a cash-on-delivery payment method.” That’s something we see a lot across Southeast Asia.

Lhendup’s plans also include developing a section of the site specifically made for international buyers interested in ‘made in Bhutan’ products. With this, it seems that Shop.bt may in fact have its sights set on becoming an alternative platform to China’s Alibaba.com for Bhutanese products in the global marketplace.

Leaning in to China

On the topic of China, I also brought up (with Dorji) the potential Bhutanese inclination toward Chinese social media mentioned in our Bhutan introductory piece. After all, social messaging app WeChat remains, at press time, the number one free app in the Bhutan iTunes App Store, while Chinese mobile games also have a commanding presence if you take a look at ‘top grossing’ and ‘top paid’ results (but note that Android figures are not yet available for Bhutan).

“The iOS data is very peculiar, as we have no Chinese settled in Bhutan – actually, we might be the only country in the world with no resident Chinese population,” Dorji said. In stating that Bhutan is the only country without a resident Chinese population, he is referring to China’s Han majority, as there are a small number of ethnic Tibetan refugees from China who are living in Bhutan.

When I asked if he thought Chinese tourists were instead driving these downloads, Dorji said that Chinese tourists have started increasing, but they are still “far behind Americans, Europeans, and Japanese”.

Dorji also mentioned that it could be an error, “due to the geo-satellite data recording users in Bhutan as being in China or vice versa (for Chinese areas near Bhutan).” Nevertheless, he alluded to the possibility of native adoption, saying that “kids may like to play these games on their parents’ smartphones.”

Lessons from China’s and India’s dealings with the web?

Bhutan’s relations with China and India are indeed a sensitive subject in the region, best evidenced by a recent commentary in China’s state-run Global Times newspaper, which accused India of treating Bhutan as a “protectorate” and interfering in its latest elections this July (to supposedly guard against the ex-prime minister’s increased engagement with China).

For a perspective on Bhutan’s technology scene independent of internal and regional politics, I talked to Foad Hamidi, a computer science PhD at Canada’s York University who served as an ‘overseas expert’ to Bhutanese startups this past spring. Hamidi spent six weeks within the incubator at Thimphu TechPark, conducting workshops on topics such as ‘digital design and prototyping’, and ‘effective communication’.

The country’s leaders, he observed, are keeping a careful eye on the outside world as Bhutan opens up, to avoid what they perceive as the dark side of technology. He explains:

There is a concern, which I think is legitimate, about the potential harming effects of technology on the fabric of society and people are closely watching what is happening in neighbouring counties – such as India and China – for insights on how to protect themselves against adverse effects.

Hamidi nevertheless found Bhutan to be particularly adept at balancing tradition and technology.

Although Bhutan is a very traditional society in many ways, I found that the people there are open-minded towards technological innovations and can foresee the possibilities that it entails in terms of quality of life improvement and increased employment.

(Editing by Steven Millward, Paul Bischoff)


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