4 things you must know when building a tech startup in Myanmar

Rocket Internet is famous for being very data-driven when delving into emerging markets around the world. While some moves look quite logical, you might be curious as to why Rocket Internet has set its eyes onto Myanmar. Investors believe it is a risky place to conduct business because unlike other developing countries, Myanmar still hasn’t demonstrated its growth potential.

But still, Rocket Internet has opened four classifieds businesses there: for real estate (House.com.mm), for cars (Motors.com.mm), for jobs (Work.com.mm), and a general listings site (Ads.com.mm). Is there something Rocket knows that we don’t? Erwin Sikma, Rocket’s managing director for classifieds in Asia, tells you four things that they see in that country.

1. Myanmar is poised for strong growth

Sikma says that Rocket Internet enters emerging markets with huge potential for growth and a strong need for secure, easy-to-use, and high quality platforms. While Myanmar is one of the least developed countries in the region, it is showing tremendous development already.

Sikma argues that Myanmar’s internet penetration is rising rapidly and will boom when the new telecom infrastructure starts being laid out in 2014. Although growth is in order, there were only 60,000 internet users in Myanmar last year (about 0.16 percent of population), and that makes Myanmar a very challenging environment for any tech company to grow

Currently, Myanmar only has a mobile phone penetration of 7.08 percent. But the country expects to get that number up to 50 percent by 2015. 3G is going to roll out in Myanmar next year too.

There will be a large influx of international companies, investors, and foreigners coming into the country. All of these parties will contribute to Myanmar’s strong economic growth in the coming years. That will all lead to an increase in affluence among the population. Sikma adds:

We see an enormous potential in Myanmar as the country is opening up, investors and international companies are coming in and policies/laws/regulations are being improved. We are contributing to the development of this market while facilitating the inevitable channel shift from offline to online. In addition we create transparency in markets that often are very fragmented and where fraud is a big issue.

2. E-commerce business is tough in Myanmar

Credit: Sustainable Business Myanmar

For a very young market like Myanmar, it might not be the wisest move to open an e-commerce company there. Myanmar’s financial, payment, and logistics infrastructure are still in the very early development stage.

3. Tough for startups to attract talent

4. You need to do lots of ground work to educate people in Myanmar