Rocket Internet reveals its plans to conquer Myanmar, Bangladesh, and beyond

Hanno Stegmann at Tech in Asia Jakarta 2015

Rocket Internet, the German startup-builder, has big plans for Asia. Its Asia Pacific wing – a joint venture with Qatari telecom company Ooreedo – plans to launch at least one new company per quarter in the region. But Rocket’s standard playbook of spotting a gap and filling it (maybe by cloning a successful company from another market) is about to be tested as it expands into some of the continent’s least-wired markets.

Hanno Stegmann, co-CEO of Rocket Internet’s Asia Pacific Internet Group, took the stage at Tech in Asia Jakarta 2015 to talk about the company’s culture, strategy, and goals for the future.

Burma ain’t easy but it’s necessary

Next up on Rocket’s agenda are countries not typically considered to be hotbeds for online startups: Bangladesh and Myanmar, and the company plans to expand its operations in Pakistan.

“It makes a lot of sense to start in these markets with straight-forward, simple business models,” says Hanno. “Especially at the moment, where mobile penetration is picking up in these pioneer markets, it’s important to be first.”

But being the first one in the door for ecommerce in Myanmar is very different from Rocket’s Internet’s past record of startups such as grocery delivery in Singapore.

“In these markets, ecommerce doesn’t exist – and for much of the population, the internet doesn’t exist,” he says. “In Pakistan, nobody does ecommerce delivery. So we had to roll up our sleeves and make our own ecommerce delivery fleet.”

As of 2013, Myanmar had an internet penetration of just 1.2 percent – one of the lowest in the world. In Bangladesh, a lack of working traffic lights makes for greuling, inefficient deliveries. These are challenges that can’t simply be fixed by porting a clone of Amazon into the country: they require a level of localization so specific that you run the risk of reinventing the wheel.

“There are a lot of challenges,” says Hanno. “But the pure amount of people living there – it’s a huge market potential.”

Starting with the basics

So much of Asia – and the world – is on-the-grid that it’s easy to forget what life was like before Taobao, Amazon, and Co. brought the world’s goods to our doorsteps. For its first expansions into these countries, Rocket is starting with the classics: basic ecommerce and classifieds sites.

“In many of these countries, you can only buy certain goods if you live in the middle of the city – in the middle of the capital,” says Hanno. “Ecommerce isn’t only about convenience. It’s about making goods available that aren’t available yet.”

“So we look at the competition,” he continues. “What made us think that ecommerce was a very good idea to start in some of these countries was the pure fact that everybody was shopping, everybody was interested in purchasing goods, but there was no established big player.”

In markets like Myanmar, not only was there no big player – there were essentially no players at all. “We are so early that we could register the domain ‘Shop.com.mm,’” says Hanno with a laugh. Rocket also registered Jobs.com.mm and Work.com.mm in Myanmar.

“It’s easier to be the number one when you’re the first mover,” he says. “You can figure out what the customer needs first, you can figure out logistics first, and you build the biggest brand first.”

Location, location, location

A (relatively) easier race to the top