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Soe Lin Myat is the founder of Momolay, a media content platform along with his most recent venture Kyarlay, an online e-commerce platform that sells and delivers baby products. After spending 10 years studying in Singapore, Lin Myat moved back to Myanmar to become a startup founder in a country that was beginning to enter a new era of development. He recently spoke with KrASIA to share his insights about running a startup in Myanmar.
The following interview has been edited for brevity and clarity.
KrASIA (KR): What have been some of the biggest changes you have experienced in Myanmar since becoming a startup founder?
Soe Lin Myat (SLM): One of the major changes has been the internet connection. The internet speed was not that fast and the data plans were very expensive. Every year the data price has been going down and the connection has been becoming faster and faster. I think around 2015 when we went to watch YouTube it would all depend on where you are located and your mobile plans. But now everybody is watching videos on YouTube and Facebook, or playing online games. The benefits to our industry are very visible, e-commerce platforms become are faster and cheaper.
KR: As an emerging economy, Myanmar has a relatively immature startup scene. What are some of the challenges you’ve encountered in the country’s developing ecosystem compared to your previous work in Singapore?
SLM: The major difference is that a lot of things you have to do yourself. In Singapore, if you are an e-commerce platform, you can work with a lot of third-party logistics and existing supply chains, and then you just focus on what you are doing. You try to see the gap in the ecosystem, try to slot into it, and then you try to work with other people.
*The traditional wisdom about how to grow for an e-commerce platform is you have to remove the limitation factors that will limit your success. One limitation factor could be logistics. You shouldn’t be running your own logistics because this is going to take time so you work with an existing partner as you would in Singapore. On the other side, you don’t want to hold inventory, because this will limit your sales. In developed countries like Singapore, there are a lot of sellers so there’s a very strong supply chain. You try to get them on to your platforms. If you hold the stock, maybe you can onboard a hundred suppliers. But if you don’t, you can maybe onboard thousands or ten thousand suppliers during the same period of time. That’s the traditional wisdom about startups and is the playbook best used by regional startups in a mature market.
We cannot use the same business model in Myanmar because the conditions are different. There is no strong existing supply chain and not a lot of our sellers. We need to hold inventory of the top-selling items because if we get a lot of orders, we won’t be able to fulfill them.
For logistics, if we work with a partner, delivery can take two to seven days. If we roll out our own logistic solutions, then we can deliver on the same day, or maybe the next day and we can attract more customers to use our platform because the value we provide is high.
I had this startup mindset of how to grow the business quickly from my time in Singapore, but I eventually realized that a lot of those things don’t work here because the ecosystem is not mature enough.
KR: What is the fundraising landscape like for startups in Myanmar?
SLM: When we tried to raise funding, we tried to talk with a few venture capital firms (VCs) which have a local office. After that, we have to go to Singapore because it has a lot of VCs. One of the problems when talking with VCs is that they usually like the business, the numbers, the growth, and the stats, but they are not familiar with the country.
Doing comprehensive research on a new market costs time and resources, so unless there are a few companies in the pipeline, it is not worth it for VCs to learn about Myanmar.
Although this is a major challenge I think things are getting better. In 2015, there weren’t a lot of VCs focused on Myanmar, but there are more now. Things are moving in the right direction, just maybe not as fast as we want.
KR: Developing startup ecosystems often have to face cultural changes. How has your firm handled this balance?
SLM: In Singapore, customers have many choices. For example, there is Facebook, Instagram, YouTube, and a few other platforms. They can choose any of these services. In Myanmar it was different. When we look at the period around 2015 and 2016, Facebook introduced a zero data plan to use the platform for free, quickly dominating the market. Currently, Facebook essentially is the internet in Myanmar.
A lot of people in Myanmar are first-time smartphone and internet users. They are not comfortable with trying out new platforms and new services, they are happy with Facebook. People run shops that post their products and try to sell on Facebook. If we want to promote our own platforms, which we do in addition to Facebook so we are not competing. But we try to provide a better service on our platform and move away from Facebook. I think it’s very, very challenging but any startups that want to run their own platform need to do it.
I believe the way to do it is to provide a better value than Facebook in a particular sector. For example, for baby products on our platforms, you can see better product descriptions, more photos, more videos. We try to find things where we can make the customer’s life slightly easier than on Facebook and then try to slowly educate them that there is more than Facebook on the internet.
What we also did was open up physical shops. If we look at the market 99% of the retail is offline. People come into our shop, and we train our salespeople to educate the customer to use our online platform. When the customer comes in we will have them install our app. We teach them how to order because things like the baby formula you need to buy every month. Once they see the shop they build trust instantly, we don’t need to force them to trust us.