Myanmar | Canadian geek in Myanmar

February 10, 2017

2017 Technology predictions for Myanmar

AFTER YEARS of listening to stories about Myanmar’s looming “digital leapfrog”, which had little to do with content and everything to do with infrastructure, the conversation on technology is finally starting to turn.

The numbers speak for themselves. With mobile penetration now sitting at around 75 percent, of which an astonishing 78 percent have smartphones, it’s safe to say that Myanmar is now well and truly “connected”.

Excitement about the potential of Myanmar’s tech revolution isn’t new. But now the conversation is less about how Ooredoo, Telenor and MPT – and now the soon to launch Mytel – are going to sign up customers than how these new netizens will use their phones. In other words, we are finally starting to focus on the content side of the equation.

Investments

After the initial rush to invest in Myanmar back in 2014-15, it felt like things slowed down in 2016. This year opened up with a bang with the announcement of Code2Lab securing a US$500,000 investment – a relatively large sum for the Myanmar tech startup scene.

This could just be a taste of what’s to come, though. After years of tyre kicking, I think institutional investors from the more developed markets in North America and Europe will finally start putting some money on the table. While there have been a few examples of seed rounds over the past few years – such as RevoTech, Nex and Star Tickets – by and large the big tech venture capital firms have not been ready to place their bets yet.

But while investment was sluggish overall in 2016, there were two outliers: Oway Ride picked up $3 million from the International Finance Corporation and innovation hub Phandeeyar closed a $2 million round led by Omidyar. These were later-stage deals and I think this trend will continue – that is, we’ll see more later-stage and larger ticket size fundraising rounds close in 2017. Don’t expect to see any significant exits though.

e-commerce

As much as most of us would love to have the convenience of online shopping and delivery becoming mainstream, the reality is that this still won’t be the year for e-commerce in Myanmar. There are two business models in this sector: asset-heavy and on-demand. The former is very risky without proper market data, and very difficult without clear import laws and reliable supply chains.

The latter model requires consumers (and brands) who are willing to pay a premium for convenience. While there are certainly some in Myanmar who fit this category, success will for the most part depend on volume. That’s still missing here.

Finally, the infrastructure required for the mass adoption of e-commerce such as last mile delivery – delivery direct to the home – and digital payments is still largely missing. The bottom line is that e-commerce is a capital-intensive play and even behemoths such as Rocket Internet have struggled to gain traction here because the market is simply not ready.

FinTech

While e-commerce waits for its moment, we are set to see some fascinating ground wars on the financial technology front. This will be a combination of the local banks modernising, heavy-hitter mobile payment companies trying to buy market share, microfinance institutions continuing to expand into niche areas and local upstarts fighting for a piece of this potentially enormous pie.

There is much to be done before we see real mass adoption of digital money – or any kind of financial inclusion for much of this country – but rest assured that tens of millions of dollars are being spent to make it a reality. While education of the market seems like the biggest barrier at the moment, Myanmar also lacks a network of merchants that accept digital money.

That’s an obvious problem – it’s hard to convince people to use digital money when it’s not accepted anywhere. This will need to be a key focus area, particularly for the banks and mobile money companies that are vying for market share.

The banks have a unique opportunity to “leapfrog” as well. It will be interesting to see if any take unique approaches to growth, such as through the use of agent or kiosk banking instead of brick and mortar branches.

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March 1, 2016

Technology for women

As with many Asian societies, women – especially mothers – are a core to the family and community. If we affect women, we affect everyone. On average (globally), 90% of the money women earn, they reinvest in the home and the family. Study after study shows that connecting women to the Internet has profound benefits to their lives, that of their families and even provides a significant boost to the national income. By deliberately focusing on breaking down barriers that stop women from connecting we accelerate the engines of growth for the country’s economy. And yet it’s estimated that women in developing worlds are between 25-40% less connected then men. Women in Myanmar are 29% less likely to own a device then men according to a recent GSMA report. I believe that this comes down into two things: 1. There’s not enough women in the tech sector and 2. Mostly because of the first problem, there’s not enough people building tech with the needs and perspectives of women in mind. The issue of not enough women in tech is vast and probably deserves its own piece in the future but there are immediate things that can be done regarding the second.

Beyond the issue of gender equality, women make up half of the population and consumer market so it just makes economic sense to include them. A great example of this comes from the gaming world (of course I’m going to use a gaming example). For decades, gaming – especially console gaming – was predominately male-focused. Then in 2009, Nintendo introduced the Wii and turned the gaming world on its head. Not only did they sell over 10 million units that year alone, eight of the top twenty selling games in 2010 were on the Wii, predominately driven by fitness and dancing games. Nintendo tapped into a couple of key drivers. First, women themselves were a huge untapped gaming market. By making gaming accessible and removing barriers to entry, they were able to effectively double their addressable market. Their mantra of “5 to 95” meant that all their design choices were made from the ground up to be inclusive for non gamers. Second, women make almost all the decisions when it comes to household purchases. Nintendo’s focus on family-friendly games appealed to women and women just do not buy shooting and fighting games for their families.

As with most technology stories, content is king…or in this case, queen. Building products that appeal to females and their specific interests means that there’s relevancy, which is a key driver to any tech adoption. As mentioned earlier, women are the core of the familial units. This means that they are often the primary health care providers, not just for the children but also the elder and ailing. Women are also the ones who are focused on the household diet and nutrition and the ones who make most of the financial decisions for the household. Products which tap into the domestic needs of a household or help the women in their day to day lives will surely appeal. Appearing fun or frivolous isn’t going to work with this group.

Another driver for adoption is in the design process. Creating products for women means that you need to consider what would appeal to them – and I don’t mean pretty pink hearts. Rather, consider this from Nintendo’s perspective and create the product from the ground up with women in mind. For instance, women, especially women in developing markets have less leisure time then men, meaning they are less inclined to spend large amounts of time trying to understand a new tech product. Design decisions such as breaking up the content into bite sized pieces and ease of entry are critical to female adoption. Take a look at the Duolingo app as an incredible example of how to break down e-learning into consumable chunks. Easy to pick up and understand, spend a few minutes with and come back to when time allows.

When trying attract women to your product, consider the other traits that are more typical of females. Generally speaking, we tend to be the planners and researchers – whether it’s more superficial things like restaurants and vacations to more serious needs such as healthcare. In general, we are more risk adverse and subsequently more inclined to plan for future. Women are more social and do not spend a lot of their spare time on themselves but will take the time if it is for the benefit of their family.

Having said all of this, the single most effective way to get more women connected is to get more girls into STEM majors and encourage these young women to stay in the tech sector once they are done school. Groups such as Geek Girls are trying to do their part but it’s a big issue that requires more awareness and support across the board. Myanmar presents such a unique opportunity – here is a country that is coming online almost overnight and if we can ensure the voice of the women are heard just as loudly, there’s a good chance that Myanmar connectivity is balanced fairly evenly between genders as it comes online.

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September 11, 2015

Connecting Myanmar

I have been helping to organize a TEDx event here in Yangon which has given me a deeper appreciation for this amazing country. With the theme of “Myanmar Connects”, TEDxInyaLake aims to promote the world of ideas to Myammar via TED and TEDx talks, and in turn contribute Myanmar’s ideas to the world. While this goes well beyond technology, there is certainly an element of that. Which got me thinking about the changes I’ve witnessed in the past 3 years.

Back then I was running around SE Asia pitching a localized social network in Myanmar, a place where the mobile penetration was around 12% and limited to the wealthy elite as sim cards were still hundreds of dollars. Internet penetration was even more grim with most estimates sitting at below 1%. Most people thought I was nuts. Now, only a year after the foreign telcos have launched their services, mobile penetration has grown to an astonishing 45%. But what does that really mean for the tech scene here? Yes, mobile penetration has seen exponential growth, and in the cities, internet penetration and smart phone adoption is following, albiet at a slower rate. But you are still dealing with a largely disconnected society. Seventy percent of Myanmar citizens still live in rural locations and remember the amazing, exponential growth of mobile penetration? Not surprisingly, that’s mostly in the urban areas with only 21% of rural households owning a mobile device and while I don’t know what percentage of those devices are smart phones, I’m willing to bet it’s in the single digits. And unfortunately, the easy growth part is over…those who have been waiting for years to get a sim card now have one. That doesn’t mean that the rapid growth will stop, only that the initial explosion is over and we will get to the harder to reach people and areas.

Then there’s the problem of content. I’ve always said that just giving people a sim card doesn’t actually connect them to anything. The past few years have seen an explosion of localized apps and online services but with almost no exception, they are targeted to the smart phone users, which is growing but still only a total addressable market of less than ten million people. And let’s not forget their limited purchasing power. The local tech startups are also competing with the industry giants, which have now all localized their service offerings for this market. In some case, those giants are spending enormous amounts of money to buy marketshare. The chat wars are easy to spot: Beeline, WeChat and LINE, all “unicorns” battling it out with each other while a few local players attempt to play with the big boys. Even Viber is losing all ground now that they aren’t the only chat app that a) offers voice calling and b) allows for account authentication. It’s easy to be number one when everyone else is effectively blocked – something we saw happen in Vietnam a few years ago. Once the government stopped blocking Facebook, home-grown Zing took a major nose dive in market share.

So why am I here? Well the story of how I landed here and why I stayed has been written and I didn’t write this to turn people off from coming here. Besides, it’s not all doom and gloom – let’s not forget that a couple of years ago the government said they wanted to get the mobile penetration to around 80% in three years. Most people laughed and yet, only a year after the foreign telcos have launched their services, mobile penetration sits at over 45%. In fact, there have been two other countries in the world who have been able to grow from below 15% to over 80% in three years: Vietnam and Russia. Given the speed of adoption in Myanmar, there’s no reason to think that it can’t also achieve this target. This is the first time in the history of the world that a telecommunications infrastructure has been built data first and Myanmar will come online faster than any of it’s neighbours. Being able to witness that firsthand is reason enough to be here.