In late December, Nay Min Thu had a problem that would be annoying for any small business owner, but particularly problematic for one in the tech industry. The power at the Yangon apartment-turned-headquarters of his iMyanmar group of companies had failed, again.
His 35 employees faced dark computer monitors and were forced to spend the day working offline—not an ideal situation when your entire business is based on the internet.
Sporadic blackouts are just one type of hurdle Myanmar's tech entrepreneurs face. But despite the difficulties, foreign investors are taking early bets on the country's nascent e-commerce sector.
Myanmar's transition from military rule to a nominally-civilian government in 2011 brought with it a rapid opening of the economy, liberalizing sectors previously monopolized by the state. Mobile phone shops now litter the streets of Myanmar's commercial capital, Yangon, and foreign mobile operators—which began service this year—have brought affordable SIM cards to the market for the first time.
Internet connectivity in Myanmar is still extremely low, but is growing. The United Nations' International Telecommunication Union estimated internet penetration at 1.2 percent in 2013, up from 1.07 percent in 2012.
Industry analysts put the figure higher, at around 5 percent, and estimate mobile phone use at 9 percent, citing the presence of foreign telecommunication operators Telenor and Ooredoo, whose SIM cards sell for just 1, 500 kyat (US$1.50), down from hundreds of dollars in previous years. Internet access through mobile phones is now beginning to challenge internet cafes as the preferred method of using the web.
Take Myanmarcarsdb.com, a car classifieds site founded in 2012 by three Myanmar nationals who were living abroad at the time. The three worked on the site outside of their day jobs, but their distance from Yangon proved a challenge, making it hard to get traction.
"It's quite tough," said Wai Yan Lin, CEO and founder of rebbiz, the parent company that runs myanmarcarsdb.com along with a number of other classifieds sites. "At that time we were back in Singapore, so we called people that we knew. We called our friends and or families and asked them, 'Hey, do you have any cars that you want to list?'"
But what started with a mere five listings quickly grew, and—when the founders made the move to Yangon—rebbiz closed its first round of seed funding in late 2012.
Earlier this month, Myanmarcarsdb.com received additional funding from Kuala Lumpur-based digital investment firm Frontiers Digital Ventures, which specializes in seeking out promising classifieds websites in frontier and emerging markets.
Wai Yan Lin says that, to date, the website has listed more than 40,000 cars, from commercial trucks to everyday drivers and even a handful of exotic models that would be near-impossible to find in car showrooms across the city.
A white convertible 2010 Ferrari California went up for sale recently, at around US $152,000. The price tag is far beyond the reach of most in Myanmar, where per capita GDP is around US $1,105, one of the lowest in East Asia and the Pacific.
Still, the site now boasts 60,000 unique visitors per month.
The website's success can largely be credited to a shift in Myanmar's economic policy under its reformist government, led by President Thein Sein. Apart from freeing up the telecommunications space, the government has also loosened harsh restrictions on the imports of cars.
For decades, cars were a privilege enjoyed almost exclusively by the well-heeled elite and government officials. Import licenses, given out by the ruling military junta, were so valuable that businessmen close to these generals preferred to be paid for work on government projects in car import licenses, rather than cash.
Now, new models prowl the streets of Yangon, affordable to middle-class residents. The number of cars there increased by 30 per cent to 434,000 in 2013, according to UK-based research firm Euromonitor International. Around 20 per cent of Yangon's middle-class now owns cars, while in Mandalay the number is about half that. Since 2011, more than 200 car dealerships have opened in Yangon alone.
Entrepreneurs like Wai Yan Lin are beginning to realize that they can reach a greater consumer base through the web. He laughs off the suggestion that he could be adding to the now daily traffic jams that snarl the city's streets and have become a constant source of complaints among residents. He says the site is just giving people what they want.
Similarly, Yangon's real estate market has skyrocketed in recent years, as foreign companies, aid organizations, and governments ramp up operations there. In downtown Yangon, rental prices for office space average $87 per square meter in the final quarter of 2014, according to real-estate research firm Colliers International—the highest in all of Southeast Asia.
The price of apartment and home rentals have surged as well. The seeming ease with which one can flip an aging apartment for a hefty profit has created legions of ad hoc real estate agents, brokers, and middlemen looking to cash in.
Catering to this is iMyanmarHouse, a property classifieds website under the portfolio of digital marketing company iMyanmar. The website, like myanmarcarsdb.com, has also received funding from Frontier Digital Ventures.
Frontier Digital Ventures has not disclosed the amount of funding for either site, but Nay Min Thu said that it was the most ever given to a Myanmar start-up.
Nay Min Thu says he based the site off ShweRooms.com, a site he created to rent rooms and apartments to members of Singapore's sizeable Myanmar expatriate community while he was living there.
Nay Min Thu's iMyanmarHouse has emerged as an industry leader with 36,000 properties listed primarily in Yangon and Mandalay, Myanmar's second largest city.
Despite their success, entrepreneurs working in the digital space realize they have a long way to go. The internet connection, even in key cities like Yangon and Mandalay, remains slow and patchy, making it difficult to scour for the perfect car or apartment online.
Nay Min Thu also purposely keeps the website stripped down, with photos small and in a lower quality format, in an attempt to insure that it will load on Myanmar's frustratingly slow connection.
Sellers are just beginning to recognize the potential of reaching a larger audience through the web. To help bridge this gap, some of Nay Min Thu's employees continue to market their website offline and in person—crisscrossing the city, travelling from one real estate agency to the next, explaining the benefits of listing properties on the internet.
"People are not used to doing stuff online. We have to educate the consumer," Nay Min Thu said.
Myanmar is, of course, still a long way off from being a sensible market for the Amazons and Alibabas of the world. Classifieds sites work well because they rely on cash payments, rather than needing any online money transfer.
Other online shops do exist, but use a unique workaround to allow customers without credit cards to purchase goods from abroad online. Customers use a credit card that belongs to the shop owner or a relative in another country, and pay an additional mark-up on the asking price in cash. The purchased goods are then shipped to Myanmar, often via a third country, then delivered to the customer.
These types of operations and classifieds serve as a sort of stepping stone between Myanmar's brick and mortar shops and a full fledge e-commerce sector, in large part because Myanmar is still a cash economy.
Duffle bags of kyat, the local currency, are a common sight
Myanmar's banking sector remains severely underdeveloped, with just 5 percent of the population using any form of financial services, according to the International Finance Corporation. Cash payments are the norm even for big-ticket purchases like cars, and almost all real estate agents require rent to be paid in cash, upfront, for the entire year. Duffle bags of kyat, the local currency, are a common sight at real estate agencies and car dealerships. (In order to make money, sites like Myanmarcarsdb.com rely on advertising and premium listings, rather than taking a cut of the sale.)
"This is the very first stage [of e-commerce]," said Chirstopher Chit Tun, the director of consulting at professional services firm Deloitte. "It will take a while."
Despite the obstacles, competition is increasing. Rocket Internet, a notorious startup incubator and venture capital firm best known for cloning successful companies and exporting them to other countries, now runs six online platforms in the country—four of them classifieds sites. A handful of other locally run sites have also popped up.
Rocket Internet's automotive classifieds, Motors.com.mm, has seen the number of professional vehicle sellers in Yangon advertising on the site grow from 10 percent at the start of 2014, to 90 percent, according to country manager Rianne Roggema. In April 2014 Rocket Internet secured $10 million in funding to expand its car classifieds operations in Asia, including Myanmar.
Investors eyeing the market say this is just the start of a mobile-internet led boom, and that Myanmar—which continues to play catch-up with virtually every country in the region – has room to grow significantly.
For entrepreneurs this means eying future growth even as their companies contend with present conditions in Myanmar that make working in tech at times trying endeavor.
A small framed poster hanging in Wai Yan Lin's office reflects a task that is often much more easier said than done when navigating the sector's numerous hurdles.
"Get shit done."