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ALIBABABA gains a foot in the Myanmar eCommerce business, grows rapidly
The Alibaba Group has gained a foothold in Myanmar following the takeover of Daraz Group, the Pakistan i nline shopi ng platfom, which runs the Myanmar e-commerce site shop.com.mm. This step could be the beginning of a whole series of investment projects by the China based web giants and other competing companies.
There was also only a single weekend before the Ministry of Commerce (MOC) opened retailing and wholesaling for international corporations and joints, on May 14, allowing them to deal in all goods produced in Myanmar or exported oversee. On May 8, 2006, Alibaba purchased Daraz, which is in the possession of the Germany start-up Incubators Rocket Internets, for an unnamed number.
Prior to the transaction, Daraz was held by the CDC Group, the UK Government's Development Finance Institution (DFI) and the Asia Pacific Internet Group (APACIG), a JV between Rocket Internet and the Qatari telecommunications group Ooredoo. This is the second Rocket-based Alibaba purchase, the first two years ago being Singapore based e-commerce firm Lazada.
This takeover could represent a turning point for e-commerce in Myanmar, especially with overseas retail outlets now allowed to establish themselves in the state. "The move will transform the whole e-commerce eco-system and people's view of e-commerce in Myanmar," said Sumit Jasoria, former Rocket Internets WHO Regional Manager for Myanmar, Sri Lanka and Nepal.
Now Alibaba can open or investment in a portfolio of regional logistic and distributor firms. You can look at the construction of your own storage facilities or open your own e-commerce and digitally start-ups," Mr. Jasoria added. Alibaba would not be without its competitors. Daizen Myanmar, a Thilawa Special Economic Zone (SEZ) logistic innovator, began offering customs warehousing solutions to national and multinational corporations this year.
Yamato sees ASEAN trading and logistical integrations as a pivotal element in its move into Myanmar. A further pulling point is the authorisation to set up a loan agency in Myanmar. "The use of a real bailiff's office will only grow. In the last 3.5 years since the launch of shop.com. mm in Myanmar, the use of maps has already grown enormously," said Mr. Jasoria.
"Myanmar's new legislation on retailing and the Myanmar Credit Bureau's authorisation will allow even more international businesses access to the Myanmar market," he added. It is now likely that other e-commerce and logistic actors will also come into play. "Alibaba and other major ISPs from Japan, South Korea and China have been looking at Myanmar's e-commerce markets for a long time," said Jasoria.
Mr Erwin Sikma, Co-Chairman of the European Chamber of Commerce in Myanmar's Digitally and Innovatively Advancedocacy Group, approved. "Alibaba's interest in Myanmar shows that they don't want to miss out and want to see how such a new emerging Indian domestic demand can develop," said Mr. Sikma. However, some believe that Alibaba intends to grow primarily in Daraz's other overseas territories.
It includes Pakistan, Bangladesh, Sri Lanka, Nepal and Myanmar - a combined figure of over 460 million people. Burma accounts for only about 10% of the country's GDP and is much less advanced than the Pakistan and Bangladesh states. "We believe Alibaba is focusing on concluding its South Asian growth and where growth is important to it, like in Pakistan and Bangladesh," said BarloLoLo. com, a local on-line trading place focused on providing small B2C and co-branded products.
Mr. Pietro Borsano, a professor at Mandalay International University and Shinawatra International University, expects Alibaba to be investing behind Lazada to open up the ASEAN-market. Meanwhile, Bangkok is working in close cooperation with the China company to expand its economic corridor to the east, which spans three of Thailand's east Asian states - Chonburi, Rayong and Chachoengsao - into a platform for intelligent production, technology and innovations as well as e-commerce.
"Therefore, I believe that the Alibaba Group policy for the whole of Southeast Asia will necessarily be located within ASEAN and will be led by operation in Malaysia and Thailand. We believe that all ASEAN stores are at an early phase of introducing e-commerce platform, so you can see how new the Myanmar store is to them.
"I suspect Alibaba will prioritize Lazada for the most important ASEAN markets," said Borsano.