Amid a series of state reforms seven years ago, the future of Myanmar’s economy had a gilded shine—some even posited it as “Asia’s next tiger.”
Though the glint has somewhat dulled, the economy is performing well, with GDP growth of 6.4 percent in 2017 and 6.8 percent growth expected in 2018. But business leaders feel this progress is not reflected on the ground, where industries are besieged by a string of problems.
Tourist numbers are dropping because of the crisis in Rakhine State, investors are worried about the reputational risk of operating in Myanmar, and impatience is festering over the sluggish pace of reforms. In addition, the depreciation of the kyat to US dollar and government inadequacies of delivering basic services to the public are fuel for what the International Crisis Group’s latest report described as “strong perceptions of economic malaise in the country.”
Buoyant measures are taking place, such as a new companies law that allows foreigners to invest up to 35 percent in local companies, a development expected to attract more foreign investment. The imminent Myanmar Sustainable Development Plan has a 12-point economic plan too, touted as a panacea for the economic woes.
But arguably the most efficacious force for business is the quick-thinking entrepreneur who turns an external problem into an opportunity. In Myanmar, where a 2014 census recorded more than half the population as under 30, these entrepreneurs are young and bold. We interviewed award-winning sisters from the tech industry, a prominent restaurateur, and an innovative tour operator on how they are thriving in a tough environment.
Connecting the Dots
Honey Mya Win, 26, was a telecom engineer for Huawei when her sister told her about a business solution hackathon. Shwe Yee Mya Win, 24, has always been the techier of the two, while Honey has the vision. After 48 hours of working and sleeping at their desk, the sisters won the competition and were elevated into Yangon’s tech hub Phandeeyar, where from September 2016-March 2017 they developed freelancing platform Chate Sat, or “connect” in Burmese.
“We try to find a problem worth solving and then we build websites and apps for that,” says Honey in their downtown headquarters, a small complex of beige rooms and whiteboards displaying freshly scribbled strategies. “We don’t have any business background and in those six months we learned a lot from our mentors about management, finance, everything about business.”
The pair had already established website and app builder Technoholic but a struggle to find freelancers along with the unfair percentages freelancers get from projects sparked the idea for Chate Sat, which connects developers, translators, and freelancers from other industries straight to the employer.
Within a year of leaving Phandeeyar the sisters were listed in Forbes 30 Under 30 Asia and had secured six-figure funding from Singapore-based Vulpes Investment Management Ltd, Theta Capital, and a Myanmar-based angel investor. With fellow Phandeeyar start-ups as its first clients, the 10-strong team of Chate Sat has grown to have 14,000 freelancers and 2,400 clients, about 80 percent of whom are local and the rest from Thailand, Singapore, Malaysia and the US. Clients still include start-ups, but also range to corporations such as Ooredoo, Ogilvy, and Grab.
Although the local start-up scene is thriving, this year has seen a drop in investment, explained Honey, adding that most businesses are feeling the squeeze.
“We are too,” she says. “We offer these freelancers so that businesses can grow, but right now people aren’t thinking about growth.”
Businesses are currently focused on survival, she said, which is also an opportunity: firms with dwindling budgets for digital marketing will save money using freelancers rather than big agencies. “It’s one way of solving these problems,” adds Honey.
Chate Sat helps its clients according to their budget, while on the platform some improvements have been implemented: online tests show clients the level of a freelancer’s skills and the start-up is tapping into the pool of universities to connect fledgling talent with clients. Its process of collecting freelancer payments from clients and delivering them once the job is done is also reassuring to all parties.
One of the platform’s main goals is to encourage Myanmar Internet users that there’s a digital world outside of Facebook—and Chate Sat is in it. By the end of this year it will hopefully expand its freelancer base to Naypyitaw, Taunggyi, and Mandalay and land more freelancer projects from neighboring countries. “We have lots of plans to grow,” says Honey. “With this economy, our plans are a little delayed, but we will get there.”
Reaching New Markets
When the humanitarian crisis in Rakhine State greatly escalated in August, 2017, tourism entrepreneur Min Thant Htut, 28, knew it would damage his industry.
“People started saying ‘don’t travel to Myanmar, it’s not ethical,’” he says. His Yangon-based tour operator Pro Niti has since endured a 20-percent drop in customers, mostly from his main markets of the US and UK.
His response was to shift his market, he explains. “Most amazingly, now we are getting customers from Ukraine and Lithuania.” To tap into the Eastern European market, Min studied research from the Dutch government’s Centre for the Promotion of Imports (CPI) and then used digital advertising and search engine optimization (SEO) to ensure his company would appear in the web search results of prospective visitors from that region.
This year he will introduce travel articles on his website and expand his firm’s itinerary to include Myanmar’s coastal south as well as trekking destinations such as Pindaya, Kengtung, and Chin State. Though he is back to working 12-hour days, seven days per week, “like when I started the company,” his diligence should keep his 10-strong team busy.
“When you say you’re an ‘entrepreneur’ it means you are the guy who has to fix the problem,” he says. “You have to struggle and hustle everyday.”
Born in Bago Region, Min’s first taste of the tourism and hospitality industry was as a bellboy for a mid-range Yangon hotel. He enrolled on a tourism management diploma and then trained as a tour guide while answering foreigners’ Myanmar questions on travel forums and writing an English-language blog.
“Our country was opening up and people were ready to come in,” he says, and after making a name for himself as a guide, he launched Pro Niti in 2013. “Pro” is short for professionalism and “Niti” is Pali for ethical, he explained: Pro Niti focuses on “price, peace of mind travel, and experience.” Min also co-founded tourism and management institute Trust through which he teaches his hard-earned knowledge.
Aside from the Rakhine crisis, other problems unsurprising for a country that had been isolated for decades have stymied his business, including poor infrastructure, expensive domestic flights, and overpriced and underwhelming accommodation. But Min’s optimism still shines through and he is “still positive on tourism,” adding, “There are lots of opportunities and things to do in Myanmar.”
Adapting to Change
Despite being only 28, Htet Myet Oo is a veteran of Yangon’s food and beverage industry. The restaurateur, who along with his partner Isabella Sway Tin won the MYANMORE Awards KBZ Entrepreneur of the Year 2018, co-founded Rangoon Tea House (RTH) in late 2014 and has since established a fiefdom of eateries around Yangon.
“We have gone past a point of worrying about paying salaries and things like that,” he says. “Our next worry is building a sustainable business.”
Sitting in the high-end teashop’s upstairs Toddy Bar, Htet mulls over his company’s current position: employee numbers have doubled every year for the past four years; he estimates them to swell from 200 to 300 by August, 2019, with the team also running five Asian fast-food Mr Wok outlets Mr Wok and two Myanmar food Buthee outlets. Plans to open a food court and expand to international school canteens are in full swing.
Four years ago Htet would have welcomed the progress, but one year ago he would have expected to be in an even stronger spot. “I wish we had expanded a little quicker, but you are not always in control of that.”
Focusing on what you can control makes the most sense to Htet, who said blaming the economy is “so easy” for people. “You won’t find anyone working for us who thinks the economy has anything to do with how well or badly we are doing,” he says.
But Htet admits “a little dip in the way people are perceiving their money and value” is complicating the path for new brands. “Even though it hasn’t affected my businesses completely, I can still see a difference in the way consumers spend money.”
People believe a flaccid economy means redundancies, high inflation, and no disposable income, he said, but really “a bad economy is one where people do not know what to do with their money”—how much to spend or whether to just save.
Sentiments were different when a freshly graduated Htet returned from the UK to Myanmar in December, 2012, a time of stirring possibilities for the country. That optimism reached euphoria on the National League for Democracy’s landslide electoral victory in 2015, but “euphoria doesn’t last very long,” says Htet. “Like anything in life, after the peak you have a little down.”
Business owners then faced “an instant reality check” when the economy failed to match the jubilant mood. RTH Group continued to track customer trends, adapting its menus and introducing new products—the latest is fried chicken at Mr Wok.
It is testing new recipes on the youngest portion of their market with Buthee at the International School of Myanmar canteen and will bring noodle soup, Shan food, Mr Wok and Buthee to a North Dagon food court this month, reaching a wider Yangon audience. “We want to take calculated risks and grow a business, even in the toughest of times,” adds Htet.