Rocket's Carmudi rides on Myanmar's Internet growth potential
Even though Myanmar has the world's second lowest Internet penetration rate, Rocket Internet still believes in the potential of a site advertising cars there.
Carmudi, its free car classifieds site, has been running in Myanmar for the past year and a half, as motors.com.mm. The company also runs two other classifieds businesses there: property listing Lamudi (run as house.com.mm) and general classifieds ads.com.mm.
Rocket's bullishness is a testament to the potential, as it typically does not shy from shutting down non-performing properties that fail to gain traction quickly enough. Its online furniture store, Home24.sg, was shut down last year, and office supply shop, OfficeFab, met its death in Southeast Asia mid-this year.
Erwin Sikma, managing director of Rocket Internet's Asia classifieds division, said following the launch in Myanmar last year, it opened Carmudi sites in Pakistan and Bangladesh as well, and plans to hit more countries in Asia in 2014. In comparison, Bangladesh, where Carmudi has launched as well, has about 50 percent penetration, according to the International Telecommunication Union (ITU).
"We see huge potential in all these markets, and a clear need for a platform that creates transparency in the market," he said.
In Myanmar, the site matches buyers and sellers for the car and motorcycle secondhand market, and has several thousand unique visitors.
That might not sound like much, but remember that Myanmar has just about 60,000 Internet users. Also while its mobile phone base counts about 3.7 million people, those are primarily feature phones.
Sikma said Rocket wants to catch new users as they inevitably shift offline to online. More than 90 percent of cars in the country are sold secondhand, in physical dealerships, and the markets are pretty chaotic, he said.
"Low quality and faulty cars are often sold without proper papers, and fraud is a big issue," he said. The online site is expected to help raise accountability on the seller end, Sikma added.
With the average earning power still relatively low in the country, most people buy secondhand and reconditioned Asian brands. The most popular cars in Myanmar's former capital Yangon are the Toyota Probox and Passo, as well as the Myanmar Mini Saloon Car, a Chinese car assembled in Yangon.
Toyota has an 80 percent market share in Bangladesh as well, he said.
Myanmar's government has expressed aspirations to raise its mobile penetration to between 75 percent and 80 percent over the next three years. In June, it awarded Norway's Telenor and Qatar's Ooredoo the country's first licenses for foreign telcos.