5 things to know about working in rural Myanmar

A woman using mobile phone in rural Myanmar. Businesses looking to invest in Myanmar should not underestimate the potential of mobile services in the country, according to the co-founder of a long-established social enterprise in the country. Photo by: Ole Stobbe

Often viewed as Asia’s last untapped market, Myanmar is unsurprisingly attracting a growing number of international companies and development organizations that want to participate in — and benefit from — its economic and political transition.

Rapid and dramatic reforms and a steady transition from military dictatorship toward democracy have also encouraged traditional donors to up their pledges for the Southeast Asian country, earning its place as one of few “donor darlings” among developing countries.

But unlike nongovernmental organizations, whose development and humanitarian work is being slowed down by a lack of effective systems to handle and administer foreign aid, for-profit firms and social enterprises face fewer hurdles. That’s not to say they don’t face any challenges though.

For instance, 80 percent of Myanmar’s population lives in rural areas. Those looking to operate in this environment will have to find ways to reach and impact these rural households despite the country’s poor transport infrastructure.

As a social enterprise that designs income-boosting products and services for rural Myanmar, Proximity Designs has been active in this unique market for a decade. The following lessons are based on my insights from 10 years at the head of this organization.

1. Myanmar is not the “next Vietnam.” Understanding the context surrounding the country’s transition is essential.

Myanmar is starting from a unique base that can be misunderstood. Emerging from five decades of state neglect, and political and economic isolation, the country doesn’t have the educational and public health base to build on that Vietnam’s socialist system provided for its citizens. It also has a long history of conflict, resource extraction and feudalistic tendencies by elites.

Myanmar is now embarking on a difficult triple transition: from military rule to a more democratic government, from ethnic wars to peace and from extreme poverty to broad growth. Data is hard to come by — the government recently conducted its first census in 31 years — but it is estimated that 70 percent of the population remains off-grid.

Myanmar however is opening up to the outside world at breakneck speed. Its strategic location bordering global superpowers China and India, and surrounded by dynamic neighbors such as Thailand, Vietnam, Singapore and Indonesia means unprecedented markets are now more accessible. There’s also been a rapid influx of inexpensive, imported technologies, services and ideas.

As a result, rural Myanmar is experiencing rapid changes: Connectivity is growing daily with the advent of telecoms and inexpensive transport (motorbikes), cheap solar panels from China are quickly rendering household diesel lanterns and candles obsolete, and ease in mobility has accelerated rural out-migration, resulting in farm labor shortages and greater demand for farm mechanization.

2. Mobile access can dramatically transform the rural landscape, but a multichannel approach is key.

Mobile phone use is soaring. When I first moved to Myanmar in 2004, a SIM card cost $3,000. That price dropped to $120 last year, and today it’s $1.50. An imported smartphone costs as little as $45, so most first-time buyers are bypassing feature phones altogether. Touch screens are well-suited for a generation with low literacy and limited typing skills. Most new users will make their first phone call through free services such as Viber, not through a landline or a telecom service. Widespread mobile penetration will open up possibilities for mobile money and services that provide basic financial, health or agricultural information.

However, we should not underestimate the value of face-to-face support. After five years of offering Farm Advisory Services that help farmers learn sustainable techniques, we’ve been developing a mobile app to spread this knowledge to a broader user base.

Throughout the process, we’ve come to appreciate the need to complement the mobile app with “high-touch” services such as voice, in-person visits and farmer gatherings. In fact, we’re currently expanding these services more broadly throughout rural Myanmar. While mobile apps can become an important way for companies to communicate with customers, a multichannel approach will nevertheless be critical to success.

3. Design matters. Understand rural users and the problems they are trying to solve.

Rural households in Myanmar are resourceful and entrepreneurial — they’ve had to make do for decades without outside support. At the same time, they are aspirational and eager to adopt new technologies. They also have growing energy needs and vast unmet demand for basic goods and services.

Myanmar’s base-of-the-pyramid customers are quite nuanced, and models that have worked elsewhere may not succeed here, unless organizations are willing to invest time and energy to understand customers and adapt accordingly. For example, while simple solar lights that can charge feature phones are popular in India and Africa, Myanmar customers need versions that can charge smartphones.

Rural customers in Myanmar look for affordability, convenience and quality as well. A human-centered design approach has helped us create a new “on-the-move” loan product to help seasonal migrant workers from villages. We adopted a deep dive approach while working with VISA and Studio D to design the loan size, timing and repayment schedule. Because we worked closely with rural households at every step, we’re able to develop a product we believe is culturally relevant, convenient and accessible, and that provides a better alternative to costly informal loans.

4. Distribution is king, but financing is queen.

International companies are drawn to Myanmar’s large potential market size, yet they can underestimate the distribution challenges posed by inadequate infrastructure. A big challenge in serving rural households lies in reaching them. There are 65,000 villages in Myanmar and many of them can be reached only by boat, motorcycle or ox cart. Companies have to be ingenious if they’re going to effectively conduct last-mile distribution. For Proximity, that has meant leveraging existing bus networks and offering incentives to local retailers and agents willing to sell our line of low-cost irrigation equipment.

Even if we succeed at delivering products to far-flung villages, cash-strapped rural customers still need financing options to make purchases. Purchasing power in rural areas remains limited. Most rural households don’t have access to alternative forms of affordable credit, so it’s important to design and offer financing options if rural demand is to be fully tapped. If the priority is to help rural customers access technologies and services, then enterprises must find a way to offer payment plans and build the networks for collections.

5. The lack of human capital remains the biggest constraint.

The capability of attracting, developing and retaining skilled and committed local talent will be key to succeed not only in rural Myanmar, but anywhere in the country. The entire nation faces a critical shortage of managerial talent. It will take major reforms in the country’s educational system, broad-based income growth and a generation before the country can make up this shortfall. In the meantime, organizations with operations in rural Myanmar will need to invest heavily in staff development programs.

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About the author

  • Jim taylor profile

    Jim Taylor

    Jim Taylor is the co-founder of Proximity Designs, a Myanmar-based social enterprise, with his wife Debbie Aung Din in 2004. He has worked in the Mississippi Delta, Cambodia, Indonesia, and California, engaging the nonprofit, public and corporate sectors. He has an MPA from the Harvard Kenedy School and an MBA from The University of Southern California.