Illicit imports threaten Myanmar’s e-commerce players

The commerce ministry committed to developing the country’s nascent e-commerce sector as a means to boost trade and create jobs, but the lack of infrastructure and rampant illicit trade pose a serious threat to the emerging industry.

The report from the United Nations Conference on Trade and Development (UNCTAD) titled “Rapid eTrade Readiness Assessment of Myanmar” was presented and discussed by government officials and stakeholders in Nay Pyi Taw recently.

The publication argued that improving the legislative and regulatory framework is needed to properly govern the industry. This means taking more active steps on consumer protection, privacy, security of transactions, cybercrimes and other problems that have been part of the digital ecosystem.

It also predicted that e-commerce can benefit, in the long run, the retail, healthcare and tourism sectors.

“Myanmar should build on the strengths identified by the study: a competitive telecommunications sector, a growing tech-savvy youth population, innovative logistics solutions for the door-to-door delivery of e-commerce parcels and a fledgling tech start-up scene,” Shamika Sirimanne from UNCTAD commented.

The Myanmar Times talked to Myanmar (BarLoLo), a Yangon-headquartered start-up, about the sector’s development. BarLoLo is an online marketplace that allows individuals and business owners in Myanmar to buy and sell items in an easy and efficient manner.

U Min Min, the company’s COO, believed the country is on track to see accelerated digitalisation in the next five years. Key to developing this fledgling e-commerce industry is a proper level of government support and avoiding over-regulation, he added.

“Local players will need time to work out the most suitable model that works for the Myanmar market at this particular junction. The biggest impediments limiting e-commerce development overall is infrastructure, both on logistical connectivity across the country and online payment penetration among users,” he explained. BarLoLo goes the extra mile in monitoring and approving items listed on its platform, but, ultimately, the sellers should shoulder the responsibility to comply with the regulations.

The paramount threat posed to local players is illicit trade.

“Our biggest concern would be the potential increased influx of untaxed illegally imported products as established Chinese e-commerce players aggressively expand their reach in neighbouring ASEAN countries to further boost sales through for Chinese manufacturers and distributors.

“We believe consumers benefit from improved product variety and selection through cross-border imports. However, untaxed illegal imports harm the livelihood of local merchants as illegal traders are able to sell goods at much cheaper prices than locally manufactured or legally imported products,” U Min Min said, adding that illicit trade also sabotages growth ofthe domestic manufacturing sector.

Major cities, namely Yangon and Mandalay, are expected to see the quickest growth in e-commerce. But even then, it holds little trust by customers who are used to a “hands-on” retail-based shopping approach, according to the UNCTAD.

Reforms, such as improving the legal system to increase trust in online transactions, could help bridge the trust deficit. Meanwhile, the national postal address system also needs to be overhauled to make it easier for businesses to deliver products door-to-door.

“To fully realise the benefits of e-commerce, we need a national strategy that will align different stakeholders towards a common vision. The assessment provides a roadmap for what needs to be done, but we need to coordinate our policies and activities,” deputy minister of commerce U Aung Htoo said.


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