‘WE WON’T GIVE UP’
Japanese entrepreneurs hang on as they bet on Myanmar’s future. By Nikkei Asia
Despite Myanmar’s uncertain future after the military seized power in February, a number of Japanese entrepreneurs have remained in the country and are going about business somewhat as usual.
Sporadic internet shutdowns, new financial headaches and occasional pressure from security forces have hindered — but not yet dampened — their passion to succeed in the troubled country.
Linklusion founder Hidenori Kuroyanagi is one of them. In 2015, he established Linklusion as a cloud service for microfinance operators mainly targeting the poor. Four years later, he began a delivery service for small retailers in rural areas.
“Delivering food and daily necessities safely is valuable, especially during these turbulent times,” Kuroyanagi said.
Kuroyanagi began the service after he learned that small businesses owned by women had difficulties sourcing products in rural areas. His company stocks about 300 popular items at warehouses and makes weekly deliveries. Three warehouses are on the outskirts of Yangon and employ 70 workers.
Kuroyanagi hopes to connect delivery networks in rural areas with finance, and build a network to deliver information and services in the future.
When Myanmar’s military toppled the civilian government on Feb 1 last year, core staff of Linklusion quickly gathered in the office next to Koyanagi’s apartment, backing up data to the cloud to brace for a possible internet shutdown. They also notified local staff to suspend deliveries to ensure their safety.
The company resumed delivery service a week later, but security forces started firing on protesters in March, forcing the company to shutter all locations during April as security forces began setting up checkpoints.
“The security forces randomly question people so no one wanted to risk going into rural areas,” Kuroyanagi said.
Meanwhile, demand for delivery services continues to grow. As of late November, the number of shipping addresses hit 1,100 — up from about 800 before the coup. The increase has largely been driven by small retailers who have to purchase products far from their base, as normal supply routes to nearby markets have been disrupted.
As farmers start to run out of cash amid a worsening economy, Kuroyanagi said he wants to “support small retailers” during these difficult times.
In order to establish more logistics centres, Kuroyanagi has raised about ¥100 million (US$875,000). Although some institutional investors say Myanmar’s risk is too high, a few retail investors and businesses have shown interest, he said.
Tomohiro Yamaura, 33, is also staying on. He is the president of Finalsec, a company that provides online English lessons.
Yamaura serves mostly Generation Z customers in urban areas, who came of age after the country shifted to civilian rule in 2011. It teaches university students and young adults through virtual one-on-one meetings.
The company had used Facebook for classes but after the military takeover, the social media platform was blocked and hindered by nightly internet shutdowns. The company had 860 students in January last year, but the numbers fell by nearly 70% to 280 over the next three months.
“With no prospects, both teachers and students were pessimistic about the future,” Yamaura said. But he decided to plod on “because I thought I can’t easily give up the business with so many people involved”.
Yamaura says he is starting to see a few glimmers of hope. Although universities have remained closed and conditions remain tough for young people, “many are beginning to think they have to brush up their skills for the future”, he said.
Finalsec had about 1,500 students in December — up more than 70% compared with before the military seized power. Yamaura thinks it is because many young people are hoping to learn a foreign language to increase their chances of working abroad.
The company hired new management staff in September “to nurture personnel who will lead the company’s future in 10 to 20 years’ time”, he said.
“Delivering food and daily necessities safely is valuable, especially during these turbulent times”
HIDENORI KUROYANAGI Founder, Linklusion