Image: AdsZay co-founder and Ezay CEO Kyaw Min Swe has developed a network of 1600 and growing rural mom and pop shops which AdsZay is upgrading into advertising and product activation hubs.
EME and Japanese investor Seiji Kurokoshi, together with Ezay, have announced the formation of a new company, AdsZay with a combined six figure investment. AdsZay will leverage the rural shopkeeper network created by Ezay to allow FMCG companies, telco firms and other key players seeking to expand their reach to rural areas. By digitising and delivering stock direct to rural mom and pop stores, Ezay has grown to more than 1,600 active rural retailers since founding its business just six months ago. AdsZay will build a network of dedicated and exclusive ad spaces at each of these stores, paving the way for nationwide growth among brands.
Rural mom and pop shops serve anywhere from 50 to 500 households in their respective villages, with customers visiting several times each week. Market research shows that large brands are often poorly represented in rural areas as brand messages are diluted and low prices are the priority of consumers. With AdsZay’s ad display model, shop owners serve as AdsZay’s client’s partners in solidifying brand salience in their respective communities. Data collection, enquiry tracking and an immediate point-of-sale optimizes each ad display unit to ensure the effectiveness of every ad dollar spent.
AdsZay’s timing is worth noting. COVID-19 has caused companies to tighten marketing budgets and many households are facing harsher economic conditions. However, now is the time to build and upgrade the AdsZay network, train shopkeepers and fine-tune the AdsZay offer. With unique access to a growing rural network, AdsZay will spend the coming months working closely with its shopkeepers to ensure data accuracy and identify key locations for brand awareness and product activation campaigns.
EME’s Portfolio Growth Advisor, Claire Lim, a former Director at Ogilvy, is spearheading the initial stages of AdsZay company development in close partnership with Ezay’s founder, Kyaw Min Swe. After a recent field visit, Claire Lim said, “AdsZay will completely redefine the way that big brands think about these hard-to-reach areas. Very few brands are well represented at the village level and by combining high quality advertising with shop-level data, AdsZay will provide unmatched value”.
Seiji Kurokoshi, who recently led a round of investment into Ezay alongside EME, noted Adszay represented the opportunities presented by emerging markets, “Convenience stores in Japan are hubs of information in their communities. We see the same thing in rural areas of Myanmar. AdsZay will upgrade these stores and provide them with new and exciting ways to serve customers while also helping leading brands offer products to new geographies”.
Seiji Kurokoshi is a serial angel investor and avid supporter of startups in Japan and abroad, in Japan he owns and runs COEBI Incubation Office, a AAA incubation centre where he supports and invests in social entrepreneurs. His latest investments in Myanmar include into Ezay as well as Myanmar’s leading digital content provider, Bagan Innovation Technology.
AdsZay marks the ninth portfolio company for Myanmar-based venture capital company, EME since its founding in October 2018. Other portfolio companies include CarsDB, automobile eClassifieds; Joosk Studio, animation and illustration; Masterpiece Group Myanmar, business process outsourcing; Mote Poh, employee benefits-as-a-service; Natural Farm Fresh, Agri-tech; Ezay, rural eCommerce; and Kyarlay, baby products eCommerce.
Covid-19 has changed how people think about investing, at least for now. Funds were quick to offer advice that more or less said: spend less money while making the same money or more money. Which raises the question, what were companies doing beforehand? Of course the first response is that growth costs money and startups should be growing exponentially. But there’s a wider observation here which the market is closer to accepting: supporting growth at any cost and really nasty unit economics, probably isn’t always the smartest investment you can make.
What happens next? This is the question on everyone’s mind. Do we see a L-U-V? For the uninitiated, these letters indicate the possible shapes of economic recession and recovery and - spoiler alert - no one knows which it’ll be. “V” sees the economy bouncing back, “U” a slower recovery and “L” a very long / slow one. The most common sense analysis that your writer has come across suggests that the recovery will be sector-specific; regardless of the overall shape, the shape for different sectors will differ. As investors, that means finding the sectors that are going to look more like “V” than “L”. Right about now readers of this post are probably thinking of delivery businesses as hot new sectors, but we’d caution that such business has seen an increase in demand (not a decrease as many sectors) and this demand may lull as restaurants and shops open again. And so we have to think a bit harder.
Unfortunately, we’re not about to reveal all the sectors that will bounce back with a vengeance, because we don’t know. We do believe that more people in Myanmar will continue shopping online as they’ve been forced to experience its convenience, and we expect that this increase of demand will help buoy eCommerce in general. Other services going online may also fare better than before Covid-19, though not all. Will people buy more cars to avoid public transport? Probably those who can afford to will, but private vs public transport is a very income-driven choice in emerging markets. People are not suddenly better off. In fact, the economic impacts are going to hit the broad majority of people, just think about key affected sectors: tourism, apparel, agriculture, fisheries, F&B. That’s not part of the economy, that’s the economy.
Meanwhile, investors have dry powder (i.e. money to invest) and will be supporting their existing portfolios, but also continuing to make new investments. With that acknowledged, let’s say for the sake of argument that whatever happens next there’ll be some new investments being made. Here enters the role of the Schumpeterian entrepreneur: the trail blazer who spots opportunities, takes risks and creates value which disrupts the market. Heed this: consumers and businesses are going to be looking for innovations that help them through the more challenging times ahead.
Innovations are not inventions. Invention is making a light bulb, innovation is everyone using light bulbs in their homes; innovation is the commercialisation of invention. Some countries are great at invention and innovation, others less so. But, innovation can be imported from abroad (just look at China’s growth since the 90s). We’ve seen successful and unsuccessful attempts at startups using business models already popular abroad to launch products and services in Myanmar. Obviously, not all ideas that work elsewhere will work here. But many will.
We’re not suggesting for a moment that starting a business from scratch and making it a success is easy just because the idea works somewhere else. We know that it isn’t. What we are saying is that there are tough times ahead and entrepreneurship is going to be a key component in prospering through them. And so, to anyone reading this who has recently started a new venture, we commend you. Entrepreneurs break boundaries because they take risks, and that takes guts.
Got an idea? Innovation requires executing on ideas; “Vision without execution is hallucination”, meaning that it's putting the idea into action that’s the hardest part. We can all dream of flying cars, after all. To help guide your idea, we’ve developed a pitch deck template for you which asks you to answer certain questions. Feel free to use this next time you’re pitching. And, if you’d like our feedback, send it over and we’ll let you know what we think! firstname.lastname@example.org.