YANGON—Chinese online shopping giant Alibaba officially announced what it called the “world’s biggest sale” to be held in Myanmar on Nov. 11, but the government is unlikely to earn a penny in taxes from the event under current laws.
As the European Union considers trade sanctions against Myanmar over the 2017 northern Rakhine crisis, Alibaba’s move highlights the starkly different views held by Asian and Western businesses regarding Myanmar’s potential, but also raises questions about whether the country is ready for large-scale online retail, given the total lack of regulatory and tax frameworks for e-commerce here.
In May, Alibaba Group bought Daraz and SHOP.com became a proxy business for Alibaba, operating its platform under a different name. To announce its first project, “11.11 The World’s Biggest Sale Day”, which the company bills as the biggest online shopping event customers in Myanmar have ever seen, SHOP.com held a press conference in Yangon on Friday afternoon. The organizer invited popular young entertainers including singer Eaint Chit to perform.
Internet penetration in Myanmar has grown rapidly in recent years—Facebook alone has some 18 million users in the country—making it an attractive e-commerce market for Alibaba Group. However, the majority of Myanmar’s population is not yet familiar with online shopping or card payment systems.
Norine Yune, SHOP’s manager for campaign ops and merchandising in Myanmar, said in her opening remarks that the move by Alibaba is aimed at raising awareness about e-commerce among Myanmar citizens. She said Alibaba aimed to become the most trusted online shopping platform for both buyers and sellers through its deployment of the latest world-class technologies.
According to Yune, the SHOP.com website and its apps were upgraded in late September to include personalization features and data privacy protection. The platform provides separate apps for sellers and buyers. Moreover, in the initial promotion period, SHOP.com will offer zero commission for sellers.
“Everyone can sell their products via our platform. We welcome every young entrepreneur,” Yune said.
Despite the launch of such a huge e-commerce platform in Myanmar, the National League for Democracy-led government has not yet enacted any e-commerce regulatory framework, including taxation regulations. Ryan Clements, managing director of SHOP, told The Irrawaddy that the government would not see any revenue from e-commerce businesses, as there is no specific regulations on e-commerce yet.
“What I think is more relevant from a regulation standpoint is the role of governing how online trading should happen. For instance, we are very much in favor of having more regulations about helping people online and making people safer… So there are a couple of things—like data protection and fraud prevention online…. We also want to create a safe kind of environment for people to transact [money],” Clements said.
Nov. 11, designated the “World’s Biggest Sale Day” by the company, is a huge promotion day for Alibaba. The company earned $5.8 billion on the day in 2013, $9.3 bilion in 2014 and $14.3 billion in 2015. Last year, it earned a record $25.4 billion.
