The growth of online businesses in

Asia's Frontier Markets

Mikko TamminenExecutive Chairman, Taskeatermt@taskeater.com

BangladeshPopulation: 158MGDP/capita: $1,171

NepalPopulation: 28MGDP/capita: $698

Sri LankaPopulation: 21MGDP/capita: $3,557

Myanmar/BurmaPopulation: 51MGDP/capita: $1,221

VietnamPopulation: 92MGDP/capita: $2,052

CambodiaPopulation: 15MGDP/capita: $1,080

LaosPopulation: 7MGDP/capita: $1,692

Frontier Markets

Sources: IMF, 2014; Official Population Clocks

1 When should internet companies expand into frontier markets?

2 How should you do it?

1Low Cost of Online Marketing

$1.32

$1.09 $1.08$1.02

$0.79$0.72 $0.70

$0.59

$0.44

$0.25$0.19 $0.17 $0.13 $0.11 $0.10 $0.09 $0.09

Average Facebook Cost Per Click By Country

2The Growing Middle Class

Large PepperoniPan Pizza

London £15.45(-30%)

Dhaka £10.78

$1.32

$1.09 $1.08$1.02

$0.79$0.72 $0.70

$0.59

$0.44

$0.25$0.19 $0.17 $0.13 $0.11 $0.10 $0.09 $0.09

Average Facebook Cost Per Click By Country

-87%

3Proximity to Production

Fashion Groceries Electronics

4Untapped Markets and Low Competition

10-YEAR HORIZON

Make ROI SignificantOn International Level

Build Your Brand Using Low Marketing Costs

and Continuously Improve Service

2015Low Marketing CostsGrowing Middle Class

Poor Payment SolutionsPoor Logistics Infrastructure

Few New Entrants

2025Higher Marketing Costs

Larger & Growing Middle ClassExcellent Payment Gateways

Excellent Logistics InfrastructureRush Of New Entrants

ALTERNATIVE (WORSE)

Enter Frontier Markets, Face Higher Costs and

More CompetitionChill

2015Low Marketing CostsGrowing Middle Class

Poor Payment SolutionsPoor Logistics Infrastructure

Few New Entrants

2025Higher Marketing Costs

Larger & Growing Middle ClassExcellent Payment Gateways

Excellent Logistics InfrastructureRush Of New Entrants

How to enter?

Own Expat Team ApproachSend in own team, own majority of the company, and provide resources

+ Existing business expertise+ Control over process

- Constant need to justify costs- Typically not long term solution- Expensive- A distraction- Easy to loose conviction

Local Team ApproachHire a local team, own majority of company, and provide resources

+ Local expertise+ Cheaper+ Potentially longer term solution

- Constant need to justify costs- Lack of control and oversight- A distraction- Potential misalignment of strategy

Share Call Option ApproachFind local entrepreneurs, provide them all technology and mentoring, and have call option to buy company in future

+ Investment is minimal+ Long-term solution+ Not a distraction+ Easier to convince investors