Myanmar Startups and Highway Express Bus Ticketing - A closer look

Digitization of highway express bus industry

by Soe Lin Myat

Highway express bus ticketing has been an interesting area for Myanmar startups with a few high-profile investments. Innoveller has emerged as a dominant software-as-a-service provider for the back-end operations for bus operators. Agent networks have been trying to gain market share for the front-end ticketing sale. How will different pieces fall into place as the industry matures?

[Disclaimer] I would like to thank Ma Thet Mon Aye, the founder of StarTicket, and Ko Kyaw Kyaw Win, the founder of Innoveller, for answering my questions in preparation for this article. StarTicket and Innoveller are two notable local startups, operating in the highway express bus ticketing industry. This article is based on my current understanding of the industry and may not reflect the views of Ma Thet Mon Aye or Ko Kyaw Kyaw Win. I am hoping for feedbacks and discussions from people with intimate industry knowledge in the comment section so that we can create a wholesome account of the industry.

Market Size

With around 300 bus operators ¹ and more than 3 millions monthly rides, highway express bus ticketing is a relatively large industry for Myanmar. Assuming 4,000 buses in operation a day with average of 30 filled seats, we estimate monthly rides of 3.6 millions. Assuming the average ticket price of 6 USD, we estimate the annual market size to be 260 millions USD.

While the market size does not reach a billion dollar mark that most global startups usually aim for, it is an attractive industry for local startups to disrupt and use as a starting point before expanding to larger markets.

Stakeholders in Highway Express Bus Industry

Stakeholders in Highway Express Bus Industry

Operators are major stakeholders in Myanmar highway bus industry. Some notable operators include Mandalar Min, Myat Mandalar Tun, Shwe Zin Sat Kyar, Elite, JJ and Gi.

Some operators such as Elite operate fully with their own fleet, while others set up a revenue sharing scheme with bus owners, who invest the capital for the purchase of buses, for part of their fleet. Operators are responsible for the daily operation of buses, gates and ticket sales. Large operators run more routes with hundreds of buses while small ones focus on a few popular routes to remain profitable.

Operators deploy two sale channels - direct sale and agent network. The direct sale consists of sale through bus gates, phone calls and operators' own websites. Agent network consists of both online and office agents who may be individuals, mom-and-pop stores, travel agencies or payment networks.

Since 2014, ticket and cargo management software-as-a-service (SaaS) providers have also played a role in optimizing the ticketing operations of bus operators.

The government regulates the industry with a set of guidelines for operation and ticket pricing.

Digitization of Highway Express Bus Industry

Inspired by the success of RedBus in India, StarTicket was formed in 2014 to digitize Myanmar highway express bus operations. Its ticket management software became the first to gain significant support from operators ². Large operators, such as Mandalar Min and Elite (Elite eventually developed their own system), jumped at the chance to optimize their daily ticketing operation with StarTicket. Previously, ticketing agents had to call bus operators to confirm the seat and bus operators used paper to keep track of sales. This process often caused human errors, resulting in duplicated or lost sale. StarTicket system streamlined the process and improved the efficiency of the ticketing process.

To improve the attractiveness of the SaaS offering, StarTicket also launched an online ticketing website, app and an agent network to drive sale. The agent app instantly became popular with individuals and mom-and-pop stores because it allowed them to sell tickets from any bus operators in the app without having to place deposits with individual bus operators. The early success of StarTicket prompted Forbes to name Ma Thet Mon Aye and Ko Zarni Nway Oo, the sister and brother founders, in Forbes Asia’s 30 Under 30 list in 2016 ³.

In early 2017, Innoveller, another ticket management SaaS startup, became popular among bus operators due to their superior software and service. With StarTicket giving more focus to the front-end sale effort through their website, app and agent network, Innoveller gained significant ground and eventually became a defacto ticket management SaaS provider for highway express bus operators. Innoveller subsequently raised a six digit sum under Series A funding from a Myanmar VC firm, BOD Tech Ventures ⁴. By early 2019, Innoveller has processed more than a million tickets, about 30% of the whole market, on monthly basic.

Competition for Ticket Sale

Sale by Bus Operators

Before 2015, most tickets were sold at bus gates, ticketing agents and through phone bookings. The bus operators deployed a large number of customer service personals to answer the calls and manage the bookings. Since then, the use of ticket management software has streamlined the process and the widespread use of mobile phones among the general public has enabled them to have more viable sale channels.

Mandalar Minn, which claims to have largest fleet ⁵, currently operates http://www.mandalarminn.com.mm/ for direct sale to customers and utilize an android app to manage the sale of its agent network. Ticket management SaaS providers, such as Innoveller, help operators with the set-up and technical support for their websites and agent apps. A quick check on Google Play Store shows that 44 operators are currently using agent network apps managed by Innoveller.

Some bus operators' agent apps supported by Innoveller (Screenshots taken on 10 May 2019)

Sale by SaaS providers

Most SaaS providers also run their own websites and agent networks for front-end ticket sale to capture more value of the market. Innoveller operates https://www.mmbusticket.com and its own agent network. Similarly, StarTicket operates https://www.starticket.com.mm/ and claims to have more than 500 agents and process more than 2,200 tickets in 2016 ⁶. Real time access to seat database enables SaaS providers to allow their customers to instantly purchase and confirm a seat on their websites. Another notable SaaS provider with online ticketing websites is Green Myanmar Travel & Tours which operates https://www.bnfexpress.com/ and https://myanmarbusticket.com/.

FlyMya.com, which targets foreign travelers, works with Innoveller to sell tickets on their platform. FlyMya and Innoveller share a common investor in BOD Tech Ventures.

Google Search Ranking for highway express bus ticket in myanmar
Google search ranking for "highway express bus ticket in myanmar" (Screenshot taken on 10 May 2019)

A quick search for "highway express bus ticket in myanmar" in Google currently shows Green Myanmar Travel & Tours's https://myanmarbusticket.com/ at the first position, followed by StarTicket's https://www.starticket.com.mm/.

These websites usually provide online payment options such as MPU, Master, Visa, Mobile wallets such as CB Pay, KBZ Pay and online bank transfer. https://www.mmbusticket.com by Innoveller also allows customers to make payment at convenience chain stores such as G&G, City Express and ABC.

Payment Networks

Over the past few months, mobile wallets such as Wave Pay, OKDollar and KBZ Pay have also gained significant tractions among users. To attract more agents and users to their platform, they have set up a revenue sharing scheme with SaaS providers to allow users to purchase highway bus tickets from their wallet apps. Wave Pay and KBZ pay currently work with Innoveller, while OKDollar owns Go-Auto Ticket. Get Digital Store, which is a Point of Sale application / mobile wallet, also works with Innoveller.

Road Ahead

Highway bus ticket and cargo management SaaS is currently dominiated by Innoveller with more than 30% market share. Smaller players face an up-hill task in competing with Innoveller which has support from most major bus operators. The cooperation between Innoveller and payment network such as Wave Pay and KBZ Pay builds a network effect around Innoveller, making it harder for bus operators to change to a new provider. Innoveller is unlikely to lose its leadership position unless there is a major structural change in the industry such as development of high-tech bus stations with built-in management software. However, such developments require huge investment and take years to develop.

The challenge for Innoveller will be to capture the value of the market it has helped consolidated as a SaaS provider. SaaS portion for a market of 260 millions USD is relatively small. It would be hard for Innoveller to extract significant revenue from bus operators for its software services especially when bus operators feel they have other choices. However, this is starting to change with competitors dropping out and Innoveller providing websites, agent networks and now even new sale channels through collaboration with payment networks to the bus operators. Innoveller's entry into front-end sale also creates a new revenue stream. It is yet to be seen if the dominant nature of Innoveller in the SaaS market will eventually allow them to extract more revenue from the market while providing added values to its partnered bus operators.