Interview with Philippe Lenain
Chief Executive Officer of Rent 2 Own

Can you tell our readers about yourself and what Rent 2 Own is?

I’m a French. I have been living in Southeast Asia for about 28 years. I’m specialized in financial industries. I have lived 11 years in Vietnam, 12 years in Cambodia and 5 years in Myanmar. 

So when was your first visit to Myanmar?

It was five years ago and I came here for this Rent 2 Own project. Previously, I have started two similar companies in the same industry, Motorcycle industry, both in Vietnam. I was actually the first one to offer this service in Vietnam 12 years ago. And when I came here five years ago, it was obvious that my experience could be sort of transposed in Myanmar. I could see the conditions of development and the conditions of the market to the extent of a similar situation from Vietnam. That was why I got the idea to launch such companies that are specialized in mobility. And bringing the service to the shop of motorcycle leaders. That’s what defines our services.

How has Myanmar changed since your first arrival?

Quite a lot and better.

How did you end up in a current position?

Since the project was my idea when I first came here, my purpose was to define the project and raise the fund. And it has been only about four years that we have launched as a starter.

Why motorbikes?

It is because, by renting motorcycles, you are actually providing mobility of your client. So it is quite a large scoop. You could say that by providing mobility, you are involved in connecting two people. And it goes the same for motorcycles because mobility obviously brings a lot of advantages which does not even need to be explained much. It’s like when you are able to move around you have more opportunities to adjust the time, to save your products, to bring your children to school,… a lot of opportunities. So that is the reason why we focus, initially, on that segment. Because we believe that if you finance something, it should be absolutely worth the challenge. 

Motorbikes have been forbidden in most places of Yangon, what is your opinion on this?

It does not impact on our project because, since the beginning, we have only focused on rural mobility. And it is where the impact is more significant and again it is because you are investing in the real needs of the people who are going to be faithful to you. That is one of the reasons why we always develop towards to where it would work.

And around in Yangon, the service is available in Thanlyin, Dala and Tike Gyi. And recently, we also opened the service center in Mandalay. The places are not easy for an organization to run but they have the most potential and have the most impact.

 How does Rent 2 Own work and how do you make money through this?

It is basically a service business. We have been offering the services as the rental solution because that was the only way as a 100% foreign-owned company to operate in the market.

Who are your target customers? 

Rural customers. To be more specific, the average income of our customers is 3.5 to 4 lakhs Kyats. The usual price of our rental service is around 10 lakhs in average, over 12 months. So, if they take on their option to purchase the bike at the end of the contract, the customers usually have to finance themselves with around 20-25% down-payment, which in turn gives you the average profile of our customers. 

How far has Rent 2 Own reached in terms of internal work and customer based?

I think the direct answer is that this Rent 2 Own is still a very young market which I mean, is not quite mature enough. We have scratched the external part of the business so, by far, we have served 120,000 clients. We are missing a lot because we have about 700,000 newly-purchased motorbikes per year. So, there is a lot more to be offered in the market. Other than motorbikes, we also envisage to rent other categories of customer goods. But for the time being, we are not tempted to diversify simply because the motorcycle market is still very young. 

The bigger surprise is that, four years after our launch, we are still almost unchallenged, there is not much competitors in this kind of market. Our business partners are, of course, motorcycle shops. We signed partnership agreements with them and in this agreement, they require our staff to go into their shops and offer our products to their clients. Basically, that is how we work. They are not our agents, they are our partners. It’s our staff, who go to our partners and sign the contract with their clients. So, we are not working under the agency, it is our network and we open our small branches everywhere and these branches control our staff who operate in motorcycle shops.

Other than motorcycle shops, does Rent 2 Own have any other partnerships?

We are considering of going to other categories of assets and those considerations are the classical ones like wine goods, refrigerators, air conditioners and consumer equipment. Although we have been considering taking action, we are not yet fully launched. Also in future, we may also consider going for the project with mobile phones or cars. But the constraint is to have enough financial background, to actually be able to sell the market because you need the money to develop the business into a bigger one. It may be risky.

Although Motorcycle is already a risky item, mobile phone would be much more risky. So we have to moderate our appetites. As a consequence, depending on the risks that you are able to take, you can always cover your chances by risking more.

What would you like to say about your partnerships?

Yes, after our humble beginnings in the market, we now have large corporate investors like Incofin, DEG and Daiwa, they put their money, their names and their reputations into us.

For the operational partnership, we have partnered with Ongo which is a payment provider for us, and we have also partnered with OneStop, WaveMoney and KBZ. And if we can, we will partner with many more. 

What are the challenges or obstacles that Rent2Own has to go through?

 It is true that this is a risky business. We just make it easy for our clients to access the consumer goods, especially motorcycles. Our target is to stay under 45 minutes from the moment the client submits the application. And the service being 45 minutes is not very long. However, obviously, we cannot check on everything about each of our clients. And this translates into a risk or a late payment. The challenges might be that, at the moment, some parts of the country may still not be open to business. So this is the main challenge for the business to go out in the market. But we are patient.

How do you mitigate the risk?

We mitigate the risk by trying to really know our clients in a very short amount of time. And then we follow up through phone calls whenever possible.

What is your percentage on non-performing rental contracts?

We try to keep it at three percent. 

What do you feel are the chances or opportunities in the rental service in the next one to three years?

The opportunities are quite obvious since it is a very large market. The properties and the official statistics are very difficult to obtain in Myanmar. We can estimate that 700,000 motorcycles are being purchased by the population, officially or unofficially… registered or unregistered… though probably we can grow in the market since the penetration of our service is still small.

What do you think of Myanmar’s economy compared to other countries and what Myanmar is still lacking in?

To me, it’s a country which is emerging rapidly. Compared to when I was in Vietnam like over 20 years ago, Myanmar is a more developed country than Vietnam was. So, Myanmar is a fast developing country and will still grow a lot more compared to a country like Vietnam. Of course, each country has its past, Myanmar does have the surest way to stabilize the country’s settlement of democratic institutions. Although that may take some time, we really have to be patient.

How has the slowdown of economy affecting your company?

Our business depends on raising funding in order to grow our portfolio of our motorcycle, so our company has to raise more money constantly. We have not yet delivered the statistics of economic growth that we are expecting and we are reassuring the foreign investors to extend more funds. We have also been attracting the debt from foreign and local investors. So we have been successful in this point of attracting. 

If you could change one government policy, what would it be?

It’s quite difficult for me to comment on that, since I have no experience at running a country. Managing 500 staff at Rent 2 Own is where my expertise stops.