🌌 STARTUP ECOSYSTEM | GOBI CASHMERE | PEACEFUL PROTESTS

Good morning! If you’re currently residing in Ulaanbaatar we hope that you enjoyed the warm weather from the last few days. It will be a little colder this week, so don’t rush to dress too lightly. 

  📌 DID YOU KNOW?

Mongolia ethnicity-wise: 

• There are more than 25 different ethnic groups. (National Statistics Office)

• The Khalkha Mongols are the dominant ethnic group that makes up around 84% of the population. 

• Other ethnicities counting at least 40,000 people in the country are the Kazakh, Durbet, Bayad, and Buryat people.

• Mongolia’s population is only 3.4 million, but the total number of Mongols worldwide exceeds 10 million, with more than 6 million living in Inner Mongolia within China, and 600 thousand - in Russia.

🌌 MONGOLIA'S STARTUP ECOSYSTEM

The map above published by START, a Mongolian venture builder company, highlights 109 different startups that have emerged over the last few years. Since it would take an eternity to describe all of them in detail we’ve chosen 3 startup sectors that are worth a closer look. Read on!

Take the healthcare tech

For a country where a part of the population leads a nomadic lifestyle in remote areas and many hospitals suffer from excessive demand, the emergence of digital healthcare services might have been quite natural. The recently founded startups, including mend and clinica, all offer professional medical services available from home. And if we mention some of the more creative business ideas besides the ever-growing telemedicine area…

• Get help anonymously: Blindcare is a mobile application where you can get professional mental health advice without disclosing your identity. 

• Every gym is your gym: ONEFIT offers a membership plan with which you can visit a different gym every day. 

E-commerce - another race

From the place where you buy, to the spot where you sell - the e-commerce landscape is getting broader day by day. Aside from the online shop that offers products exclusively made in Mongolia, there is even a special platform that allows retailers to set up their online store, while simultaneously providing delivery services.

• Fun fact: 30% of all Mongolians aged over 15 have purchased goods and services online at least once in their lifetime.

Modern money

As we mentioned in one of our previous editions, Mongolia couldn’t avoid the global crypto craze. Where’s demand, there’s supply. Consequently, the last few months have seen a series of new crypto exchanges, nft marketplaces, and other apps and websites aimed at quenching the digital thirst among the population. Since we’ve written about the major exchanges before, take a look at the nft platforms below.

• Mongol NFT

• NFT.mn

• tradenft

Startup funding startups

In conclusion, it’s a must to mention that there are various fundraising, investment and accelerator-type companies, such as Shark Tank, MStars Hub, and Founders Institute. Perhaps, their recent emergence represents all the possibilities the Mongolian startup scene has not only for aspiring entrepreneurs, but also for trend savvy investors looking for new frontiers. And if you’re either of these, stick to us and read further. 😉 

📢 ​POSTERS FROM JAPAN 30 YEARS LATER

To mark the 50th anniversary of the establishment of diplomatic relations between the two countries, the Embassy of Japan and the Fine Arts Zanabazar Museum are organizing an exhibition entitled "Posters from Japan 30 Years Later."

The posters are the work of Japanese artists from 30 years ago, through which you can get a peep into the 90’s world of Japanese advertising, graphic design and printing technology.

A number of lectures, concerts, and other performances have already been held within the framework of the exhibition, including: 

• “Japan immortalized in posters” lecture by a Mongolian japanologist D. Tumurbaatar

• A taisho-goto music show performed by Mongolian children

• A kendama toy performance, again, carried out by Mongolians

So, if you want to take a look at how the culture of Japan fares among our population, pay a visit and don’t forget to follow the Zanabazar Museum’s official page where they post information about upcoming events.  

The exhibition specifics: 

• Duration: April 1 - 17, 2022

• Location: Fine Arts Zanabazar Museum, Sambuu St, Ulaanbaatar, Mongolia

👚 GOBI: GO FOR CASHMERE

Mongolia’s top cashmere brand, Gobi (GOV), is quickly rising on the international scene. You might have even seen their ads on Times Square in New York city. Whether you have or not, here’s what you need to know about them. 

1977: The Mongolian government decides to build a goat cashmere and camel wool processing factory in Ulaanbaatar with a grant provided by the Japanese government.

1981: Gobi opens its first factory with goat cashmere and camel wool manufacturing facilities, technologies, and machinery that was the first of its kind in Mongolia.

1991: Introduced international standard ISO-9000 to become the first factory in Mongolia to receive the International Quality Trophy and Certificate.

2007: Gobi JSC becomes fully privately owned after “FCI” LLC purchased 73.45% of Gobi's state-owned shares.

2016: Opens first official branch store in Berlin, Germany.

2019: Merger with Goyo LLC, the largest merger in the global cashmere industry.

Financials

Gobi’s financials appear promising despite losses in recent years. Total revenue in 2021 reached $47.8 million ($38.8 million in 2020), an increase of 23% from the previous year. From this amount, 46% is domestic, 26% is foreign wholesale, and 28% is foreign online. Losses, however, were $15.3 million and $12.5 million in 2020 and 2021 due to Covid-19 restrictions as well as heavy marketing costs. Going forward, as foreign sales grow and online sales become a higher percent of total revenue, they may easily go back to making a profit. 

Domestic Market

In the domestic scene, Gobi is already the top cashmere brand. With 2 branches in Ulaanbaatar and 1 branch in Darkhan, Gobi accounted for 69% of the cashmere market. Moreover, they sold 403 thousand products and made $22 million in revenue last year, which is a growth of 29% and 35% respectively from the year 2020. However, the last two years were especially difficult, with no foreign tourists due to the pandemic and a series of lockdowns that closed stores for 59 days.

International Market 

Gobi’s international sales have increased greatly in recent years. This can be attributed to more effective marketing and promotion measures that have introduced the Gobi brand to the world. Today, they have 3 subsidiaries, 1 branch store, 27 franchise stores, 12 online stores across the world. 

Wholesale: In 2021, Gobi had sales of $12.2 million, an increase of 2% from the previous year. A total of 311,000 products were sold in the foreign markets, an increase of 6% over the previous year.

Online: Gobi has been developing its online sales channel, focusing on the Europe, the United States, and China. Sales in these regions amounted to 19%, 6%, 3% of total revenue respectively. Through online sales, Gobi sold 177 thousand products and made $13.5 million in 2021, an increase of 29% from the prior year. 

The Future of the Gobi Brand

While the Gobi brand is already well-known in the domestic market, it is relatively unknown to consumers around the world. Therefore, Gobi has been making efforts to promote the Gobi brand through marketing campaigns and partnerships in the biggest markets around the world. In a nutshell, the Gobi brand emphasizes sustainability through their traceable cashmere. In other words, each Gobi product can be traced back to each step of the production process including its sourcing, designing, manufacturing and so on. To take a look at their Spring/Summer 2022 line you can visit...

As Gobi’s brand awareness grows worldwide, sales are likely to soar, along with their stock price on the Mongolian Stock Exchange.  So, make sure to keep Gobi (GOV) on your watchlist. 

🔔 EXPORT MONGOLIA

In the first quarter of 2022, Mongolia’s Balance of Trade had a surplus of $251.3 million. It’s important to note that the total amount of main exports trended downwards, in extreme cases 1.4 million barrels of crude oil in 2021 Q1 fell to the floor this year. However, due to the saving grace of increased commodity prices, Mongolia’s exports only exhibited a 2.92% decrease compared to 2021. The global gold imports increase in 2022 due to the many postponed weddings and jewelry demand surge in the upcoming wedding season seems to have raised our gold exports. We wish a happily ever after for everyone!

🏛️ MSE WEEKLY

• Total volume of 3,4 million and $0.9 million worth of shares were traded last week on MSE. TOP-20 Index fell 0.84% last week to 38202.82.

• Most traded stocks were APU (APU) and Mandal Insurance (MNDL) with 0.4 million shares each, Monos Foods (MFC) with 0.3 million shares traded, making ⅓ of the total volume.

• Shareholders meeting to keep an eye on in the upcoming week: Bodi Insurance (BODI) on April 12, and Invescore (INV) on April 15.

🏃 QUICK STORIES

📌 MIAT launches regular direct flights to Istanbul. Starting from April 6, the national flag carrier, MIAT Mongolian Airlines, has begun to conduct direct flights between Ulaanbaatar and Istanbul on Wednesdays. Previously, regular direct flights between the two cities were only offered by Turkish Airlines. 

📌 Asset quality review is necessary for commercial banks before IPO, says Yoon Seokhyun, IMF Resident Representative. According to the Central Bank of Mongolia's strategy, banks need to launch an IPO on the stock market in June 2022, and reduce their shareholder concentration by the end of 2023. Only two months left with no progress on the review, the IMF recommends CBOM to postpone this period.

📌 Mongolia’s first Open-end fund registration documents filed. Since the Law on Investment Funds passed in 2013, only private investment funds have been established and managed. In 2020, the first joint closed-end mutual fund was established, and now we are close to witnessing the first Open-end mutual fund.

📌 Jade Jade Gas Holdings signs MoU with UB Metan LLC. Jade has signed a non-binding gas offtake MoU with UB Metan LLC, Mongolia’s largest LNG distributor. The partnership is driven by an alignment to support Mongolia’s desire for improving the country’s energy independence, energy mix, and meeting climate change commitments.

📷 A GLIMPSE OF MONGOLIA

On April 7 and 8, there was a peaceful youth protest in front of the Parliament Building at Sukhbaatar Square in the capital, Ulaanbaatar. Mongolian youth, frustrated with high inflation and taxation, ever growing debt, corruption, and injustice, demanded equal pay and equal opportunity saying "Do Your Job!", "We want to live well in our Mongolia!". It's hard to say what was the final straw that broke the camel's back, but it was only a matter of time that the people would stand up for themselves. Hearing the government's advice for citizens to tighten their belts once again, they returned the advice back. It’s time for the government to be frugal!

How much can we cut out of our life until we end up less than a human? How much of a lottery does a life have to be? Tax return lottery, kindergarten lottery, importing goods through customs lottery. On the second day of the protest, the youth also protested against police brutality that happened on the previous night after the peaceful protest. Even our right to life seems to be a lottery. 

We want to live in a country where human life is cherished, hard work is valued, equal opportunity is provided and justice is upheld. Our voices were heard and will continue to do so.

ESSENTIAL LINKS

• Not sure where to eat in Ulaanbaatar? Food and drink reviews in English. (Dodddo0)

• What Genghis Khan's Mongolian sounded like? (NativLang)

• Risks UK businesses may face in Mongolia. (GOV.UK)

• Are the Mongolian stereotypes true? (Real Mongolia)