📦 From Delivery Services to Super Apps 📱
The journey of multi-service platforms across emerging markets 🌎 🌍 🌏
Over the past half-decade, Super Apps have increasingly been seen as one of the up and coming topics of the tech scene worldwide, with Asia being recognised as the epicentre of this phenomenon thanks to the emergence of quintessential super app companies of the calibre of WeChat, GoJek, and Grab.
What is a Super App? GoJek’s website defines them as umbrella apps which offer a centralised operating system to bypass the need to always sign in to and out of different applications to access different services (they refer to this as the ‘tyranny of apps’). As a recent Forbes article explains, super apps seem to be imposing an alternative to the US/Silicon Valley model of vertical growth and global expansion by instead ‘aggressively expanding horizontally and dominat[ing] a specific geography’. A factor defining this trend has been the ability of these companies to use digitisation at their advantage to tap into existing service and infrastructure vacuums. How? Placing, for instance, a bet on the skyrocketing mobile adoption rate, especially among the youth and able population, and targeting the low percentage of banked people. This but one of the contingent traits shared by many emerging markets and among the very reasons behind the slower adoption of such solutions in European and US markets. As Raphael Dana, Gozem’s co-founder explains, ‘the Super App is a virtuous ecosystem because it interconnects inside the same application the pillars of growth for an emerging digital ecosystem: transport, delivery, payment and lending. Africa will benefit from the learning of the big guys to build more innovation on top of the unique mobile money infrastructure in place on the continent”.
Every big tech with a large user pool in emerging markets could venture to build a Super App, but some find it easier.
To date, the achievement of super app status has predominantly come as the outcome of an incremental diversification of a company’s service offering which gets bundled into a centralised portal and taps into a pre-existing pool of users and potential customers. This has historically coincided with the creation of digital, ‘all-in-one’ applications covering services ranging food shopping 🍛, to messaging 💬, payments 💳 and even domestic and cleaning services 🧹. Although conceptually, the broadening of a service suite in the digital sphere can often be associated with any company’s product development phase and is not bound to any specific sector, as of today, clear patterns can be identified in the establishment of the leading super apps across emerging markets. This article classifies four main pathways and specifically focuses on n.2:
💬 Messaging apps and social networks;
🛵 Mobility and 🛒 e-commerce;
💳 Financial technology;
🌐 Telcos.
In order, the first notable brands to emerge were giants such as China’s WeChat and — to some extent — Facebook’s Suite, which boasting billions of users, were able to experiment with new services by leveraging their large audience and weight in the market. The second fast-growing category was captained by on-demand companies such as Singapore’s Grab and Indonesia’s GoJek, which had taken a different route and expanded their suite upon by adding services to their on-demand app infrastructure. Finally, in more recent years, a new wave of investments from Big Tech firms into telecoms and large financial services companies and the steep growth of fintechs have seen the mobilisation of Asian companies such as Jio, AliPay, and PayTM towards into this space.
The cradle of super apps: China and South/east Asia
Home to the largest population in the world, the highest number of unbanked, fastest-growing GDP per capita, and some of the most spectacular mobile penetration rates, Asia is perfectly positioned to be able to harness the digital revolution. As of the end of 2019, according to Bloomberg, Asia’s internet economy was projected to hit $100 billion. COVID-19-related repercussions aside, the continent has been on a positive growth trajectory for decades, its world-class technology companies are more than ever suited to tap into a pool of over two billion mobile subscribers. Aside from triggering a fierce competition within the region, this clash of titans has recently begun entering the realm of hitherto Western and Southern markets, as companies such as WeChat, Alibaba, and GoJek look at Africa and Europe for new customer segments, and Grab achieves near hegemony in the ride-hailing and delivery market by acquiring Uber’s Asian stake. In the Middle East and South Asia, Careem has become the market leader in its countries of operations boasting a fleet and services extending from Dubai to Islamabad. Pathao follows, with activity across Bangladesh and Nepal and with a fast-growing user base, though at a significantly smaller business volume and a more limited product offering.
Fintechs chasing cross-industry synergies
As we’ll address in a dedicated map for digital and neo-banks, fintech businesses across emerging markets have been providing an unprecedented opportunity to the unbanked population by offering an entry point to the digital service economy. The last decade has seen markets swarmed with a suite of new services, from loans to credit scoring, currency and cryptos exchanges, payments, and accounting tools. Amidst the growth of the e-commerce sector, financial technology companies naturally found themselves in a sweet spot by offering the underlying payment framework that enables transactions. This positioning has allowed companies from China’s AliPay to Argentina’s Mercado Libre, Costa Rica’s OMNi, and India’s PayTM to leverage their existing infrastructure to:
Progressively branch out their payment directory to other areas, such as utility bills, event and transport ticketing, and financing;
Adding capacity and venturing new vertical such as mobility and delivery services.
African super apps: building layer after layer
Spearheaded by Jumia’s rocky journey, the African continent is currently witnessing the rise of its first generation of super apps, as players such as SafeBoda (founded in Uganda, expanded to Kenya and Nigeria) and Halan (first launched in Egypt and expanded to Sudan and Ethiopia) have been attracting international investors’ attention and achieve meaningful growth.
While one could argue that Jumia’s story resembles that of Indonesia’s Tokopedia or Singapore’s Lazada, another Rocket Internet company, startups such as SafeBoda, Gozem, and Halan, all seem to be mirroring GoJek and Grab’s journey. The story goes: an initially ride-hailing-focused company expands into e-commerce and delivery services, to then integrate an e-wallet for in-app purchases, de facto creating digital, multi-purpose ecosystems which leverage existing customer trust to tap into new verticals.
Uneven ecosystems
Taking funding as a benchmarking indicator, African markets remain the most untapped when it comes to multi-service applications, especially if compared with Asia or Latin America, where super apps have been raising investment in the order of billions of dollars. Scalability is also bound by market size. Most of these apps in Asia and Latin America have been able to access hugely populated cities such as Delhi, Jakarta, Dhaka, Sao Paulo and Mexico City, while in Africa, only Lagos could be compared by size.
Yet, the steep growth across the logistics, e-commerce and the broad, on-demand ecosystem across Africa, in addition to the direct involvement of players such as GoJek, Amazon, and Facebook, suggests that, in the near future, the continent could soon see new organisations such as Metro Africa Express (MAX) or KeyOps adapt their suite to new verticals and more sizeable funding.
Mapping and data by Lisa Hannah With; Written by Dario Giuliani.