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The startups on a quest to be the “African super app”

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Super apps – platforms that offer various services under one umbrella – are proliferating across various emerging markets, including Africa.

In recent months, Russia’s Yandex announced its foray into the space, and India’s Tata wants to launch its own super app by early 2021. Other international examples include Gojek, Grab, Rappi, Meituan Dianping, and WeChat.

Indeed, super apps are increasingly the holy grail of the internet economy, especially in emerging markets. Emeka Ajene is co-founder of the Togo-based Gozem, which began life as a ride-hailing service but is now building out a super app by adding services including food delivery. He says companies like Gojek and Grab have served as an inspiration to his company.

“As we launched diverse ride-hailing services, from motorcycle taxis to tuk-tuks to standard car taxis, we noticed some users leveraging Gozem beyond its intended use as a personal transport service in order to make different types of commercial and personal deliveries, so we built out these functionalities in the app to better serve these use cases,” said Ajene.

Today, with the Gozem app, customers can order a ride, arrange the delivery of merchandise and goods via Gozem’s cargo offering, and order groceries, electronics, and other e-commerce items from partner supermarkets and vendors. In August, it transitioned into a new super-app interface in order to make it easier for our customers to use the various services.

Gozem is not the only African company taking this approach, one that has been tried and tested globally. Algeria’s temtem also started by getting adoption in the transport vertical, and it is now turning on more icons over time. Founder Kamel Haddar said the company’s pre-existing plans to become a super app had been accelerated by COVID-19.

“As the strategy was already to migrate from ride-hailing legacy service to a wide service range on one app through a super app ecosystem, we accelerated the implementation as COVID-19 struck and pushed us to pivot with the launch of new services like grocery delivery, online shopping, home services, and healthcare,” he said.

But are they relevant to Africa?

Both Ajene and Haddar believe what has proven successful in other emerging markets, notably Southeast Asia, can work in Africa too.

“We believe that Africa, as some parts of Asia have, will jump directly into the new world, where services and payment are available directly on your smartphone or computer. Therefore, Africa aims for digital, and digital facilitates by solving many daily life issues through targeted services. Mobility, transport and logistics, finance, education are fields that suffer from low development and particularities that technology can solve by creating direct and easy-to-access marketplaces, and logistics optimisation,” Haddar said.

Ajene said super apps are well suited to fragmented markets where there are few dominant players across verticals, and where there are large opportunities to create real value for consumers beyond what currently exists.

“While this doesn’t quite fit many markets like Europe or the US today, it captures some of the more salient features of many markets in places like Africa and Southeast Asia,” he said.

“Moreover, in the African markets of today, users are largely mobile-first or even mobile-only, there’s been a proliferation of lower-end smartphones with limited storage capacity, data costs are relatively high compared to income levels, and you have many users coming online for the first time.” 

These market characteristics, Ajene believes, further augment the opportunity for super apps in the market in various ways.

“For example, users who have limited phone storage are more likely to place a higher value on a single app that allows them to meet a variety of needs as opposed to multiple different apps that force them to first think about which photos and other content to delete in order to make the required space on the device,” he said.

That being the case, why have there been so few until now?

For an opportunity apparently so significant, there seem to be relatively few African super apps. Ajene says this is due to the nascent nature of the ecosystem. Super apps are a relatively recent phenomenon globally with WeChat, generally recognised as the pioneer in the space, having launched in just 2011.

“Today, there are a number of super apps or aspiring super apps across the African continent and they generally seem to fall into four buckets. There are super apps that rely on a ride-hailing fleet as their core asset, super apps spearheaded by financial players, super apps spearheaded by other large institutions, and super apps with direct links to Asia,” said Ajene.

Gozem and temtem, as well as Uganda’s SafeBoda, fall into the first bucket, with financial players like Cellulant and GTBank falling into the second. Ajene mentions the MTN and Jumia partnerships as an example of bucket three, and for bucket four points to Chinese entrants into the African market such as OPay and PalmPay, that seem to be replicating similar models that have succeeded in China and other parts of Asia.

“The model, while in its infancy, has its fair share of proponents across the continent. And this doesn’t even mention the various players with ambitions to own all the opportunities in specific verticals. Cameroon’s Healthlane, for example, has described itself as a “super app for anyone across the continent to access healthcare”, while Nigeria’s Eden has called itself “a super app for domestic services”,” he said. 

”The super app sector in Africa is rather dynamic and growing as more entrepreneurs and investors recognise the relevance of the model across African markets.”

What are the challenges in rolling out super apps?

There are many local African services or applications willing to offer specific services in areas like mobility or shopping, but offering them all in one place requires a strong initial user base to capitalise on. This is what Gozem, temtem and their ilk are doing, building a customer ecosystem in one vertical before moving into others. 

Expanding into various other verticals requires a company to understand the behaviours, mindsets, and pain points of various stakeholders, including clients and partners, and to build solutions that respond in kind.

“As services are rolled out across multiple verticals, it’s not only important to satisfy a client, but also a driver, and a vendor, restaurant, or other third party as well. The question quickly becomes how do you make sure everyone in the ecosystem derives meaningful value from what you offer. And the way to successfully answer that question comes from a deep understanding of the players in the ecosystem and what motivates them. It’s simple, but not easy,” Ajene said.

Simply agglomerating various unrelated services into a single app does not make it a super app, something WeChat discovered when it initiated its doomed launch into Africa with a ready-made super app that failed to build much of a user base across any of its verticals.

“Successful super apps are driven by high-frequency use cases, often two-wheeled personal transport, but possibly also instant messaging, payment wallets, or even hyperlocal delivery and they leverage core platform assets. The major driver of the super app flywheel, as evidenced by global successes, are high-frequency use cases that lead to massive consumer engagement and adoption,” said Ajene.

Haddar concurs, saying temtem makes sure to generate a maximum of flow within the app by offering daily-use services such as mobility and finance.

“This results in revenue and data, which is key as it allows us to leverage opportunities in specific markets as we now know more about consumers than the brands that want to target them,” he said. 

“The big challenge is also organisation, as you need to provide your services consistently in one place, to serve consumers in the best way with top technology, excellent customer support, strong partner management, fast logistics, and reliable finance.”

Both Gozem and temtem are, for startups based in Algeria and Togo at least, pretty well-funded, and this could prove crucial as they pioneer the super app space in Africa.

“Partnerships are essential to create the brand and attraction from the customers and benefit from big partners’ advantages – purchase rates, marketing, logistics’ assets…,” Haddar said. 

“They also allow fast and effective presence at national or multinational level. Funding is also essential to scale as important investments are needed quickly – technology, logistics and talents.”

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