Super Apps - Competitive Advantage
Some of the barriers to entry for new entrants into the super app market in Africa include expensive data plans and the unreliability and the fragmented characteristics of online payments and distribution network in the region. Meanwhile, some of the best practices on how to defend a leadership position in the African super apps market include taking continuous steps to play in bigger markets, changing the rules of the game, and increasing the dependency of the users on the solutions being offered. These findings were also detailed below and inputted into the shared presentation starting from slides 4 onward. The earlier findings from the initial research were inputted in slides 2 and 3.
Best Practices to Defend a Leadership Position
Continuous Market Expansion
- Based on what several super apps in Africa are doing, some of the best practices to improve competitive advantage and defend a leadership position in this segment include ensuring that the super apps can continuously meet the increasing customer demands by scaling further. Nowadays, consumers are searching for solutions that have more avenues for payment across the continent. The super app Mula is an example of a super app in Africa that is doing this.
- Super apps can also gain more advantage by going for a segmented market approach, serving various types of customers and business segments.
- Super apps typically start by offering bills payment. However, these apps ensure that they cover various industries where money need to pass through such as "banking, ecommerce, hospitality, food, travel, logistics and agriculture."
- The super app Tingg plans to go this route to ensure that funds can freely flow to reach as many areas as they can.
- OPay, another super app market leader in Nigeria is also continuously improving its features and offerings to be able to push its market influence across Africa.
- Expanding the market space within the super app segment can help a player have more capacity to expand and keep its status as the biggest fish in the ever-expanding pond.
Have More Connected and Exclusive Solutions
- Super apps can also be competitive by following Tingg's path of offering its service in various platforms such as "mobile app, web, POS" or by transacting directly with a Tingg banking agent to complete "P2P money transfers, group payments, investments, and lending." Consumers can also connnect "mobile money, debit/credit cards, and banks" to the app from their smartphones.
- Super apps also need to achieve the vision of making their platforms more streamlined where digital transactions can flow smoothly. Super apps in Africa will need to be "simplified, personalized, and should have a one-stop-shop feature."
- In emerging economies such as Africa, super apps need to provide the "utility of thousands of apps" with minimal storage cost as consumers in this region typically only have lower-end smartphones that have minimal storage.
- Furthermore, a single but fully-loaded super app can save the users some time and effort. These fully-packed super apps can also help in flattening the learning curve, which is usually steep when trying to understand multiple apps.
- A super app player can then keep its market lead by increasing the consumers' dependency on its wide array of connected and ever-expanding exclusive solutions.
Changing the Rules of The Game
- As there are many big players in the super app space in Africa, leaders can break away from the pack and establish their lead by positioning themselves as the preferred super app provider early on. This way, they are well-placed to change the rules of the game in the space.
- Some of the emerging super app players in Africa that are working hard to take the market lead include MTN, Discovery, FNB, and Jumia.
- Jumia in particular is striving to address monetization challenges by offering its "one-stop mobile platform" for various services.
- Jumia is actually the first super app in Nigeria. It changed the game in the market by offering its super app that offers various integrated service capabilities that let its users pay for cable TV subscription, book hotels and flights, purchase and send airtime, pay for internet subscriptions, pay for utilities, purchase public transportation tickets or rides, pay for sports bets, and order for food over the internet. The super app is now allowing users to take out digital loans.
- OPay, one of the leading supper app players in Nigeria came later and was credited as the one who popularized the super app term in this market. It also made the term part of the everyday jargon in the area.
Barriers to Entry
- Based on the failure of WeChat super app to fully penetrate the African market, one barrier to entry is the elevated cost of acquiring users.
- Furthermore, the region's users were not yet ready for the full-suite of WeChat's functionalities, especially its non-messaging suites.
- For the Carry1st super app, its plan to conquer the African region is to sharpen first its expertise in Nigeria as it is the most challenging market.
- Carry1st also mentioned some of the operational problems that it encountered when trying to enter the market. These include expensive data plans and the unreliability and the fragmented characteristics of online payments and distribution channels in the area. As such, operating in this county will entail customized strategies.
- Based also on the statements of a founder, entering the African market is challenging as startups need to somehow build a "startup multinational corporation." There has to be funding from the "West or East," recommendations from around the world, and talent from various locations.
Global Super Apps Trends
More Fully-loaded Super Apps
- Based on the predictions of a Bond Capital founder and former Kleiner Perkins general partner, super apps around the world will continue to include more functionalities or mini-apps in the future.
- These trends are also discussed by industry leaders during the 2019 Fortune Brainstorm Tech Conference.
- Some super apps in China have already included never-before added functionalities into their features.
- Some newer additions include restaurant reviews, home rental reservations, and others.
- For the Alipay super app, it has now expanded its features from just being a payments app when it started.
- The app now includes various mini-apps that let users perform transactions in the following areas: "healthcare, investments, invoices, car payments, and insurance."
- This trend of fully loading an app will continue to be seen in the future in other regions outside of China.
- Several apps such as Grab, Rappi, and Uber have already been continuously integrating other functionalities such as e-bikes booking, promotions search, and others.
- More functionalities are expected to be available in the future.
Lessened Interaction Between Financial Institutions and Customers
- In the future, industry leaders are seeing that super apps will be instrumental in decreasing the interaction between traditional financial institutions and their customers.
- Currently, financial transactions such as banking and investments are being handled by financial institutions.
- In the future, super apps such as WeChat and Alipay might eventually dislodge this layer.
- With the increasing functionalities offered by super apps, financial institutions might find themselves performing only certain regulatory roles in the future.
Everything will Evolve into a Super App
- Based on an industry leader's presentation during the a16z Summit, businesses will continue to collaborate with each other to provide more functionalities.
- These synergies will turn everything into a super app.