November 29, 2021
The Next Wave offers a futuristic analysis of BizTech and innovation in Africa. Subscribe here to get it delivered straight to your inbox on Sunday at 3pm (WAT).
In 2013, a Chinese app, WeChat, entered South Africa to grab a share of Africa’s burgeoning internet market and position itself to become the continent’s leading online messaging service. But it was late for the party; WhatsApp had already started to dominate in the space.
WeChat’s long game in Africa was an effort to make its online messaging service its main asset and its app an integral part of customers’ lives, which would make it easier for WeChat to lock people in by adding new features. other services, such as money transfers. , paying electricity bills, buying airtime, and ride-sharing services on its platform.
In 2015, WhatsApp had 10 million users in South Africa and WeChat had 5 million. Today, WhatsApp has 37 million users and WeChat has left the continent. This close wallet service it was launched in South Africa in 2015, at its height of success two years ago.
In China, the presence of WeChat is another story. The instant messaging app has over 1.2 billion users in the country. How did he achieve this feat? By becoming the world’s first “super app”, an idea other Big Tech companies are now trying to replicate.
Super apps start with a single service (also known as a core asset), then add other services or allow third-party companies to add mini apps at low incremental cost, to fit into the lifestyle of users. users. Super apps rely on a huge user base to generate the data and insights they need to seamlessly integrate with other services. WeChat’s super app ambition took off once it reached 200 million users on its social app.
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Great applications in emerging markets
Over the past decade, super apps have become increasingly popular in Africa, with platforms seeking to attract new Internet users (i.e. people who have never used a PC before or who are used to downloading several applications for various needs) in their super ecosystem of ‘apps. This is the strategy that super apps catch the youngsters are known for.
Super apps are popular among the continent’s poorest as they are well suited to the continent’s digital economy, where low-spending users buy low-end phones and data at relatively high rates. Thus, many app operators are now pushing for the super app model in pursuit of business growth and sustainability.
But super apps on the mainland, like Gozem, M-Pesa, Opay, Gokada and Ayoba, are struggling to scale. Even if they are important in the region or country in which they operate, only a few manage to surpass their region. The reason is that they find it difficult to harmonize the national policies of the 54 countries on the continent, facing legal, operational and financial constraints along the way.
It might not seem like a big deal from afar, but the fact is that a large pool of data that provides information about customer preferences is critical to the success of great apps. And getting this much-needed information in just one country or a few countries can be difficult. For example, despite a constantly growing population, few countries have more than 100 million inhabitants on the continent.
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The ambitions of Big Tech’s super app
Social media apps, including Facebook, Whatsapp, Snapchat, and TikTok, are increasingly looking like more than social apps and are moving into the realm of super apps. Beyond being a communication tool, they help people shop, pay for goods, find places, access news, and keep them entertained as well.
In South America, WhatsApp has added a directory that allows users to find local businesses. In India, WhatsApp is entering a market already dominated by payment companies like PhonePe and Paytm, which have 350 million and 333 million registered users respectively. His peer-to-peer payment functionality, built in partnership with banks, will allow WhatsApp users to send money to each other directly on the app. Although WhatsApp only offers this feature to 20 million users (which should increase as it resolves regulatory constraints), it is more 459 million active users make it a strong competitor in India’s payment industry, which is estimated to be grow to $1 trillion by 2023. WhatsApp is also looking to grant loans users too.
Big social media companies are also jumping on the super app bandwagon. ICT Tac launched an in-app shopping experience in the United States, United Kingdom and Canada, and authorized third-party application developers to create experiences that allow apps to integrate TikTok content into their own experience. Snapchat went a step further by introducing “Minis”, a collection of mini-apps created by companies other than itself, which allow its users to play games together, learn financial advice and book movie tickets.
Big Tech is one of the most used applications on the continent. Data from App Annie, an American app analytics company, shows that in 5 of the African countries surveyed, WhatsApp and Facebook are the most downloaded apps.
Africa has 1.3 billion inhabitants and 594 million of them have access to the Internet, which represents a 43.2% internet penetration rate. Although it is clear that Africa has some catching up to do, its Internet adoption rate between 2000 and 2021 is a massive increase of 13,058%, despite a regional average of 3,500%.
The real reason Big Tech seems to have an advantage over the continent’s super apps is that they can move seamlessly between regions of the continent; harmonizing scale is not an issue as they already have this vast reach across the continent and detailed user data.
Lock raised $709 million to boost its “super app” ambitions, which could see it expand to other countries. By the way, Bolt’s 75 million users are impressive. Russian Yandex’s Yango is set to launch in multiple countries in different regions and promises to be a great cross-regional app.
While Africa may not be economically attractive for Big Tech, in Q4 2020, Facebook generated almost 20 times more revenue from users only in the United States and Canada than users in all of Africa – its population is its greatest asset.
By 2050, a quarter of the planet’s humans will live in Africa, which will drive economic prosperity and growth, especially with a young population hungry for success, innovation and new technologies.
Super apps are important for financial inclusion and digital adoption because they make it easier for people with low to average digital literacy to navigate the complex digital ecosystem. It also holds many promises for the growth of millions of small and medium enterprises on the continent.
Of the Cabal
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Sultan Quadri, Editor, TechCabal.