From ride-hailing services to grocery delivery, and financial services such as buy-now-pay-later to microfinancing, super-apps development in the Middle East and Africa is emerging fast as the region proves to be a potentially fertile ground for its growth.
In a study commissioned by Mastercard Middle East and Africa (MEA) and carried out by Economist Impact titled ‘From online bazaar to one stop shop: The rise of super-apps in the Middle East and Africa’, population growth, digital access, connectivity, a diverse demographic, increasing trust, and affordability is contributing to the rapid progress of super-apps in the region.
The paper enables readers to better understand the rise of super-apps, how they are proliferating across the MEA region, and what enables and impedes their expansion. From consumer norms to policy, the wide-ranging study draws on a comprehensive interview program with subject-matter experts and regional stakeholders*.
The study also draws parallels between the ecosystems that drove the rapid rise of super-apps such as WeChat, Meituan or AliPay in China a decade ago to the Middle East and Africa region currently where the super-app model is showing early promise. Emerging players are seeking to emulate the Chinese-born concept and create regional success stories of their own.
While multi-function apps have been popular in Asia for some time, cut-through elsewhere in the world has been slower. Consumers in western and MEA markets have largely messaged, hailed taxis, summoned food and paid for things with different apps. But more recently firms including Spotify, Uber and Revolut have raced to bundle ever more features into their apps.
While delving into the MEA region, the study found specific highlights that will enable the rapid growth of super-apps. Key findings include:
- Locally active super-apps are proliferating across the MEA region, but larger cross-regional players remain few.
- Firms such as Uber have emerged as local champions, expanding from ride hailing to restaurant delivery. MTN has introduced person-to-person mobile money payments on its Ayoba app. The acquisition sums for regional apps – from US$500 million (iFood) to over US$3 billion (Careem), all suggest a valuable market.
- The prevalence of low-end mobile phones, as well as high internet costs in the MEA, make super-apps an attractive product.
- MEA has historically been the region with the lowest levels of connectivity as well as high fixed-line broadband costs. Mobile operators have provided the region with affordable low-end smartphones. In many countries the advent of cheap smartphones has allowed populations to leapfrog desktop technology and adopt mobile apps as their first digital device. Super-apps offer an all-in-one platform that requires less bandwidth and data to operate.
- Super-apps can be drivers for financial inclusion in the MEA.
- For people living in remote parts of MEA with poor technological infrastructure, this offers an opportunity for greater digital inclusion. Furthermore, in remote areas where a lack of traditional bank branches has contributed to scant financial service provision, super-apps enable previously unbanked people to do financial transactions and become part of a wider financial ecosystem.
- The harmonization of national policies remains the biggest challenge to the scaling-up of super-app presence in the MEA region.
- The MEA region consists of more than 60 countries with over 1,000 languages and divergent economic, policy and cultural environments. Although the African Union and Gulf Cooperation Council are fostering the harmonization of industrial and data policies, for super-apps seeking to further their reach, the current fragmentation presents a significant operational, legal and financial burden.
The report also threw the spotlight on governments’ role. As the biggest spenders in the region, government choices over which direction to orient industrial and data policies will be key. Beyond the policies of individual governments, the harmonization of policies across the region is expected be the core strategic choice that will determine the future of super-apps.