The age of the super app in the Middle East
Before the arrival of smartphones and the slew of mobile applications they offered, the internet was dominated by a handful of web portals that offered their users several services on one platform. The homepages of Yahoo, MSN and AOL were “one stop shops” for news, search, email and instant messenger and were usually the first service that users clicked once the dial up connection had succeeded.
Now, with half of the world’s population connected to the internet according to Internet World Stats, the majority of people who experience connectivity for the first time, are doing so on mobile devices. They also tend to be from emerging markets, which have managed to leapfrog the legacy systems prevalent elsewhere in the world. What has emerged as a result are super apps, an evolution of the web portals of 1990s, a platform offering users several products and services on one mobile app.
What’s in a name
The term super app is most readily applied to the Chinese tech giants – WeChat and Alipay. These are platforms where the internet essentially takes place. Its users communicate on the platform, consume content, order their groceries and dinners as well as apply for mortgages and transfer money to peers.
It is a way of providing an ecosystem within the internet that offers a variety of services, that work seamlessly together to offer convenience to its users with a single log-in and profile.
Taking inspiration from these Chinese players is the Middle East-based Careem, the ride-hailing app founded in the UAE which was acquired by Uber for $3.1 billion in 2019. The company, which operates in 14 markets across the Middle East and Pakistan already offers ride-hailing, food delivery and bicycle hire on its platform.
“Super apps are what portals were to browsers. We’re evolving that model to make it simple for users to experience a native mobile experience that allows them to see everything in one place,” said Wael Nafee, head of platform domain at Careem.
There are no official criteria for the number of services that need to exist on a platform to qualify it as a super app, but more often than not, they tend to be underpinned by social networking, logistics and payments. Once an app has enough traction and services, its next step is to include third party services onto its platform, bringing them into its own ecosystem.
“We have been experimenting with different super app approaches – we’re seeing a lot of uptake from our users, to allow all the services in one place – we’re embracing all the feedback and going turbo on this because users are telling us this is the way forward,” says Nafee.
Careem is hoping to launch its super app in April this year, with more services like utility payments and bringing in other third-party providers who can operate via its mobile wallet. Ding, the world’s largest mobile top-up company is one of these partners, offering mobile recharge transfer to Careem users.
Cash remains king
But one hurdle Careem faces is the prevalence of cash in the 14 markets in which it operates. According to the World Bank, just 8 per cent of adults across the Middle East and North Africa (Mena) have a bank account. In the UAE, 80 per cent of the population is outside the current financial system due to a lack of suitable bank accounts and credit card options.
“Users use cash not because they prefer to, but because banking in general and access to digital wallets is not something that is easily accessible to them,” says Nafee.
But, whenever money moves digitally, it requires regulatory approval – something that is often a challenge in the Mena region.
“We’re working with the central banks to get the right regulations in place,” says Nafee. “Allowing people to top up their wallet with Careem and send money super easily will help people shift from completely cash-based to digital cash.”
There are already shifts in behavior according to Nafee. Careem’s customers in Egypt for example will request that the change from a cash payment be put on their mobile wallet balance, to be used for another trip.
“That behaviour we’re seeing in all markets, the reason people are using cash is because there isn’t a seamless wallet available,” says Nafee.
Careem is hoping that its “closed-loop peer-to-peer” wallet, Careem PAY, will eventually become the preferred digital wallet in the region. Already, Careem PAY is the most downloaded wallet in the Middle East and one in three rides booked by Careem customers is paid for via this digital wallet.
If the company manages to secure the regulatory approvals to operate as an “open-loop” wallet, it will become one of the biggest financial inclusion players in the region. The mobile top up that Ding users transfer to their loved ones in another country could then be transferred to the Careem PAY wallet which could then be used to pay utility bills or buy goods online, all without the need for a bank account or credit card.