How Africa's super app landscape is evolving

Super apps are trending across the continent; here's a primer on who, what, where, and why.

Afridigest provides ideas & analysis for startup founders, operators, and investors across Africa and beyond. 
This is the third in an ongoing series about super apps. It explores the rise of super apps in Africa, the key players, & the drivers behind this trend.

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The ongoing African super app trend

Super apps are having a moment in Africa.

What are super apps? Digital platforms that leverage a business’ core assets across multiple use cases or service verticals. 

(For a brief history of the term “super app,” along with alternative definitions, see the section ‘Defining super app’ in 'Why super apps are proliferating across emerging markets')

Just last month, Kenya’s Safaricom, the country’s leading telco, launched the M-Pesa super app. Not to be outdone, South Africa’s leading telco Vodacom, re-announced ‘the arrival’ of its own VodaPay super app, developed in partnership with China’s Alipay. And earlier in June, Nigerian mobility platform Gokada launched its new super app experience.

Clearly, African super apps are trending. So what’s going on?

In Tech in Africa,’ authors Gabriele et al. provide some ecosystem-level context. They describe this pan-African pursuit of the super app model as the second of three major waves that characterize the African tech ecosystem to date:

“The second wave [sees] entrepreneurs draw inspiration from Asia. Winning [Asian] startups…[have] succeeded despite inadequate infrastructure and lower discretionary income levels—challenges that African companies [face]. Many flourished by providing a high-frequency product and then layering on higher-value services … This super-app playbook is the same one that propelled Gojek, Grab, and many others into the limelight.”

For more detail on the Grab & Gojek playbook, see 'Super apps in emerging markets: The Grab & Gojek playbook'

According to Gabriele et al., this super app second wave is sandwiched firmly between the first wave, Africa’s e-commerce gold rush; and the third wave, its fintech gold rush.

If Jumia and Konga are emblematic of the first wave (e-commerce) and African unicorns Flutterwave & Chipper Cash are among those leading the third wave (fintech), it begs the question: which companies spearhead the second wave?

Africa’s super apps: archetypes & players

It turns out there are four main archetypes of super apps in Africa (at least so far):

  • Mobility-driven

  • Financial Services-driven

  • Telco-driven

  • Chinese-driven

Mobility-driven super apps generally provide ride-hailing, transportation, or logistics offerings and employ the Grab & Gojek playbook with a fleet of drivers as their core super app asset. In other words, they generally start with a transportation/logistics service then offer adjacent services to increase driver engagement & utilization. Examples include Gozem, Careem, Halan, Gokada, Temtem, SafeBoda, and Yassir.

  • Gozem, operational in Francophone West and Central Africa, launched its super app experience in August 2020.

  • Dubai-headquartered Careem, an Uber subsidiary since the $3.1 billion acquisition in January 2020, launched its super app experience in June 2020 — it’s operational in Egypt, Morocco, and the MENA region.

  • Egypt-based Halan launched its super app experience in October 2020.

  • Nigeria’s Gokada launched its super app experience just last month in June 2021.

  • Algeria’s Temtem launched its super app experience, temtem ONE, in October 2020

  • SafeBoda, operational in Nigeria and Uganda (after a November 2020 Kenya exit), expanded beyond ride-hailing in December 2019.

  • Algeria’s Yassir, the first startup from the country to be accepted into Y Combinator, aspires to become the super app for French-speaking Africa; but it doesn’t seem to have a multi-service super app experience yet — it currently has separate apps for ride-hailing and e-commerce.

Financial Services-driven super apps, on the other hand, are typically spearheaded by financial services institutions or large e-commerce players that have a captive audience for payments. The core assets they leverage across the super app tend to be large pre-existing client bases and pre-existing merchant/SME relationships. Examples include JumiaPay, Habari, Tingg, and Avo. 

Telco-driven super apps are spearheaded by mobile network operators and they leverage MNO strengths—large subscriber bases, troves of data, and a notable degree of influence over local telco ecosystems (e.g., OEM relationships, zero-rating, etc.)—as their core super app assets. Examples include Ayoba, the new M-Pesa app, and VodaPay. (And potentially Orange Bank Africa.)

Chinese-driven super apps are headquartered in China or backed by significant Chinese investment; their core super app assets tend to be capital and/or relevant partnerships & expertise. OPay and PalmPay are the two players here; however both are arguably diversified financial services apps today, rather than true multi-vertical super apps.

Read more about OPay’s history in Blitzscaling in African markets: Opera's OPay optimizes its operations

In addition to the four archetypes above, it’s worth noting that there’s a growing trend on the continent that sees startups aspire to own all the opportunities in a target vertical and position themselves as ‘super apps for X.’ Nigeria’s Eden Life, for example, has positioned itself as a “super app for domestic services,” Cameroon’s Healthlane as a “super app for anyone across the continent to access healthcare,” and Ivory Coast’s Djamo as a “financial super app.”

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What’s driving the continent’s super app trend

“Push strategies are driven by the priorities of their originators and generate solutions that are imposed on markets and consumers. Pull strategies respond to needs represented in the struggles of everyday consumers.”Clayton Christensen et al.

Super apps are increasingly popular across the continent as they’re well suited to the continent’s digital economy. On the one hand, there’s a certain market pull towards super apps from the continent’s bottom-of-the-pyramid users, and at the same time, companies serving these users are increasingly pushed to explore super app-like diversification in search of growth and business sustainability.

Market 'pulls' — why super apps are attractive to African consumers

  • The proliferation of cheaper, lower-end phones with limited storage

    According to IDC data, low-end and ultra-low-end smartphones comprised 85% of smartphones shipments on the continent in Q1. These smartphones tend to have limited storage capacity, thus capping the number of apps, files, photos, etc. that users can carry at once. This creates a pull towards multi-service super apps as they enable users to avoid the painful decision of what content to delete in order to download a new app.

  • High relative data costs

    According to the Alliance for Affordable Internet, across Africa, the average cost for 1GB of internet data is 7.1% of the average monthly salary, compared to 1.9% in the Americas and 2.7% in Asia. This again creates a pull towards multi-service super apps as they enable users to avoid not just the emotional costs involved in downloading multiple apps on lower-end smartphones, but the financial costs as well.

  • Nascent internet economy

    Although there are regional differences internally, the African continent as a whole is home to the world’s lowest internet penetration rate. Many users are coming online for the first time and there can often be steep learning curves for users as they engage with various service providers. Super apps, on the other hand, simplify the new internet world, enabling users to access a wide variety of services within a single interface and offering improved user experiences thanks to unified identity, payments, & more within the super app ecosystem.

Super apps respond uniquely to the needs and pain points of African consumers today and thus the market pulls towards them. Not only do they lubricate or minimize the frictions everyday consumers on the continent face, they also offer uniquely high 'bang for your buck' experiences to a highly value-conscious clientele.

“…[B]uilding super apps has become more necessity than vanity.”Yinka Adegoke, Editor for Strategic Initiatives, Rest of World (& previously founding Editor of Quartz Africa)

Market 'pushes' — why super apps are attractive to companies operating in Africa

  • Ecosystem dynamics: nascency of the digital economy in a mobile-first / mobile-only market

    Unlike in other more developed parts of the world, African markets offer companies a unique opportunity to influence and shape the emerging internet consumer. And since, for many across the continent, the internet is mobile-only, the market effectively pushes firms to experiment and seek to establish dominant positions via innovative mobile-first models; super apps are a prime candidate.

  • Market fragmentation

    I think what companies underestimate is the risk-adjusted cost of expanding from one end of the continent to the other. … The idea of having to go across the continent and do it successfully is nontrivial. … This is one of the biggest issues that companies face trying to expand beyond a certain size.” — Victor Basta, Managing Partner - Magister Advisors

    One of the defining aspects of African markets today is fragmentation. Indeed, the varying regulatory, cultural, and business environments from one country to the next create real risks and obstacles for companies seeking to scale. And where the attractiveness or viability of regional expansion is diminished, growth-seeking firms are propelled to explore other avenues like product/service diversification. (See also, How African startups should think about growth)

  • Clean playing field

    In developed markets, there seem to be at least a handful of significant competitors in every segment. Across Africa however, partly due to the level of fragmentation on the continent, there’s a lot of room for new entrants across verticals; this encourages companies to explore new non-core opportunities without fear of provoking an entrenched player.

  • Economics & Efficiencies

    ARPUs, average revenues per user, on the continent are much smaller than in other regions. For example, Facebook earned almost 20x more per user in the US & Canada than in Africa in Q4. Such an environment incentivizes firms to maximize their existing customer bases & internal advantages and spread costs. The typical super app playbook of starting with high-frequency low-margin services then using a key asset (e.g., a transport fleet) to cross-sell lower-frequency, higher-margin offers is well suited to this.

Given market dynamics, super apps are a sensible response on the part of digital businesses operating in the African context. They hold the potential for businesses to unlock and maintain sustainable growth via various monetization & efficiency benefits, and the playing field is wide open for experimentation with the model.

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