Middle East And Africa Is A Fertile Ground For The Growth Of Super-Apps

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.

‘From online bazaar to one-stop-shop: The rise of super-apps in the Middle East and Africa’, examines how population growth, digital access, connectivity, a diverse demographic, increasing trust, and affordability is contributing to the rapid progress of super-apps in the region.

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.

“With the Middle East and Africa region projected to become the most populous area in the world, with a forecast population of 3.4 billion by 2050, this expanded market presents a wealth of customer data, which regional players could leverage to add value for all stakeholders,” said Ngozi Megwa, Senior Vice President, Digital Partnerships, Middle East and Africa. 

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.

Findings

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 offers an all-in-one platform that requires less bandwidth and data to operate.

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 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.

“Our study clearly reflects that the development and future trajectory of super-apps is highly contextual to the geography and location in which they develop. Some of the ripe sectors in MEA that could throw up players to become super-apps are insurance across the GCC, the second-hand car market, online property brokers in the UAE, and digital remittances across Sub-Saharan Africa,” said Walter Pasquarelli, Research Manager, Tech & Society, Economist Impact.