Before smartphones and mobile app stores, 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 the primary means by which users accessed the internet.

Increasingly, those who experience the internet for the first time, do so on a mobile device and are more likely to use an app than a browser. And so what has emerged are super apps, an evolution of the web portals of the 1990s, one app where the internet essentially takes place.  

The term super app is most readily applied to the Chinese tech giants – WeChat and Alipay, and Indonesia’s Gojek, platforms on which its users communicate, 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 Asian players is the Middle East-based Careem, the ride-hailing app founded in the UAE and later acquired by Uber for $3.1 billion in 2019. The company this week launched its own super app following a $50 million investment. It now offers its 33 million users in 13 markets across the Middle East and Pakistan a platform from which they can hail a taxi, order food or transfer mobile credit.

“Our super app provides three services – the mobility of people, the mobility of things and the mobility of money,” said Mudassir Sheikha, co-founder and chief executive officer (CEO) at Careem during the launch event. “Our purpose has been to simplify the lives of people…in our region and cities, life is not simple, getting basic things done takes a lot of time, it takes a lot of friction.”

Removing the friction and simplifying daily chores will give people more time to spend “on things that really matter”, according to Sheikha.

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.

Careem is hoping to incorporate additional services like utility payments and onboard offline retailers to become part of the Careem ecosystem, where users can purchase products from these retailers via the mobile wallet, Careem PAY, and have it delivered by its drivers, also known as “captains”.

With this infrastructure in place, anyone looking to sell their goods or services could in theory plug into the Careem ecosystem and become an online player. This has far-reaching implications for the digital economy of the region.

But one hurdle Careem faces is the prevalence of cash in the 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.

“Only 2-3 per cent of spending is currently going through digital platforms, in China or Europe or US, this is easily 20-40 per cent and hundreds of billions of dollars that go through digital platforms,” said Sheikha. “We are in the process of enabling this migration through online commerce.”

Financial Inclusion

While Careem focuses on bringing on board other services and third-party retailers onto its super app, Egypt-based Halan, a ride-hailing startup for tuk-tuks and motorbikes, is taking a slightly different approach, one underpinned by financial inclusion.

Halan’s founder Mounir Nakhla, is incorporating his background in microfinancing (he established Mashroey and Tasaheel, Egypt’s largest microfinance company) into the ride-hailing’s offerings to enable a super app that not only moves people and things, increases access to financial products.  

“There is a strong urge to eliminate cash from society in Egypt, so what I realised is if we direct Halan to be consumer-facing app for Egyptians, to commute, to service through deliveries, to buy, take a loan or transfer funds whether peer-to-peer or to merchants, [Halan] would become the platform for Egyptian consumers,” says Nakhla.

Halan already has a closed-loop wallet, which means the money put into it can be used to pay for services on its platform like bill payments, but unlike an open wallet, this money cannot be cashed out. The company recently received preliminary approval from the Central Bank of Egypt to attain the licence for an open wallet.

Careem meanwhile is pushing its “closed-loop peer-to-peer” wallet and hopes that it will eventually become the preferred digital wallet in the region. According to the company, one in three rides booked by Careem customers is paid for via Careem PAY and cash-paying customers now feel more comfortable receiving their change into the wallet, rather than receiving coins.

Being able to cash out money from an open digital wallet has particular significance in this part of the world, where millions rely on remittances. If a worker in Dubai tops up their Careem or Halan digital wallet and transfers the money to their family in Cairo, an open wallet will allow their family to retrieve it as cash rather than be limited to buy the goods and services only available on the app.  

If Careem manages to secure the regulatory approvals to operate as an open-loop wallet, it will enable the company to become one the biggest financial inclusion players in the region.

A Different Approach

Both Careem and Halan’s super app currently offer a set number of services that relies on their ride-hailing and logistics infrastructure, but one UAE-based startup is hoping to become the super app of the region by offering an unlimited number of services. Yanzo, a Wamda X graduate, is more of a digital personal assistant than an app and can undertake any customer request that comes its way. Crucially, Yanzo does not have its own standalone app, once users set up an account and provide their preferred payment method, all interactions with the company takes place on Whatsapp.

“Yanzo is an operational conversation platform, it’s like talking to someone who knows you and personalises your request based on the learnings and history of your orders,” says Tarek Osman, co-founder and CEO at Yanzo. “Getting everything done is definitely the super power Yanzo has.”

Working with a wide host of partners, including offline retailers, Yanzo’s team undertakes the research required for the customer request, identifies the right supplier and shortlists the options to fulfil an order. So, if a customer wants to host a party, Yanzo will identify all the suppliers that can fulfil the requirements – from hiring furniture, buying balloons and a cake to designing the invites. All this is done via Whatsapp and a third-party delivery company will deliver it all directly to the customer.

“It is personal, it is not a drop-down menu just for fulfilment, the customer journey starts with research to identify and understand what you are looking for to make sure we are getting you the right thing or item. The other super apps do not have this research, they have a list of suppliers and they can’t tell you if they can do something the way you want,” says Osman.

This high level of personalisation has helped Yanzo maintain its customer and user retention rates.

“Super apps provide a list, there is no interaction or humanisation of the process and you have to do your own testing, bidding and research,” says Osman.

Critical to Yanzo’s strategy is the data surrounding user habits and requests. In fact, for all super apps, data is perhaps the most valuable commodity available to them.  

“Investors value technology and ultimately, they value data. The more I get into this field, the more I see consumer data being more valuable than any other type of data,” says Nakhla.

Understanding each individual, their habits, wants and needs and anticipating them before they even act upon them results in better personalisation of services and products that is more likely to result in them clicking “buy”. This however, can leave some consumers uncomfortable.  

“Super apps across the Mena have a huge advantage that can help fuel their growth – little competition and a lack of data privacy laws,” says Tarek Ghobar co-founder of point checkout, a UAE-based online payment gateway that enables consumers to use their loyalty points and air miles to buy goods online. “The lack of data privacy laws gives the super apps a huge advantage to grow and use our data as they wish to target (unfairly) against smaller players, as they will soon have a lot more information to share and sell for more personalised experiences, creating monopolies.”

The only country in Mena with a comprehensive data privacy law is Bahrain, but others like the UAE are considering their own equivalent of the EU’s GDPR law. 

Super Success?

When investors decide where to place their money, they can either go with their gut instincts, conduct market research or look at the potential of the team. But to gauge whether a technology will see success or not, there might be an easier trick – look at the habits of the wealthy.

It is in human nature to want to emulate the lifestyle of the upper echelons of society.  

When the wealthy had their own cars and chauffeurs, technology provided the masses with the same feeling through ride-hailing. When the wealthy enjoyed meals cooked by their private chefs, technology provided world cuisine with a few taps via food delivery. Even services like education, investing and healthcare are being democratised by the internet.

The rich have the means to employ people to do things for them, but the rest of the world can only rely on technology. So while the wealthy might employ a butler or personal assistant, for the masses, super apps are the technological equivalent to conduct chores and simplify daily life.

The premise of simplifying life is an attractive one to users, but a super app will need to provide enough services in order to retain customers. In terms of unit economics however, it will depend on the market and the sector. For Careem, having its captains in Dubai who drive a Lexus deliver packages is far costlier than Halan that does it via motorbike. Delivery is a heavy cost that continues to be subsided by the companies. Careem has even developed a new algorithm to allow its captains to move both goods and people from the same pick up location which will allow them to “earn more money” and eventually offer customers a better price as a result of higher utilisation of its drivers.

“It will make the unit economics for Careem a lot more efficient,” said Sheikha. “We will be improving the engagement of our users by offering them multiple services on the super app and retention rates will go up and we expect that to help our bottom line. We believe this will help us emerge as a more sustainable platform.”

Ultimately, if a super app is to succeed, it needs the regulatory approval to operate across the different sectors that it touches, and it needs to create a user-friendly environment built on trust. That is the only way to retain customers and keep them engaged and spending on the one platform.