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Rappi wants to be a ‘super Asian app’ in Latin America

  • Inspired by Asian super apps, such as Tencent’s, Rappi’s new entertainment offer seeks to keep you in the app as long as possible.

If you live in China almost everything you want to do in your day to day you can do it through the screen of your smartphone. Buy the supermarket, pay for your services, communicate, request a transport, see a concert, go to the cinema or play something casual, and all this can be done from the same application, or two at the most. In contrast, if you live in Latin America, chances are you have at least 20 different apps on your phone, according to eMarketer; However, some firms like Rappi seek to change this by becoming “super apps”.

Although Rappi came to the market in 2015, with a limited offer for food delivery or supermarket products, it has added other types of services in recent years. It is currently possible to ask a Rappi delivery man to bring you something you forgot where you are, to walk your dog or to buy clothes and pay for services, and from yesterday, now you can also see live concerts, listen to music in streaming and playing video games.

The similarity of Rappi’s offer to what is now offered by the so-called Asian “super apps” such as We Chat, Ali Pay, Line, Grab or Go-Jek from Indonesia is almost a decal, and it is true, the Colombian unicorn seeks to replicate this model in Latin America supported by an offer of entertainment and transaction services, without leaving the same screen.

“Rappi is building something that goes beyond a single category and there is no direct competitor to this, at least in this part of the world, in the end, it is intuitive to have everything in the same app as the super apps in Asia. Instead of having several watered apps, you find a single ecosystem with the capacity to transact and with the last mile that arrives at the door of your house, “said Sebastian Ruales, director of new business at Rappi, who explained that in technology, I had been developing this entertainment integration project for a year.

Ruales explained that the business model of this new offer of services seeks to feed its same ecosystem of transactions and last-mile deliveries and for which it has consolidated a base of 30 million subscribers in 10 countries.

Although Ruales did not share the percentage of commission with which the signature of each of the live events remains, or live purchases made in the now “super app”, the manager explained that the games part currently works under a partnership scheme with Singapore’s casual gaming provider, Goama, so – for now – it is not open for independent developers to use Rappi as a window.

“The company is based in Singapore and works with companies in Southeast Asia and with them we started to stock up on these games and curate the content we started to have and today we have 150 games and growing (…) The sky is the limit, no we are going to stay with a single business model; we will continue learning and as we grow it is not off the table to look for game developers who can develop for us or have access to other types of companies, ”he said.

Goama operates in 17 countries and generates around two million hours of gaming per week in each of its markets, according to public information from the company.

In the vertical of concerts and live events, Ruales shared that the business works in two ways: The first model is based on sponsorships that brands can make for an event, and in which Rappi charges a fee for the use of its platform, Or if the relationship is direct between the artist or speaker and Rappi, the latter charges a percentage and the rest is for the creator of the experience.

As a measure of success, when looking at the first year of operation, Ruales estimates that one way to measure it would be for this new vertical to generate new users in the base business model that is the transaction for deliveries and sales.

“If we manage to tie entertainment and leisure with conversions and commerce, you have something spectacular because we are going to have the last mile and also entertainment. This we are trying to achieve and it is the path that we are going to seek to follow, ”he said.

Do ‘super apps’ work outside of China?

The consultancy Kagan describes that there are two types of super apps, those that are developing services enabled on a base business, usually a payment platform of their own, or those that allow third parties to develop and integrate them, such as WeChat or Baidu.

Kagan’s report warns that the most important thing about these apps is that they do not depend on a third party to process payments- Rappi has had Rappi Pay since 2018- and due to the Asian context, it has been seen that this type of development works well regionally and when connectivity is not prevalent in the country.

“Super apps have worked in delimited regions of Asia, such as China. India has theirs and Southeast Asia theirs, but they all share some cultural things, “the report quoted.

For its part, KPMG suggests that the next decade will be one of growth for this category with increasingly consolidated applications under the same company, and the challenge is how banks will be able to add value to process their transactions.

“The big question is how banks understand how to give value to their services in a world dominated by super apps,” the consultant quoted.

An example of app consolidation in the western world is the increasingly fragmented services of the big tech companies – mostly banned in China – such as the Facebook app family or the various Google services.

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