- Super-apps offer a single location from which a consumer can engage in diverse commercial transactions, from calling a cab to paying an electricity bill
- Wide-ranging study by Economist Impact, the research and analysis arm of The Economist Group, commissioned by Mastercard Middle East and Africa reveals that super-apps have emerged as a business model with great potential to dominate the digital services industry
- Super-apps can be drivers for financial inclusion in MEA offering an opportunity for greater digital inclusion
Beirut, Lebanon; 7 December 2021: 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.
In a study commissioned by Mastercard Middle East and Africa (MEA) and carried out by Economist Impact titled ‘From online bazaar to one stop shop: The rise of super-apps in the Middle East and Africa’,the paper 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.
The paper enables readers to better understand the rise of super-apps, how they are proliferating across the MEA region, and what enables and impedes their expansion. From consumer norms to policy, the wide-ranging study draws on a comprehensive interview program with subject-matter experts and regional stakeholders*.
The study also draws parallels between the ecosystems that drove the rapid rise of super-apps such as WeChat, Meituan or AliPay in China a decade ago to the Middle East and Africa region currently where the super-app model is showing early promise. Emerging players are seeking to emulate the Chinese-born concept and create regional success stories of their own.
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. Mastercard, with its digital-first approach, can be that single technology provider of choice to connect diverse players such as telcos, digital e-tailers and fintechs to become super-apps by providing technology solutions, platforms and propositions that enable a superior digital experience and drive greater inclusion for people across MEA,” said Ngozi Megwa, Senior Vice President, Digital Partnerships, Middle East and Africa.
While delving into the MEA region, the study found specific highlights that will enable the rapid growth of super-apps. Key findings include:
- 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.
- The prevalence of low-end mobile phones, as well as high internet costs in the MEA, make super-apps an attractive product.
- 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 offer an all-in-one platform that requires less bandwidth and data to operate.
- Super-apps can be drivers for financial inclusion in the MEA.
- 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 harmonization of national policies remains the biggest challenge to the scaling-up of super-app presence in the MEA region.
- 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 who 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.
The report also threw the spotlight on governments’ role. As the biggest spenders in the region, government choices over which direction to orient industrial and data policies will be key. Beyond the policies of individual governments, the harmonization of policies across the region is expected be the core strategic choice that will determine the future of super-apps.
The rise of super-apps in the Middle East and Africa is a report written by Economist Impact and supported by Mastercard. The report’s findings are rooted in a program of in-depth interviews with experts alongside desk research. The following subject-matter experts were interviewed:
- Adeoye Ojuroye, chief financial officer, Providus Bank
- Philip Johnston, chief financial officer, Opontia
- Sameer Hirjii, executive director, Selcom
- Noha Shaker, secretary general, Egyptian Fintech Association
- Karen S Puah, president, FinTech Association of Malaysia
- Nejoud al Mulaik, director, Fintech Saudi
- Shadab Taiyabi, president, Singapore FinTech Association
- Nameer Khan, founding board member, MENA FinTech Association
- Dr. Armstrong Takang, special adviser (ICT), Minister of Finance in Nigeria
- Miguel Rio Tinto, group CIO and chief digital officer, Emirates NBD
About Mastercard (NYSE: MA), www.mastercard.com Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.
About Economist Impact, www.economistimpact.com , Economist Impact combines the rigour of a think-tank with the creativity of a media brand to engage a globally influential audience. We believe that evidence-based insights can open debate, broaden perspectives and catalyse progress. The services offered by Economist Impact previously existed within The Economist Group as separate entities, including EIU Thought Leadership, EIU Public Policy, EIU Health Policy, Economist Events, EBrandConnect and SignalNoise. We are building on a 75-year track record of analysis across 205 countries. Along with framework design, benchmarking economic and social impact analysis, forecasting and scenario modelling, we bring creative storytelling, events expertise, design-thinking solutions and market-leading media products, making Economist Impact’s offering unique in the marketplace.