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SIMON BROWN: I’m chatting now with André de Wet. He is CEO and co-founder of Flood. André, appreciate the early morning. In a recent note you put out you talk around super apps, and I want to get to those in a second. But the number that absolutely hit me was e-commerce surging from 1% to almost 10% of all retail sales over the last five years. The pandemic obviously helped to a degree, but that is a staggering increase over what is frankly a relatively short period of time and must be getting us close to the sort of numbers we’re seeing in developed-market economies.
ANDRÉ DE WET: Simon, morning and morning to your listeners. Yes, it’s quite amazing what’s happening in the take-up of the digital space, in the digital world. The e-commerce number is quite substantial, how it’s going, starting to take a look at double-digit numbers, yes.
SIMON BROWN: The point – and you make this quite clearly – is we still operate in in silos. Every transaction on my phone is in a different app, is a different sort of process, a different login user experience, etc. And what you’re looking at, at Flood, is saying this isn’t the future. The future is going to be super apps.
ANDRÉ DE WET: Simon, the future is both super apps and trust for bringing it all into one. In an emerging market big things that you need are distribution and trust.
Trust is probably the big thing, because if you’re going to go out to the market and try to get people to download ten apps, they’re not going to do that because you’ve got to re-educate for every single one of those apps. But they trust the bank and they trust the telco app and will start to use the apps themselves. We believe there’s a massive opportunity also in the offline market to be able to digitise or make the offline market digitally discoverable.
If people are going in the e-commerce direction, let’s get everybody in that arena.
SIMON BROWN: I get your point. Super apps – the best known is Grab in Southeast Asia. We’ve got WeChat in China. I’ve seen the WeChat experience out of China. I can do everything in there. I can order the equivalent of an Uber ride or food, I can get a hair appointment, I can pay bills, I can chat to friends. It really is everything in just that one single app. And, to your point, once I’ve trusted the app, it makes it frictionless and so much easier.
ANDRÉ DE WET: I can keep all my stuff together – where my banking is done, my payment is done and my loyalty itself. They are tracked in one space. It makes all the sense in the world.
SIMON BROWN: Security then is an issue. But I’m assuming that as a planet we’ve kind of solved the security issue in mobiles and apps, I imagine.
ANDRÉ DE WET: Yes. I think from that argument there are always the ups and the downs and there’s always going to be somebody who is going to send a phishing email. In the bigger-picture scheme of things the security issue has been sorted out. The regulator and the payment platforms themselves make sure – they’ve had too much fraud on that platform. So I wouldn’t give that too much of a thought.
SIMON BROWN: The risk is the external – as you say, a phishing email. It’s not an internal issue to the apps.
Within South Africa and, I imagine, growing across the continent, we’re actually well positioned for something like this because we have that very, very high mobile penetration across markets.
ANDRÉ DE WET: Exactly. The whole thinking around this is that you’ve got it – and people have their mobile in their hands every single day, taking a look at it, using it and capitalising on that. In one of the territories that we work in, we went from people using an app three times a month to 27 times a month. That’s the user engagement that you’re looking for.
SIMON BROWN: Is it fit for purpose? I imagine it’s not a necessarily a super app for Africa. It would be perhaps more regionalised, more localised in various instances.
ANDRÉ DE WET: Yes. Simon, I’m building iflix across Africa. They said let’s do the same marketing campaign in Nigeria and in Kenya. I was like, guys, there’s 54 countries in this in Africa, and this is a crucially important thing. It always is. There are 54 countries on this continent and they’re all different and think differently. And so a super app for Africa? We take a look at moving money and stablecoin and things like that.
So remittance potentially. But other than that every single country or every single territory has its own identity and its own solutions.
SIMON BROWN: A great point. Maybe remittance is the sort of one exception. I imagine how it’s working is that you’re bringing in the experts. Let’s take Ride-hailing as an example; the app is not the Ride-hailing infrastructure; the app just facilitates that. You get the expert Ride-hailer and integrate that into the app. So it is just the experts in their different verticals.
ANDRÉ DE WET: I think you’re right on the money that the whole basis is to create a platform for a third party, some apps or platforms or solutions to be able to work on it. If I could build a platform on a telco, if a telco has a 20/30 million audience already, and I don’t have to redownload the app, that in itself is an expensive exercise.
Build the platform where everybody externally in geolocated areas can start loading up their stuff or their product, and suddenly you start to get engagement on a daily basis where people live.
SIMON BROWN: I get you. You mentioned seeing a significant increase in terms of usage. You’ve obviously got lots of experience around this. Are you seeing – I’m thinking positive results, particularly from the business. And I’m thinking for a small business as well it’s a great opportunity. I mentioned a hairdresser who otherwise wouldn’t normally be there. Do you see them getting better business, new customers, growing the business as they interact? I would imagine this is a huge opportunity for small, medium and micro [businesses].
ANDRÉ DE WET: Massively so, Simon. The beauty about this is it’s geolocated. It’s like a megaphone for a small business because suddenly you can send a message – but just to people in his vicinity. So everybody within a 500-metre radius on that specific app gets a message saying: ‘The bread has just come out the oven. It’s fresh and available. Come and get it now.’ Or ‘The shoes that we ordered from Asia have arrived. Come and get your shoes that you ordered last week.’ That in itself creates massive traction. The whole basic idea is to get traffic in store.
SIMON BROWN: The regulatory environment? The key point there would be sort of the financial regulatory environment. That is mostly solved, I would think. Certainly we have this happening. We’ve the guidelines, so that’s not necessarily a challenge.
ANDRÉ DE WET: Exactly, Simon. It’s like the security thing being the regulatory environment. African governments are very much on top of regulatory stuff for money, money sending and AML [anti-money laundering] and all of that, or everything else that goes with it is pretty sortable. We don’t try to rewrite what the payment processes are doing. They’ve got that. They follow the rules and we make sure that they stick to them.
SIMON BROWN: Yes. We’ll leave it there. André dew Wet, CEO and co-founder of Flood, I appreciate the early morning time.
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