The Growth Story of Central America’s First Super App
In less than a year OMNi is already the most-downloaded app in Costa Rica. As it expands its services and spreads through the region it will create opportunities for investors…
If you mention OMNi in Costa Rica you can expect lots of different reactions. Some might think that you’re talking about the bike hire firm, while others mention the taxi hailing or perhaps the new fintech. OMNi, is all of those things and more. A new ‘super app’ that is based on the emerging Asian trend of bundling together various services on one digital platform, OMNi, has taken Costa Rica by storm. Since being launched last year it has already become the country’s most-popular app, with more than half a million downloads in a population of 5 million people.
Consumers love OMNi because it’s an easy, safe way to use a wide range of different services. But sometimes that service ecosystem confuses investors. They wonder why one app is offering so many things and worry that it will all distract from OMNi’s core business – fintech. In fact, the opposite is true, as we reveal below.
Attracting customers
When OMNi arrived in Central America in October 2019 not many people outside of Asia knew what a super app was. So, the firm decided to start in Costa Rica with the region’s first urban bike rental scheme. It was the perfect solution for Costa Ricans looking to avoid the congested traffic in capital city San José. That’s reflected in the usage numbers, with 1,000 bikes now being cycled almost three times a day with an average ride time of 35 minutes. But it was also the ideal way to introduce OMNi to ticos, as people from Costa Rica are affectionately known. Because the bikes are highly-visible, with obvious environmental and health benefits, they act as ambassadors for OMNi, helping people to become familiar with the app. That was a crucial stepping stone for future stages, when OMNi began offering more sophisticated, less tangible services, such as fintech, that Central Americans are not accustomed to.
In April, the app began offering OMNi Sessions – streaming music and gigs for people stuck at home during the lockdown. It wasn’t a tangible product but it was greatly appreciated by users trapped at home by Covid-19. For most, it was the first time they realised OMNi was more than just a bicycle service.
"When OMNi arrived in Central America in October 2019 not many people outside of Asia knew what a super app was…"
Then in May the most important moment came with the launch of Moni, which is the first neobank solution in Central America. Fintech is OMNi’s core service but it was only released once the app had built up a critical mass of engaged users. Within days it became Costa Rica’s top app. Within months it had captured 5% of the country’s banking population, more than an established fintech like Monzo has in the UK. It continues to grow with 150 debit card requests each day, which is twice the number of traditional banks in the country.
The most recent service to be added to the ecosystem in Costa Rica is OMNi Taxi, an exclusive connectivity platform to a legal ride-sharing hailing app. Despite Covid-19 delays, in October 2020 OMNi taxi launched with 6,000 drivers signing up, giving it 75% of the Costa Rican taxi fleet. Over the course of 2021 more services will be rolled out in Costa Rica. Food delivery, last-mile logistics and health services will all be available to users. Indeed, with new vaccines heralding an end to the pandemic, OMNi will soon bolster its lifestyle offer, which began with OMNi Sessions, and launch QR ticketing for live events. Meanwhile the app will spread to other countries in Central America and the Caribbean, starting with Guatemala and the Dominican Republic, the two largest economies in the region. By 2022 OMNi will be active across eight countries, with a total population of more than 60 million.
Investor returns
The myriad services spread across different countries can confuse investors who are unfamiliar with the super app model. The key element to understand is that all of the distinct services drive usage of OMNi’s core business – fintech.
The first function of additional services, for example the bike rental, is to attract users. So, thanks to the services it has offered so far, OMNi has managed to build up a base of 150,000 active users. Every new product added to the ecosystem brings more people to the app, which increases the size of the potential market to sell services to.
The other purpose of the service ecosystem is to generate spending within the app. That is the revolutionary element of super apps - they are convincing people to convert old fashioned paper currencies into digital money. In Costa Rica users go to any shop that is part of Hey OMNi, a network of more than 15,000 affiliated merchants, and top up their apps with cash. This allows ticos that have been denied access to the traditional banking system to use a cutting-edge fintech. By providing extra services OMNi incentivises people to put more money onto their apps and keep it there. So far OMNi users spend an average of $295 on the application each month. That amount will increase as the service ecosystem grows.
"the revolutionary element of super apps is that they convince people to convert old fashioned paper currencies into digital money…"
There is also a psychological aspect. Offering such a wide range of services allows the app to integrate itself more fully into Central American’s everyday lives than if it was just a simple single-service application like, say, Spotify. That gives you prominence above other applications on a user’s phone. It also gives OMNi an incredible relationship with each customer. People rely on the app for essential activities, such as booking health appointments, getting to work and ordering food, which makes them more disposed to buy new services on the app. Moreover, OMNi gains a wealth of detailed information about its consumers. That’s vital for the core fintech business as it allows OMNi to develop alternative credit rating methods. Millions of Central Americans don’t have the formal paperwork that conventional banks need to make lending decisions. But OMNi will know exactly how much to lend its users as it helps them spend their money every day.
It’s easy to see the advantages of the service ecosystem but that doesn’t make it simple to build. Yet, unlike other forerunners, such as Go-Jek in Indonesia, OMNi is the world’s first purpose-built super app. In technical terms that means OMNi has open data architecture that allows data from different services to flow easily around the app. The core platform was designed to allow an expanding universe of services, which will help OMNi avoid the tech problems that bedevil apps like Uber as they try to offer additional services to customers.
OMNi, means ‘all’ in Latin – an apt name for a super app with such a wide range of services. But with its rapid take-up by Central American consumers it could soon become omnipresent throughout the region.