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Working together across Latin America

Written by:   Juan D'Antiochia, General Manager Latin America,  9 Jan 2019

We’ve been working closely with Viva Aerobus and Rappi, to help them expand into new markets.  We caught up with Juan D’Antiochia, General Manager, LATAM, to understand more about what’s happening across the region, and which merchants are doing exciting things. 

Can you tell us a bit more about how you’ve been working with Rappi and VivaAerobus, and how we can help other businesses looking to do the same?

Yeah, I guess those 2 cases presented the same challenge, but with a completely different dynamic. Viva Aerobus is a low cost carrier. Their challenge was primarily about payment acceptance. They catered to the US and their acceptance in the US was very low, and some routes were not accepting as much as they should or they wanted. So I guess the focus for Viva Aerobus was how to increase those pockets of successfully acquired consumers on a global level.  But it was also about satisfying demand that was already there and was simply not being converted successfully into transactions.

The case of Rappi was very different. They had a problem: a challenge around acceptance. But I guess the complexity around Rappi was that they went from being a relatively small start-up to one of the region’s largest companies in a year or so. They had expanded into a number of different markets, and needed to consolidate that operationally. They had the complexity of being present in 5-6 markets and opening one market every quarter, so it was more about helping them expand in the region and helping them consolidate that operationally. The company was growing so unbelievably fast that it was also about helping them manage that growth.  We supported their expansion into Chile and Argentina; helped streamlined their operations in Colombia, Mexico, and Brazil.  In Brazil, we focused on acquiring in order to increase acceptance.  So the challenge for Rappi was slightly different from market-to-market.

Rappi is an unbelievable story, I mean, the company went from being a start-up to Colombia’s first unicorn in, a year or so. I was with their founder a couple of weeks ago, we were having a chat. He told me that the company has gone from being a start-up, to employing around 3,000 people directly, and I think they employ maybe 20,000 new messengers a week, so that’s how much the company has grown. And they’ve gone from being just a brand you hear about on the street, to part of the landscape. I mean, it’s pretty rare if you don’t see a restaurant at night with a line of Rappi messengers standing outside to take orders away, and the boost that’s brought into the economy is pretty interesting because none of those restaurants were delivering before. We’re not talking about your typical pizza place that will deliver to your house, we’re talking about pretty high-end restaurants, where people would go and dine. And they wouldn’t have considered delivering at first but with a company like Rappi, they started getting access to a new section of the population that they weren’t reaching before, so it is pretty remarkable for Rappi’s customers too.

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Are there any Latin American merchants that you think are doing any really interesting stuff at the moment? Which are they and what are they doing?

Well, I hate to repeat myself but I’m definitely keeping a close eye on Rappi, especially because it is a concept, not a merchant.  And when you realise that, you understand the potential. What Rappi do is deliver things, but what things are, is a pretty broad concept. So, for instance, if you don’t want to go the ATM but you need cash, they will bring cash to you. So it’s not only doing food. Those guys are extremely innovative. And you see that business model growing across the region. You see other companies working in the same space and each one that comes, I guess, will do something different.

The other company I always keep my eye on, especially because they’re a pretty fundamental part of the ecosystem is MercadoLibre and MercadoPago. They are working pretty closely with governments and central banks in the region to disrupt the established solutions in the market. The introduction of the QR code at the point of sale was a pretty significant change. It’s not reinventing the wheel but it’s the same thing that WeChatPay were doing in China.  And the consumer adoption is pretty phenomenal.

If you consider that MercadoLibre, back in the day, used to account for 50% of the ecommerce in the region, almost every consumer that is online has been exposed to them at some point in time. So, for them it’s a recognisable brand, something they may feel comfortable with, and they are innovating in the payments space in a pretty interesting way. Whatever drives automation, whatever drives consumer adoption into epayments is definitely looking good for the ecosystem, and that includes companies like Worldpay.

 

It’s really exciting to see the changes occurring across the region.

 If you’d like to find out more, or talk to our Latin American payment experts, get in touch. 

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When it comes to Rappi, and how they’ve taken the Uber concept and done something crazy with it, and allows, as you say, to bring cash to you – how come we don’t see that in Europe, and what might it take for us to adopt that here?

I guess it’s a number of things. It’s a matter of time, it’s one of those things that you didn’t know you needed until you had it. I mean, bike messengers have been around since the beginning of time, probably since the bike was invented. Except that you would use that for very specific things.  Rappi took that concept and developed it into an app that says, and I quote “Ask me for anything”.

So, you enter the app and you chat with them and the options are pretty much unlimited, it’s as much as you dare to ask for, I guess. I’ll give you an example of how far-fetched that can be. The founder was telling me a few stories about things that were asked for in the app. There were 3 guys who wanted to play a football tournament on the PlayStation. They were missing a fourth player, so they called a Rappi guy to stand in for the fourth player. The other one is, there was a team that was playing in a football final and one of their players got hurt, so they were short by one player. They had 10, they needed 11, so they got a Rappi guy to play as number 11, and the guy played for 90 minutes. Those are the kind of things that Rappi will do for you. So, it’s well beyond the concept of the bike messenger.

You see other companies like Glovo in Spain, for instance, trying to break into the same territory. Actually, Glovo is present in the Latam region as well. I guess there’s space for more than one player. I keep on saying that this is not Uber Eats or Deliveroo – the concept is so much more that. They do so many other things. I would expect them to go into Europe at some point in time and they’re definitely going to outgrow the region. They’re present in 7 or 8 markets already and they haven’t even been around for 24 months or so.

Written by:   Juan D'Antiochia, General Manager Latin America,  9 Jan 2019