The Colombian delivery app, Rappi, is making it to the headlines for one or the other reasons. Whether it is about raising $1Billion funding from SoftBank or about increasing their footprint to 2X by year end, this on-demand delivery platform is setting an example for new age entrepreneurs.
Before we discuss further on Rappi’s and what made them successful, let’s have a quick glance at their offerings and achievements.
Undoubtedly, Rappi has taken over the Latin America by a storm. It is very common sight to spot their biker gangs swarming over the area, delivering almost everything to the customer’s doorstep. From delivering fresh and delicious food to booking concert tickets, it serves to be Latin America’s everything store.
It is turning omnipresent, and this has raised the interest of budding entrepreneurs in on-demand startups. Also this makes vital to shed some light on the question,
Why On-Demand Delivery Startups Are Gaining Popularity In Latin America?
If you are wondering why their delivery apps are raising fundings and fame, the answer is due to the present market conditions. Let’s have a sneak peak on the factors contributing to the rise of delivery apps:
Being one of the most unequal regions in the world, Latin America, has an economic class system where a small section (constituting upper and middle economic echelon) is served by the lower echelon masses. And this economic model makes huge space for the on-demand services. While the class being served is comfortable paying others service providers, the servers are happy to maintain a living doing so.
Another reason behind the phenomenal growth of such delivery app platforms is the inundation of migrants moving throughout the region. As per the reports, around 2.3 million people have fled from Venezuela to Colombia, Ecuador, Brazil, and Peru. And this has led to a group of people, looking for any kind of job. In such a scenario, such delivery app companies serve to be a pretty good option. On the contrary, on-demand platforms like Rappi benefit from the availability of abundance of service providers, ready to serve their customer base.
The poor traffic conditions and lack of public transport infrastructure adds another reason to the list. Bicycles and motorbikes turn out to be most efficient and quick modes of transportation due to congestion. However, this has benefitted the delivery companies significantly. As Rappi’s fleet is fully two-wheeled, they are able to deliver orders speedily and in a cost-effective manner. Simply, two-wheeled modes of transportation cut downs on the operational costs, which is definitely more in places where there is car-based deliveries (like the U.S.).
Do you know Latin America is the world’s second fastest-growing market for mobile subscribers? It goes without saying that mobile evolution has made apps like Rappi win over customer’s heart. Such on-demand delivery platforms leverage from technology, giving users total visibility and traceability of what they order or book. Being highly reliable, these apps are greatly trusted and referred by the users.
So, it is the combination of the region’s income inequality, adoption of mobile technology, a healthy supply and demand for on-demand services, which make apps like Rappi popular.
But that’s not all you need to make a startup idea successful, isn’t it? Same is the case with this Colombian delivery app. There are many reasons which altogether are responsible for the exponential growth of their business.
What Are The Reasons Behind the Success Of Rappi?
Advance Tech-Suite To Start & Scale An On-Demand Delivery App
Need of a comprehensive technology stack is indispensable for growth of any delivery business. It is the reliable and robust suite which makes ordering simple, delivery on-time, and management easy as cake. Firstly, checkout the working of the Rappi:
To run their online delivery business efficiently, Rappi has a tech-suite which comprises of:
- Customer app: It simplifies the process of ordering for their customers.
- Driver app: This serves to be highly useful tool for the agents to ensure on-time deliveries.
- Merchant panel: Designed for the store owners, it helps managing orders & their business.
- Admin panel: A feature-rich, one-stop place to control, manage, and track every business activity
Each of these modules holds its own significance. Plus, these are feature-enriched to deliver excellent results.
Customer-centric Marketing Strategies To Drive Long-Term Value
It isn’t just about the technology which makes Rappi a huge success. Marketing its offerings to the right people and at the right time, helps this on-demand delivery app stand out. With a laser-like focus on the user experience, there are multiple advertising campaigns have worked miraculously for them.
“We always listen to the user and we adapt to the needs of the market. We are service-based, not technology-based.”
~Director of Marketing, Rappi
- Experimentation is the key:They have been constantly working on how to boost communicate with their users. The experimenting and risk-taking endeavors helped them gain new customers and retain the old ones.
- Add-ons & Offerings: Time to time discounts, offers, loyalty points, and a lot more added to increase in number of orders and customers. Similar to Amazon Prime, Rappi introduced “Prime” customer loyalty service. And the results were astounding- 45% increase in spending by the Prime members.
- Regional Targeting: The diversity of cultures and customers in Latin American markets was a big challenge. What works in one area might not work in another. Operating in different countries, the best approach taken by Rappi is to focus on the region-specific language and terminology.
- User Segmentation: For every business, it is essential to understand that every user is different. Rappie conducted segmentation of users on the basis of region, age, device they use, etc. followed by its usage for marketing purpose. While it helped them boost engagement drastically, it further improved sales and revenue manifolds
Using Intelligent Insights To Optimize And Improve Customer Experience
In order to succeed, it is important to take quick and informed decisions. It is here when a startup needs comprehensive analytic report. And Rappi too utilized data driven insights to understand how their product experience impacted their unique user segments. Drilling deep into their conversion metrics assisted them understanding what types of users were converting through critical funnels and why.
- Improved number of conversions: With the help of intelligent insights, they could optimize their strategies for better ROI. For instance, they could programmatically pulls cohorts of new users on an hourly basis. Further, segmenting them based on different factors helped them defining the first-time user experience. Later, the data was used to create customized campaigns which increased conversion rate significantly.
- Increased retention rate: Rappi wanted to increase the number of users who place a specific number of orders. For this, they used Cohorts, Funnels,AB Test View, and Retention analyses to track the impact of the different experiments they conducted. And this helped them increasing number of purchasers.
Besides, the actionable insights were useful in real-time targeting, which drove a +10% increase in the number of users. Also it resulted in a 30% decrease in their cost of acquisition.
Expansion Adds The Potential To Grow
The expansion of business is something all good entrepreneurs aspire to. Rappi shares a similar story. Currently, this on-demand delivery app offers more than 50,000 products and services. It is now operating in seven Latin American countries, with more than 1, 500 employees. However, in the beginning, it was just a grocery and food delivery app.
Over the last four years this startup has created a whole ecosystem and now it deliver almost everything. Rappi is planning to almost double its reach across South America.
“We’re close to 55 cities now, eight countries and we plan to accelerate that.”
~Sebastian Mejia, Rappi Co-founder & President
There’s A Lot To Learn From Rappi
Today Rappi stands next to globally recognized models like UberEats. From choosing the right technology partner to investing in the right type of marketing strategies, and analysing them for better business decisions, there is a lot involved in the success journey of Rappi. Throughout their journey so far, they have seen their fair share of startups. However, the triumph of this on-demand delivery app inspires entrepreneurs to transform their ideas into reality.
What are your thoughts on the on-demand delivery business model? Are you planning for a Rappi like startup? Now is the perfect time to start. Take the best decision by choosing us as your technology partner. Empowering more than 3K+ businesses so far, Code Brew has the right blend of expertise and experience to help you create the next successful delivery app in Latin America.
Get in touch with us to discuss your idea now.