Nedbank pushes vehicle sales to grow superapp
• Avo platform will now include an online marketplace
Nedbank is pinning its hopes for the next phase of growth for its superapp on local and international vehicle sales as the banking group gears up to launch an online marketplace for preowned cars.
The success of WeChat in China convinced companies, including Nedbank that launched its superapp Avo in 2020, that new growth areas, such as mobile payments and integration with multiple service providers, is the future.
On Wednesday, the bank said the latest version of its platform will include an online marketplace for vehicles, akin to Cars.co.za, AutoTrader and Wheels24, and will be available to customers outside SA as well.
After going through an initial pilot phase for the service, the bank has decided to double down, now expanding the marketplace in SA and beyond.
“It’s grown fantastically well. We’ve got 140 dealers and about 7,000 cars at any given time that we’re selling on the platform,” said Vishal Maharaj, executive for digital at Nedbank, at a media event in Johannesburg.
Nedbank is also looking to turn SA into a source of secondhand vehicles for the African market. Outside SA, where there are fewer restrictions on the import of vehicles, people in Southern, East and West Africa have typically bought secondhand vehicles in droves from places such as the UK and Japan.
According to SBI Motor Japan, a company specialising in the sale of vehicles from the Asian country to Africa, 340,000 were shipped to the continent in 2018, about three times more than what it shipped in 2007. Drivers for this trend include lower prices, right-hand operation — uncommon in many parts of the Western world — and variety, given manufacturers such as Toyota, Kia, Hyundai and Mazda are based in the region.
“We realised that our fellow African citizens are looking at SA as a great place to shop around for a vehicle,” said Maharaj.
Why SA? “First, it’s cheaper to get a Toyota Prado here [in SA], put it on a train or long haulage, and take it to Tanzania, than it is to just buy it there. Second, our cars are acclimatised. They’re built for our hotter environments in Africa. Third, it’s easier to get parts in SA,” he said.
As the bank gets ready to launch the latest service, it says 150,000 vehicles are already listed on the platform.
It gives Nedbank a chance to grow its vehicles financing unit, MFC, while giving customers another reason to use its platform.
For international clients, Nedbank says sales are, for now, limited to cash deals. Maharaj said that this presents an opportunity for the bank, which is looking for avenues to expand its business on the continent, to offer financing options to customers in the rest of Africa.
A superapp aims to be a onestop shop for the user, with services ranging from connectivity, entertainment, shopping and finance.
FNB has also taken a stab at the e-commerce space with a marketplace that allows businesses to list products and services, with the benefit of the bank’s payment integration.
Superapps are one-stop shops as they consolidate services and ecosystems in one place, says Umar Bagus, partner at management consulting firm McKinsey SA.
“Superapps are inserting themselves between the customer and all these products and services. For banks, this is an opportunity to acquire more clients at a lower acquisition cost, but also to gain better data and understanding of their clients.”
The move is big for Nedbank’s fledgling platform, which has so far also allowed for the buying and selling of goods and services with its payment integration.
As Vodacom’s own superapp reported 2.2-million registered users this week, the bank said that Avo now has 4,000 businesses listed, with 1.2-million customers.
SUPERAPPS ARE ONESTOP SHOPS AS THEY CONSOLIDATE SERVICES AND ECOSYSTEMS