Travel and loyalty are good for stickiness: Guido Becher
It’s interesting to note that while some superapps in Asia such as Grab and Gojek have pulled back from travel, Latin America’s Rappi remains committed to the travel vertical despite the challenging pandemic years.
In fact, Rappi couldn’t have picked a worse time to launch its travel vertical in early 2020.
Guido Becher at Phocuswright Europe: “Our idea is to encourage consumers of burgers, sushi and groceries to become Rappi travellers with amazing conversion results, especially big value customers.”
Recalled Guido Becher, head of travel, “We launched the day the pandemic started. Our first push notification was “see around Colombia” and three hours later, our president said we cannot leave home. We sold zero of course.
“The good thing was, the investment in the business was made before Covid and the commitment to travel was maintained. Rappi also did very well with its main business of delivery and the team was motivated to hold onto its bet on travel.”
It’s a bet that’s paying off. Emerging from the pandemic, Rappi Travel has signed two key partnerships – Amadeus and Marriott – that will go a long way towards it building out a travel ecosystem to support Rappi Prime, the superapp’s membership programme, which has four million members.
“Our idea is to encourage consumers of burgers, sushi and groceries to become Rappi travellers with amazing conversion results, especially big value customers,” said Becher.
The key to that is data, which can be used to connect supply partners with the right audience. He cited an example of a hotelier, who runs a yoga retreat, who said he wanted to approach users that buy almond milk in Rappi.
“So we profiled users that basically bought almond milk. Same thing with hotels that are pet-friendly. Where do you find users with pets? Rappi sells dog food, regularly to big user base.”
To optimize its offerings, Rappi is working with Amadeus to better leverage its data to create relevant products and expand connectivity with partners, such as airlines, hotel chains, bedbanks and other travel sellers.
Meanwhile, its partnership with Marriott will give earnings opportunities and enhanced travel offerings for both Marriott Bonvoy members and Rappi users. “Consumers can link their Marriott Bonvoy and Rappi Prime accounts. This means Rappi users can earn points when ordering food delivery from Marriott hotels and restaurants and Bonvoy members can become Prime members too. It proves that travel is an important tool to add value to Prime users.”
The programme will launch in October.
Becher said Rappi Travel has also built loyalty partnerships with airlines such as Avianca and LATAM Airlines has 10 such programmes in place.
“Travel and loyalty are good ways to get stickiness and we are still betting on this blue ocean. We are not a separate OTA, we are part of Rappi.”
Like Grab and Gojek, Rappi is also a heavily-funded company – it has raised a total of $2.3B in funding over 15 rounds.
In Singapore recently, Grab announced it would be laying off 1,000 jobs or 11% of its workforce to manage costs and stay competitive. Its CEO Anthony Tan was quoted as saying that the cuts, the biggest since the start of the pandemic, were not “a shortcut to profitability” but a strategic reorganisation to adapt to the business environment.
With the change in the investment climate, Rappi has also made cuts and has committed to pursuing profitability.
In fact, Becher said Rappi Travel reached profitability in March. “We’ve been told that none of you are special, you need to be profitable.”
It has put on hold tours and activities for now and may revisit it next year. “I love this experiences space, there’s so much room to grow, but people still come to us for flights and we want to focus for now.”
While he said travel in Latin America had largely recovered, it is important to note that two airlines – Viva Air and Ultra Air – went broke. “That’s 30% of the market so we have less supply.”
Becher said it was also exploring partnerships with Asia brands. “The experience in Asia around tech and data, in cross-selling, is incredible. Look at Meituan and how it cross-sells food and hotels. Their scale can bring us some interesting use cases and synergies.”
