The Brazilian-based mobile application and services developer Movile is continuing its push to dominate the Latin American market with the expansion of its on demand delivery and distribution service, Rappido into the Mexican market.
The move follows a merger with Rappido’s Brazilian competitor 99Motos earlier this year and shows how quickly Movile is hoping to consolidate its position in the online, on-demand delivery market in Latin America.
In Mexico, Movile is partnering with the country’s logistics giant, Grupo ampm in a joint venture to launch Rappido MX, the company’s local subsidiary. It’s a similar strategy to the company’s roll-out in other countries in Latin America. Last year, Rappido took a position in the Colombian delivery service Mensajeros Urbanos to gain a foothold in that country’s expanding delivery market.
Movile estimates that the total delivery market for Latin America could be as high as $8 billion this year alone. And there’s no dominant player in the delivery field at the moment, according to the company.
In Mexico, Rappido intends to pursue the meal delivery and e-commerce markets, which have grown over 30% per year, according to the Asociaciøn Mexicana de Internet.
Rappido’s rapid expansion is set against a backdrop of increasing e-commerce activity and mobile phone penetration across Latin America. Nowhere is this more true than in Mexico, where there’s now 76.4 million devices in use, or roughly one device for every seven out of 10 Mexicans.
Furthermore, most of these devices are smartphones, not feature phones. By the end of 2016, smartphones will account for 81.5% of all the lines in the country, according to data provided by Movile.
Backed in part by cash from the South African media giant, Naspers (which also owns a large chunk of one of China’s most successful technology companies — Tencent), Movile has global aspirations of its own for its delivery business.
The company has studied the rise and fall of the delivery model in the U.S. and thinks consolidation and a focus on e-commerce are its way out of the margin trap that has bedeviled Rappido’s North American counterparts.
“We are looking at what is happening in the American on-demand startup market where valuations have fallen, and some startups have closed their operations,” said Guilherme Bonifacio, Rappido’s chief executive in a statement earlier this year. “Our strategy, however, includes not only B2C offer but also enabling e-commerce and business, with very high frequency of use, generating much better economics – we are excited about our growth and the long term opportunities.”
Movile has been flourishing in spite of the economic crisis that has set in across Brazil. Indeed, the company expects its Rapiddo subsidiary to grow revenue by 30-40 percent, month over month, in 2016.
“Following the expansion of sectors such as taxis, private transportation, and food delivery, we know that the next market to grow is the fast-delivery application market,” Bonifacio has said.