Alejandro Argumedo, exasperated by the undesirable reputation El Salvador had in the world of business, decided to develop an application that would recognize his country on the innovation map.
Circa 2017 they developed Hugo App, the first Central American App with the aim to provide micrologistics services, such as food delivery.
Soon Hugo expanded into 6 countries (El Salvador, Costa Rica, Guatemala, Dominican Republic, Honduras, and Nicaragua). They then went on to add new services such as grocery shopping, laundry service, payments, electronic ticketing, and errands.
The label – Fastest-growing app of Central America – holds good for Hugo as the operations in Guatemala grew by 500% in comparison to the previous year. They soon intend to add new facilities such as Mandaditos, Hugo Cash, tickets for events, grocery delivery, and insurance products.
The Hugo Story
Hugo is a startup that is based in San Salvador, El Salvador and has the rare distinction of having introduced the on-demand delivery app in that region at first. In 2018, the company revenue in Central America hit $ 16 million. In July 2019, the CFO of Hugo stated that the startup’s revenue for the year of 2021 would be close to $ 50 million. That represents an increase of over 280%
Hugo is the largest delivery app in the Caribbean that provides extensive coverage. It was founded with the vision of becoming a complete delivery solution in El Salvador. In the Dominican Republic they count over 900,000 users and over 7,000 merchants are affiliated to them. Currently Hugo handles over 90 orders-a-minute in the entire region and it ended 2019 with 550% growth in volume.
Hugo, with super-app status is expanding throughout the Caribbean, after its inception in El Salvador, which is considered a risky market. They understand underserved economies, connectivity factors, local culture, the populace; which can be contributed to their success.
Yummy, the first food delivery App in Venezuela, has accepted terms to be acquired by hugo app, the SuperApp. This merger enhances their consolidation in both the industry and the region, while continuing to support the Venezuelan market.
Currently, Yummy has 225+ merchants within their platform comprising of restaurants, convenience stores, a pharmacy chain, fleet of over 250 drivers, and a local team with 50 employees, to ensure operations flow without a hitch. Yummy will adopt Hugo’s proprietary technology so as to expand into newer-verticals aiming to become the first SuperApp in Venezuela and a one-stop solution for their users.
This partnership will allow expansion into several verticals and inculcate the concept of a SuperApp so as to empower them to a faster growth. Hugo App overcame similar challenges throughout their own growth and has taken on equally challenging markets, within LATAM. This acquisition will provide great services and wide-ranging support to Venezuelan merchants.
Hugo App’s new products
While initially regional startups were replicating successful models from US or European peers, now smaller Central American countries are mirroring what worked in larger LATAM nations.
Keeping this model in mind, not only is Hugo App adapting Rappi’s delivery system, but is adsorbing the super-app concept as well such as Rappi’s cash and remuneration features.
Hugo’s new services include mandaditos, that means running errands. Using this service, users can request the company hugos – delivery personnel to fulfil a variety of miscellaneous jobs. These can range from picking up forgotten stuff to delivering a courier package.
More so, Hugo Cash provides delivery of cash without leaving their office. And the newly introduced supermarket product delivery feature enables shoppers to request goods or groceries from stores to be delivered home.
The company is venturing into newer spaces now. The new ticket feature works pretty similar to the oft accepted airline tickets where users can discard printed tickets for virtual QR codes. Lastly, due to an alliance with Mapfre, Hugo App will now offer home and road assistance services that will be available 24/7, 365 days a year.
The Yummy Story
Yummy grew at a rate that made them one of the fastest-growing food-delivery apps in history. This was attractive to investors, despite the risks in the Venezuelan market. When you cater to a niche, as in food delivery you could have 500 restaurants to order from, whereas bigger cities there could be thousands.
If you focus on only one vertical there’s always a limit. But it will be detrimental to focus on niche segments in the delivery space. Instead, companies will need to embrace the all-encompassing delivery concept to sustain high marketing and user acquisition costs, as Rappi did.
They initially focused on breakfast orders and delivering from supermarkets. They then tweaked the app so that food could be delivered from multiple restaurants in one order. This enhanced merchant adoption. During the pandemic governments mandated restaurants operate only pickup and delivery. This enhanced businesses that worked with online models.
Appscrip’s Role in the Hugo App
Last year Hugo opened up to the transportation and financial sectors as well. This is where Appscrip comes in- Hugo has partnered with us and went on to introduce ride-sharing in their platform with our technical know how and support.
In a smaller economy where Ecommerce does not exist, there is an opportunity to become a one-stop solution for customers. This is where Appscrip will join Hugo in the coming months to make it possible.
Conclusion – Hugo App
Based on the recent developments, Hugo App is expected to grow at a rate of 200% this in comparison to 2020. All the while, the company that is known for its purple branding anticipates touching more than 1 million users throughout the region, as well as signing up 2,500 additional ‘hugos’.
The application offers employment to more than 130 people at the regional level and has 3,000 ‘hugos’ registered as distributors, this adds to the growth of collaborative economy. The last-mile delivery industry is maturing, there are clear big players but it’s still very fragmented in niche products and services.
At the end of the day, execution will truly matter in this industry. As there are few legal protections and low economic barriers for entry. With few obstacles impeding potential competitors from entering this market, there isn’t any doubt that this is a highly commoditized sector. Nevertheless, perseverance, skill and planned execution is what will set the winners apart.