Jun 30, 2020
2020 has forced enterprises to rethink and re-evaluate their business challenges and opportunities. The role of digital experiences is even more critical for enterprises as consumers interact with mobile apps for everything from ordering groceries to payments to watching video streaming services. Mary Meeker’s recent COVID-19 impact report suggests that businesses doing the best, have products that were always in demand but especially so in uncertain times – and that list now includes entertainment.
In this scenario, apps which can help consumers accomplish a multitude of tasks – also known as Super Apps have gained currency. Such apps were popular even prior to the COVID-19 outbreak especially in markets such as Indonesia, China and India – where consumers took to mobiles as their first entry to the online world as opposed to a gradual shift from desktops, laptops and mobiles as seen in the western world.
Super Apps was a term introduced in 2010, by BlackBerry founder Mike Lazaridis. He described Super Apps as a closed ecosystem of multiple apps used on a daily basis due to their ease of use. In today’s world Super Apps are a combination of functions like social, financial, utility services and entertainment integrated into one app. We have seen food delivery apps extending to grocery deliveries and offering video recipes, cab aggregator apps evolving into food delivery and payment apps encompassing everything from e-commerce to news. This phenomenon will only rise rapidly in the near future.
A recent KPMG report suggests one of the major driving forces for the rise of Super Apps at a global level is the shift in consumer behavior and preferences. Specialist apps focused on delivering one service well– which led to a proliferation of apps in a device. After nearly a decade of fragmentation and unbundling of services in their lives — consumers are starting to revert towards re-bundling, says the report.
Of course, consumers are not specifically stating that they need a Super App. However, the shifts in their demands from a digital solution are leading to the rise of such apps. Here are a few such shifts:
The rise of Super Apps started in South East Asia and is now becoming a worldwide phenomenon. The success of the Chinese giants like WeChat and Alipay is encouraging the rest of the world to tap into this opportunity. Recently, Yahoo Japan’s parent Z Corp. merged with LINE, a popular chat app in Japan, Taiwan, and Thailand to develop super-app models for both brands.
In India, our client Paytm rose from being a payments app to becoming a Super App and offer a range of services such as bill payments, movie ticketing, e-commerce and now contactless food ordering [users can scan restaurant menus through the app, place and orders and pay the bill thus maintaining social distancing]. In a recent interview, Vijay Shekhar Sharma, the founder of Paytm said, ‘Customers on our app should complete as much as their day’s tasks’. The merits of this approach is plain to see – make the app a single destination for a multitude of needs and tasks. Recently, we also worked with one of the leading e-commerce players of India to integrate insurance aggregator services on their platform.
In Indonesia, Go-Jekhas emerged from ride-sharing platform to offering a range of services like food delivery, medical advice and financial products. According to Go-Jek, ‘the biggest moat Go-Jek built is payments. Once you’re handling money for a user, you can build a castle of services within it.’Such Super Apps leverage their existing infrastructure in innovative ways like using their ride-share drivers as bank tellers.
In India too, we are seeing such apps gaining investor’s attention – Tencent has the most prolific India portfolio including Ola, Flipkart, Swiggy, etc. Softbank, which backs Paytm and Ola in India, has also invested in Grab.
The much-revered Mary Meeker’s 2019 internet trends report cites how local services are evolving into super apps that fuel usage at scale. One such example is Meituan, an on-demand delivery platform with 412 million annual users, growing at 26% year over year. During the COVID-19 pandemic, a large number of consumers have turned to the platform to order non-food items. Understandably spiking the company’s confidence that food delivery service will become the infrastructure service for China’s urban population. In India, MeituanDianping has also invested in the local food delivery service – Swiggy. Another such example is Alibaba’s Alipay which has become a Super App with services that support payments for more than 1 billion users.
Besides the shifts in consumer behavior, another factor that has led to the growth of Super Apps is the blurring of boundaries between industries. A digital wallet platform has emerged as a competitor for e-commerce players, a ride-sharing platform can be a competitor for delivery apps and so on.
The growth of the platform economy has also led to the flourishing of Super Apps. Super Apps like Grab, WeChat, Alipay, Go-Jek, Paytm, Kakao, Line in Japan, or Rappi in South America, are examples of the platform business model.
In fact, the most valuable companies in the world – Facebook, Amazon, Google, Microsoft, Apple, Tencent, and Alibaba incorporated the platform business model years ago. The acceleration of this trend has led to enterprises shifting away from a single-purpose to multipurpose apps, resulting in the rise of the Super Apps.
Some organizations are also integrating their offers to break away from dependencies on third party platforms. For instance – Ikea is breaking away from Amazon and is working on building its own platform. While some enterprises are partnering with existing payers to build Super Apps for e.g. Berkshire Hathaway and JP Morgan have together launched a healthcare venture with Amazon.
It is evident that Super Apps make sense in the current world and the world to be, especially for enterprises that already have the infrastructure to evolve into one, with minimal resource and cost implications. And, we have seen that happening with the likes of platforms like Zomato, Swiggy, etc which quickly adapted to essential services delivery platforms from being food platforms.
Recently, our client Noon.com, one of the leading online marketplaces of Middle East, launched Noon Daily, a next-day fresh grocery delivery service in Dubai, via the noon App. The launch of the app was accelerated in the current situation with pre-payment and contact-less silent delivery features. We have also partnered with the client to launch their mobile wallet app – ‘Noon Pay’ which will make payments easier for their customers, hence closing the entire loop from ordering to payments.
Here’s how Super Apps can help enterprises in business growth
As rightly pointed by Cristian Citu, the World Economic Forum’s Digital Transformation Lead:
“Today if you smartly combine established and emerging technologies with a data-driven and customer-centric approach organizations have a major opportunity for exponential growth”.
The same stands true for enterprises entering into the arena of Super Apps.
While building a Super App might seem like a promising idea, however, it might not be the right strategy for every business. Some factors that companies should consider before making this leap:
The Southeast Asian markets have seen tremendous growth and the rise of Super Apps. With the rise in the number of internet and smartphone users, this trend will only see further growth. However, enterprises have a long way to go when it comes to capturing western markets which are digitally mature and regulatory norms are way more stringent. Enterprises like Uber have already led the way to Super Apps in these markets and initiated offering services like food delivery, ticketing with Uber Transit, and payment services with Uber Money. Irrespective of the market and geographies it will be critical for enterprises to consider the why, what, and how of their Super App strategy before taking the leap.