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Will Super Apps Disrupt the Internet Economy?

Will Super Apps Disrupt the Internet Economy?

Only if they can offer a seamless marketplace user experience and a more-than robust cybersecurity promise on data and payments information.

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In recent months, there has been a lot of talk of super apps that will replace all other apps. Everyone from fintech to social apps to grocery and ride-hailing apps is looking at evolving into an all-in-one platform. Super apps are basically single mobile applications that are designed to provide a multitude of services under a single, virtual umbrella. Thus, rather than relying on multiple apps for different services, users can have access to a plethora of seemingly unrelated services in a single location on their mobile phones. The idea is to make it convenient for people to use a single login for all possible needs. Across the globe, these platforms are being envisioned as virtual malls, and different geographies are responding to the trend differently.

The idea of super apps has been around for a while. In the West, players have been experimenting with super apps for several years now, but they are yet to pick up pace or mass popularity. It remains to be seen  how consumers in the UK, US and Europe respond, when bigger players like Meta, etc. enter into this space.

China’s experience has been different. The world’s most populous country has managed to scale super apps with Alibaba and Tencent because of their sudden growth in internet penetration—more on this below. But the overall experience across Asia is yet to see any noteworthy growth in the super apps space. While India is still new to the space, it is unlikely that super apps will become the touted revolutionary disruptors in the mobile B2C space. There are a number of reasons for this:

To begin with, the super apps scenario in India looks a bit disheartening because there are already established leaders in the industry for different product categories. Disrupting existing leaders in their categories is challenging, owing to the deep capital and people investments made.

Furthermore, as mentioned above, other than China, the global trajectory of super apps has not been the most encouraging. Thus far, no single company in the world has been able to develop a fully successful, all encompassing super app model. Players like Salesforce and ServiceNow have been working on designing ecosystems that began with basic offerings, but soon pulled in solutions and services which were logical partners in its bouquet of applications.

The players in China who have been able to build traction have a lot of contextual history to their credit, starting with their journey of digital penetration across China. Tencent, the Chinese tech behemoth and leader in the super app realm, did this with its WeChat app—the messaging services app that acted as a virtual platform for enabling life online in China. WeChat first successfully introduced the concept of a super app. It soon morphed into becoming more than a social networking platform and offered its over billion users an entire ecosystem of services that includes payment services, gaming, doctor consults, financing and loan services, hotel reservations, and car purchases.

But China’s experience has been different for another reason. China has been able to scale the super app model because of weaker regulations. India, on the other hand, is a highly regulated country especially when it comes to fintech, lending, peer-to-peer or marketplace models.

Super apps are also likely to face challenges as they do not hold enough value generation promise for partners. The bedrock of any digital ecosystem is to generate profitable growth for each participating partner. Most super app models so far have ended up as monopolies or at best duopolies and this makes their enduring future questionable.

Moreover, it is important for a successful digital ecosystem to build customer-centric offers and for this it is not just the volume of user engagement but also its stickiness. For developing genuine customer value propositions, a huge amount of investment needs to be undertaken.
It is important for super app aspirants to understand that one cannot be reigning supremos in multiple segments and still provide the best user experience. It is not feasible to be a leader in every category. There are specialised apps for travel, shopping, payments and so forth where companies are providing the best experience to their users. This is not for super apps to provide.

Another thing super app players are not taking into account is that  variety is the spice of life. Shopping is an experience users cherish. There are recreational elements to shopping or engaging services that people like to experience. Super apps can seem binding and monochromatic to a user. While discounting the convenience of use, they take away the charm of visiting different online retailers or brands to get a sense of the variety and multitude of choices available.

Furthermore, in a country like India, customer trust—especially in online spaces, where people are already a little wary of virtual frauds— plays a key role. The consumer must never be taken for granted. Lastly, for users to trust one platform with all their information, the robustness of the platform’s security framework will need to be more than exemplary. One cannot deny that super apps do offer several benefits to customers and present new opportunities for business, but for super apps to have a fighting chance against Indian users’ favourite standalone apps, they not only need to offer a seamless marketplace user experience with strong customer appeal, but they must also offer more than robust cybersecurity promises on data and payments information. With the internet ecosystem getting overcrowded and scores of apps vying for people’s attention, a super app needs to be able to cut the clutter and prove itself as a necessity rather than a luxury to be integrated into people’s lives and not just grab but retain attention. A tough ask by any standards.

(Upasana Taku is Co-founder and COO of Mobikwik)

Published on: Feb 14, 2022, 5:53 PM IST
Posted by: Vivek Dubey, Feb 14, 2022, 5:23 PM IST