The Rise of Super Apps: The Status Quo Disruptor in the Making

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Put simply, a super app is a one-stop platform developed by a business entity that offers multiple services or products under a single roof. In the real world, a close comparison of the super app concept would be akin to a mall that enables diverse retailers, brands, and shops to sell their wares across categories. The underlining theme of a super app is customer convenience. Instead of the customer having to open multiple apps separately for varied services- payments, cab booking, food ordering, doctor on call etc, under the super app model, all the different offerings would be available under one umbrella.

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The Impending Rush Towards Super Apps

The term ‘super app‘ was first coined by Mike Lazaridis, founder of BlackBerry in 2010 as follows – “a closed ecosystem of many apps that people would use every day because they offer such a seamless, integrated, contextualized and efficient experience.” Loosely there are 2 models that organizations adopt to fuel their super app ambitions:

• Platform approach: Under this model, the platform leverages growing customer traffic to diversify into value-added services towards higher revenue realisations. For example, a digital payments player might expand into the e-commerce marketplace, logistics and delivery, wealth advisory and investments, social media and communications, etc. 

• Vertical integration: This method is deployed by big business conglomerates to build an integrated digital asset that accommodates all business verticals. These business groups enjoy high brand power and witness high customer footfalls to their physical retail stores and repeat purchases. These criteria make them apt candidates to go for the super app strategy. 

 

Factors that Fuel the Rise of Super Apps

 

• India shines as a fintech powerhouse

India is a shining spot, especially when it comes to fintech. India’s fintech adoption rate stands at 87%, dwarfing the global average of 64%. Several factors have created a conducive environment for the fintech space namely the Government of India’s Digital India thrust, timely reforms, skilled talent pool, young demography, high Internet penetration and a high number of smartphone users.

 

• Middle-class and affluent are drawn towards technology

The Internet user base is expected to multiply further with the inclusion of rural users. A study estimates that by 2030, India would be home to an additional 140 million middle-income and 21 million high-income households. All of these factors would boost demand for and growth of the fintech space, including super apps.

 

• Mobile-savvy users

A key factor that influences the development of super apps is when a significant segment of the population owns mobile phones and is familiar with app usage. However, an ecosystem of apps that are customized to local requirements or preferences has not yet been built. Another trend that has been observed is that most first time Internet users tend to be through the mobile phone route i.e. by data usage.

 

• Diverse use cases

Often customers prefer to use apps that provide multiple services. For example, SBI’s YONO which was initially a digital banking platform has matured into a powerful platform that aids in new account opening, instant loans disbursal, e-commerce and a host of value-added services. An Accenture study reveals that 50% of customers interact with their banks via a mobile app or a website, indicating a strong preference for digital interfaces.

Along with revenue diversification benefits for app developers, super apps also pave the way for building a larger user base and enable greater product-market fit. Many fintech players in India have opted for this data monetization route with the re-bundling of their offerings to widen the ambit of services available under a single canopy and seize cross-selling opportunities. 

 

Super App Contenders in India

Attracted to its promise of superior growth, multiple companies are vying to capture a slice of the super app pie. Adani Group as Adani Digital, Tata under TataNeu, Reliance as Jio, ITC as ITC MAARS (Meta market for Advanced Agriculture and Rural Services) are leading examples of super apps in the making in India that are seeking to deliver a singular browsing, shopping, and digital experience to their customers.  

• One-stop shop: It is believed that these conglomerates would integrate their verticals across the board – shopping, content, video streaming, payments, entertainment, pharmacy, and beyond. 

• Dual routes: The omnichannel experience strategy is being carried out via organic growth as well as inorganic acquisitions like Tata’s acquisition of Big Basket and 1mg or Reliance’s stake buy in NetMeds, MilkBasket, and Dunzo, etc. 

Below are some of the benefits that super apps offer for stakeholders:

Source: Plariis

 

Risk Factors of Super Apps

• The dangers of a monopoly: Some experts believe that the super app concept brings its own set of risks, the key being the rise of monopoly or anti-competition practices. The possibility is heightened owing to the mindset to retain the customer within the same platform, which might result in resorting to price competition. 

• Privacy concerns: Another risk is data privacy concerns especially if the platform is integrated with other third-party service providers. 

 

 Super App Advantages for Customers

• Better customer service: Along with scope for higher revenue generation, super apps provide companies with huge volumes of valuable customer data and buyer behaviour that can be harnessed to deliver hyper-personalized experiences and improve customer service levels.

• Conserve mobile memory: Often smartphones come with limited storage and memory space. Rather than having multiple apps putting a drain on the storage, it might be prudent to have a single super-app instead.  

• Better engagement levels: The build of a super app is to enable customer convenience. Thus a super app would offer better UX and seamless navigation, keeping in mind frequent usage and the need to deliver a frictionless experience. This might result in repeat purchases and greater customer stickiness. 

 

Super Apps: The New Battleground for Business

In the coming days, one can expect to witness intense competition in the super app landscape in the backdrop of economic recovery, tech-driven app explosion, digital-first preference, and rising consumerism.  In the next article, we shall look at other dimensions that are impacting the race for super apps.