Super Apps in India

• 25 Aug 2020

Why In News

Recently, the Tata Group is planning to get into aggregating its consumer offerings in an all-in-one super app.

Key Points

• A super app is an omnichannel digital platform, i.e.- a platform developed by a company offering various services and products under one umbrella.
  
  • For example, China’s WeChat, which started out as a messaging app, expanded into payments, cabs, shopping, food ordering, cab services to become a super app.
• A physical world analogy of a super app would be a mall, which allows retail space to various brands and shops across businesses and verticals.
• There are two concept of super app emergence:
  
  • The concept of super app first emerged in China and southeast Asia where internet companies like WeChat, Go-Jek and Grab evolved their apps into versatile feature apps.
    
    • Customer Traffic to Services: These companies used the opportunity of customer traffic on their platforms that originally came as social media by offering additional services leading to increased revenue realisations.
  • A different approach is followed in the west Asia region.
    
    • Services to Target Customer: The traditional business conglomerates with a large portfolio with a presence in shopping malls, grocery and entertainment are building digital assets. These businesses observe high customer footfall and high repeat purchase frequency.

Advantages of Super Apps

• For Businesses:
  
  • Higher Revenue: It ensures increased revenue realization due to consolidation of services at one place.
  • Control over Data: It provides to companies a large amount of consumer data.
    
    • Such a large amount of data can be harnessed to learn more about user behaviour.
  • Market Access: It enables domestic and foreign retailers to easily get access to the market.
• For consumers:
  
  • Convenience: It shortens the way to the desired action.
  • Diverse Services: It offers a variety of services.
  • Easy experience: It allows for a uniform and individual user experience.
  • Less Load on Phone: It saves phone memory compared to what it is in the case of multiple apps.

Concerns about Super Apps

• Monopoly: The very concept of a conglomerate trying to keep a customer within its own ecosystem for most services they might require increases the possibility of a monopoly.
  
  • The data collected by the master app could then be used to train machines in artificial intelligence which can be used either way.
• Risk to Financial Systems: Super Apps are disintermediating banks from their customers, which is not healthy for a financial system unless formal regulations are not in place concerning such apps.
• Issue with Device: A large chunk of India's smartphone market belongs to lower-end smartphones, most of which come with a space crunch.
• Language Issue: India is a multi-linguistic nation. So a super app must use vernacular language to increase consumer reach.
• Privacy: Concerns of privacy in cases where a super app has onboarded third-party service providers.

Indian Experience

• Main reasons why Indian companies are looking at building super apps are:
  
  • Relatively large base of the population is smartphones first instead of desktop.
    
    • India’s smartphone base is estimated around 450 million (2020) and it is expected to reach 820 million in the next two years.
  • The ecosystem of apps customised to local needs has not yet evolved.
• Few Examples:
  
  • Jio umbrella of Reliance Industries has consolidated various services and offerings such as shopping, content streaming, groceries, payments, cloud storage services, etc.
  • Paytm has also brought together services like payments, ticket bookings, games, online shopping, banking, consumer finance, etc into one app.

Source IE