23 highlights
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The race to dominate and divvy up the stakes in India is modelled along what happened in China, where Super Apps from Tencent (WeChat) and Alibaba have become de facto gateways for consumers and neatly shared the spoils between them.
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That’s also the primary reason why marquee investors poured billions into Jio Platforms at a mind-numbing $70B valuation for a venture that’s yet to take off.
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Even Google and Facebook, blocked out of China’s superapp race by the Chinese state, realise that they will miss the boat in India, if they don’t make fundamental shifts in their strategy - and become transaction aggregators in India.
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But make no mistake, the Super App is that Holy Grail of the internet economy that just keeps giving. A self-perpetuating, high-velocity flywheel of consumers, transactions and services.
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In the US, Walmart, Microsoft and Oracle are locked in a battle to acquire TikTok—and that could become the foundation for a Super App strategy.
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Super Apps are massive consumer aggregators that drive the consumers down a path to the most popular service providers and merchants. They create a layer of Super App services (payment, loyalty, logistics, escrow, refunds) that act as enablers to a smoother transaction for a broad variety of services.
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Once they have the consumers’ trust (and wallet), they become mega-portals to multiple services and usually craft their own offering of financial services (savings, lending, insurance, investment) that deepen their stranglehold on customers.
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In China, Super Apps have even created their own currency—WePay and Alipay. These are transacted more than the official currency of the nation.
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Today, they even substitute as official electronic IDs for citizens. With over a billion MAU (monthly active users) these Super Apps are not built on the Chinese internet, they are the Chinese internet.
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Super Apps are formed on a backbone. The backbone for WeChat was a social media and instant messaging platform like WhatsApp. For Alipay, it was a payments wallet like Paytm.
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This unique bundle of code, which wraps itself around a consumer’s life is simple to imagine, but hard to build.
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On top of this backbone, they built out large ecosystems on steroids—deeply integrating with multiple merchants so that a user can avail any service from within the app with a single sign-on and without ever leaving the Super App’s familiar interface.
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Consumers will shift from individual apps and services to the Super App, only if it seamlessly initiates and completes a transaction.
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WhatsApp’s (which is owned by Facebook) and Google’s struggles with building a Super App come from the same place. Their typical Silicon Valley world-view and DNA is to write code, not to organise underlying ecosystems—they hate dabbling with the chaotic real world and fixing broken customer journeys.
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Contrast this with Amazon, which is willing to roll up its sleeves and handle the grit and grime of the real world and build the missing pieces (logistics, warehouses, payments) as may be required in a local market. Google Pay, for example, got a thrust only when they had a UPI backbone to build upon.
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A Super App is only as good as the habit it creates.
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In a sense, Paytm’s attempts at launching its own movie/event booking service may have been misplaced. Consumers could have been well-served by deep-linking with BookMyShow rather than setting up a rival service.
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As they gathered scale, the Chinese Super Apps morphed into holding companies. They bought significant stakes in vertical specialists like travel, shared bikes and cabs, remittance, gaming, content and a host of other business—which allow them to get exclusive access as well as retain some of the value they drive by sending traffic to the verticals.
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One connecting layer that the Tatas may be considering is using a group-wide loyalty programme. However cliched it may seem (and loyalty programmes are notoriously hard to make successful), a loyalty programme could be at the core of such unrelated businesses.
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Similarly, if the purpose is to cross-leverage the Tata group customers, and keep them within the Tata envelope—take your date to Starbuck, buy a phone from Croma, get insured at Tata AIG, and then stay in a Tata Housing residence, plan your holidays at the Vivanta—such thinking will work only when they drop the silos and think of “profit per consumer” rather than “profit per transaction”.
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Day-to-day trade-offs are made with a singular focus in mind—the customer. Not the individual priorities of satraps running a multi-headed conglomerate.
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Jio is the first off the mark—with full stack offerings of its own in content, commerce and data access. It has built or acquired several potential components of a Super App ecosystem, however it’s yet to reveal what the fulcrum of such an ecosystem will be.
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Unlike China, the Indian opportunity is still relatively small because of the low purchasing power, which is further compounded by the heterogeneous and fragmented nature of the market. The winners will be the ones who unlock local, innovative work-arounds and craft category-leading digital experiences.