India Inc clearly divided over super apps to reach their customers

Though the Tatas are betting on its super app Tata Neu, experts say super apps work best in regulated markets like China

Corporate India is clearly divided over the best way to reach their customers — should they build a one-stop super app straddling various segments, or should they have standalone apps with focus on ease of usage?

The Tata Group, which launched its app Tata Neu yesterday and also Paytm have chosen the former, while telecom major Bharti Airtel has gone for the latter model. Building digital platforms has become a big focus for large companies to build valuations which can be monetised at hefty premiums.  

Tata Neu will offer a range of services from travel to groceries to electronics, hotel stays, jewellery, financial services, and so on. It will have a customer base of 120 million and an 80-million app footprint across digital assets.

Bharti Airtel, on the other hand, already has 184 million monthly active users across its three digital assets —Wynk Music, Airtel Thanks (used to manage and pay for mobile and broadband connections) and Airtel Xtreme, which is an OTT platform offering movies and content. Its premium version has already bagged 600,000 paid subscribers in the first month of its launch.

Super apps caught the world’s fancy after the runaway success of messenger service, WeChat, in China, which is used by 83 per cent of the country’s population for multiple services such as the buying of air tickets, paying of bills, ride-sharing, amongst others. However, while super apps have been popular in Asia (such as Alipay in China, car-hailing company Grab in Singapore or search engine Naver in South Korea), they have not taken off in the West.

Executives in Airtel point out that super apps work only in highly regulated markets like China where global players are not allowed to enter and customers have limited choice. It is difficult to pull it off in a country like India, they say.

A senior executive of the company had earlier said that there was a marketing logic that works against super apps. “Marketing guru Jack Trout had said in his book ‘Positioning’, that a brand stands for one thing in a customer’s mind. So Spotify means music. If it were also into messaging or payments, it would not have been there,” he had said. He also pointed out that what is important is simplicity and ease of usage.

Says Ankur Bisen, senior partner heading consumer, food and retail business in consultancy firm Technopak, “There is no point of reference around the world (except China, which is a closed market) on whether super apps will succeed or not. But it will be a big boys’ club and can be pulled through by big players like Tatas or Reliance which can make the investments.”

But, clearly, super apps spell advantages for those who already have a big consumer play such as the Tatas. For one, it increases customer stickiness — they may not want to go anywhere else if everything they want is available on the super app.

Two, it provides a larger customer base to those on the super app and the cost of acquisition of new customers goes down. It also offers third party mini apps the opportunity to join a super app to reduce the cost of customer acquisition since they can piggy-back on the large and active customer base.

The other big player, Reliance, is still sitting on the fence on this issue. It does not call its MyJio app a super app, even though many of its 25 individual apps have been integrated into it. MyJio has a bevy of offerings from Saavn, Jio Mart, Jio Health as well as payments for all communication services, and boasts of over 300 million subscribers.

Reliance has also acquired the Just Dial app, which offers search services in travel, beauty, rentals, and so on. However, unlike what the Tatas plan to do, Reliance does not offer customers points and benefits for those using its apps.

Analysts point out that a super app could increase the possibility of unfair competition, which is one reason it has not taken off in the West. For instance, when third party players join a super app (there was news that Walmart was in talks to buy a stake in Tata Neu, although the Tatas declined to comment), it could marginalise those who don’t. Also, as in app stores, super apps could reject certain companies, raising contentious challenges.