Why Super apps have become flavour of the season for corporate India

It’s the season for super apps — the umbrella platform that accesses multiple mini-apps — for corporate India. While Tata, Reliance and Paytm have elaborate plans including global tie-ups, a host of start-ups are eyeing these platforms to expand their customer bases at the lowest possible cost.
 

A few weeks ago, Tata group Chairman N Chandrasekaran said the group was working on a super app for a December/January release. The app would initially integrate the group’s consumer services on one platform and eventually expand to include groceries and food, lifestyle, financial services, healthcare, education and so on.
 

What the Tata group did not comment on was reports that it is talking to Walmart — owner of Flipkart — which would invest $25 billion in the app. The group was unwilling to discuss its plans, but it’s clear that it is looking at leveraging the millions of customers who use Tata branded product (including salt).
 

The Tata move comes close on the heels of the success of the Reliance Industries subsidiary, Jio Platforms, which has been able to rope in global investors such as Facebook and Google for a fancy valuation of Rs 4.36 trillion.

 

Jio Platforms also controls a number of disparate application platforms ranging from pharmacy, education, entertainment and gaming to news. These 25 apps, some of which were built in-house (such as Jio TV), or acquired (Jio Saavn or Embibe) are available under My Jio, the company’s super app. Jio Platforms claims to have over 280 million users. Bofa Research estimates that in a best-case scenario based on the app subscriptions and the digital ad revenues, this business could be valued at $13 billion.
 

It is this potential upside that has encouraged others to join, too. Digital payment giants Paytm has taken a big plunge forward in the super app sweepstakes. A few weeks after its brief spat with Google over carrying its services on Playstore, Paytm launched an android Mini App store within its app that gives users an app-like experience without having to download them, and is designed to benefit customers who have limited data and phone memory.
 

Paytm has an ambitious road map. It has tied up with over 300 app-based service providers such as Decathlon, Ola, Park+, Rapido, Netmeds, 1MG, Domino’s Pizza, FreshMenu and NoBroker. The app store has been running a beta version with select users and said it had over 12 million visits in September. Talks are on with 400 other service providers to join in. Said founder & CEO Vijay Shekhar Sharma: “For Paytm users, the app will be a seamless experience that does not require any separate download and enables them to use their preferred payment option.”
 

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 population for multiple services, from buying air tickets and paying bills, to ride-sharing. Interestingly, 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. For instance, apart from search engine Google, Alphabet also owns YouTube and Google Maps but they are not integrated in one app.
 

Even in India, not everyone is betting on building a super app. Said a top executive of Bharti Airtel, “In China, super apps became popular because there is no competition, the ecosystem is regulated unlike in India, and global players are not allowed to enter. It is difficult to pull through a super app in India.”
 

He also pointed to a marketing logic working 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 added.
 

That apart, there are concerns that a super app could enhance the risk of unfair competition, a key reason it has not taken off in the West. For one, it would marginalise apps that do not join it. Two, it would give the app owner power to choose and reject companies — which Google demonstrated with Paytm recently — and reduce customer choice.
 

From another angle, a super app could be a win-win, too. For a mini app, joining a super app would reduce the cost of customer acquisition since it could piggy back on the large active customer base. “While it improves the stickiness for Jio’s 400 million customers, it is a cost effective way for small apps to reach out to a larger customer base,” said a source close to Reliance Jio.
 

Building a super app is, however, time consuming and Jio is open to hosting competing services on its platform. The big bet for Jio could be its alliance with Facebook’s WhatsApp and the direction it takes. For starters, WhatsApp is integrating Reliance’s e-commerce platform Jio Mart so that consumers can place orders without leaving the messaging site. There is also a possibility of WhatsApp Pay, which is awaiting government approval, becoming a part of this integration.
 

But the big question is whether Reliance will want to integrate the other mini apps like Jio Saavn or a Jio TV, which are currently part of My Jio, with WhatsApp. Some analysts said a possible strategy would be to go with WhatsApp in certain areas, such as its B2B transactions with 30 million kirana shops and small and medium enterprises. For the rest, it will continue to build an independent super app.
 

But WhatsApp with 400 million users in India (it does not have an exclusive agreement with Jio) is taking tentative steps to get into digital payments in the country — a first for it anywhere in the world. And analysts believe just like WeChat, which combined messaging with payments and hit the big time, India could well be its testing ground to build its super app in the same way.