Breakingviews - Breakdown: The scramble to secure super-app status

LONDON (Reuters Breakingviews) - Super-apps are associated with China’s internet giants and hot emerging market upstarts. As rivals like Facebook’s WhatsApp and old-world businesses like India’s Tata seek to burnish their all-in-one mobile application credentials, Breakingviews explains how some might find room to prosper.

FILE PHOTO: The messenger app WeChat is seen next to its logo in this illustration picture taken August 7, 2020. REUTERS/Florence Lo/Illustration/File Photo


It’s an all-in-one mobile application that offers a dizzying array of services to users. China’s WeChat, for example, owned by the $689 billion Tencent, is a messaging tool that also allows its more than 1 billion monthly active users to book rides, order food delivery, play video games, make payments, and even dabble in wealth management products. It’s the equivalent to users accessing Facebook, WhatsApp, Uber, Grubhub, Amazon, retail banks and more directly from one place.

That can be appealing. It declutters a smartphone’s home screen, a valuable piece of digital real estate. And one app consumes less memory and battery than several different ones. That’s useful for people coming online for the first time through cheaper and less powerful handsets. In mobile-first emerging markets such as China and Indonesia, super-apps have taken off.


WeChat is the best example, though it hardly brandishes the term itself. Compatriot Alipay is another. Its parent, Ant, which is preparing for an initial public offering that could value it at more than $200 billion, describes the payments service as an “ubiquitous super-app”: Alipay allows its 711 million monthly active users to access consumer credit, investment products and insurance, as well as many of the services like ride-hailing and food delivery that WeChat offers. The pair are indispensable to daily life in the People’s Republic.

The concept has taken off across Asia. Indonesia’s Gojek and Singapore’s Grab, valued at $10 billion and $15 billion, respectively, each claim to be Southeast Asia’s leading super-app. Nearly all of South Korea’s population is hooked on the $29 billion Kakao’s all-in-one messaging tool. In India, Paytm is offering a bunch of services alongside its core payments offerings, and Walmart’s Flipkart app already boasts e-commerce, games, and video.

The newest member of the rapidly expanding club might be Russia’s internet group, Yandex, which just acquired an online bank. Non-technology outfits are also muscling in on the trend.


There is no set business model. Tencent doesn’t break out WeChat’s earnings, but pushing mobile games to the app’s vast user base has benefitted the company’s main cash-cow gaming business. Tencent also generates income through advertising, while leaving it to third parties to provide most of the other services.

Ant charges its 80 million-odd merchants a small fee for processing payments. But the bulk of its revenue comes from matching Alipay users with financial partners and collecting technology fees. It also relies on others to do the heavy lifting for additional services.

By contrast, privately-owned Grab and Gojek remain unprofitable. The latter started out building most of the services offered, but that has been costly, especially on top of the cash-burning subsidies used to compete for users and merchants. Gojek is now starting to use more outside partners.


Yes, in theory, provided the app is popular enough. Facebook-owned WhatsApp is experimenting with new services in different markets. In Brazil, its 120 million local active users can now book rides through a partnership with China’s Didi Chuxing, making use of the messaging tool’s inbuilt location-sharing feature. In India, WhatsApp is rolling out a payments service. Facebook’s recent investment in Gojek might result a similar tie-up for payments in Indonesia. WhatsApp’s unrivalled popularity in many emerging markets gives it a good chance to become the dominant, local, super-app.


That depends. India’s storied Tata group says it’s working on building a super-app that combines its disparate consumer businesses. Tata’s individual companies span Indian Hotels, Titan jewellers, groceries, airlines, electronic goods and even a joint venture with Starbucks.

It’s hard to imagine the old-world conglomerate creating a killer app. But its mishmash of businesses is ripe for, say, a loyalty scheme. Tata customers could be rewarded with digital points that could be spent elsewhere within the group. Point systems have been effective elsewhere, including Japan, and don’t cost much as long as incentives are kept in check. That may not be a WeChat-like app, but it’s a start to winning users and changing shopping habits.

For others like Malaysia’s AirAsia, attaining super-app status seems a lofty goal, and founder Tony Fernandes freely admits it. The airline’s app has been downloaded 40 million times and last week, it formally rebranded itself a “lifestyle platform” including e-commerce and fintech. In the midst of a pandemic, the pivot looks as desperate as it does plausible. Either way, it joins a sea of super-app wannabes.


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