The Rise of Superapps

Grab a Singaporean superapp, recently agreed to go public in the world's largest SPAC merger worth $40 billion. Emerging economies (India, Indonesia, Colombia, Vietnam) have been flooded with superapps in the last decade. A superapp is a platform developed by a company offering various services under one umbrella. A physical-world comparison of a superapp would be a mall, which lends retail space to various brands under various verticals. The concept first appeared in China, where companies like WeChat and Alipay, leveraged the opportunity of customer traffic on their platform. For example, WeChat, which started out as a messaging app, expanded into payments, food delivery, cabs etc.

In Asia, people access the internet primarily through their mobile phone. As smartphone penetration grew alongside internet penetration, mobile phones became more embedded in people's daily lives. Tencent's WeChat is the most successful superapp, with over 1 billion monthly users. Users can access a number of third-party services like ride-hailing, buying movie tickets, food delivery, sending money to friends. Alipay, developed by Alibaba, is another Chinese superapp. It provides easy mobile access to purchase and pay for products from local restaurants and markets.

China, with it's 1.4 billion people, completely skipped the PC/laptop/desktop phase that the West was accustomed to. China, due to it's late internet adoption, leapfrogged over PC's to smartphones, over credit cards to mobile payments. Another country with demographics similar to China, that experienced internet penetration late is India. Tata Group is now developing its superapp (Walmart is planning to invest $25 billion in it). To bolster its digital presence, Tata acquired BigBasket and 1mg. Tata's superapp will bring various consumer businesses of the conglomerate under one umbrella. The app will offer everything from ordering jewellery (CaratLane, Tanishq), to appliances (Croma) online.

Reliance-Jio (valued at $70 billion), has made strategic acquisitions to expand its digital offerings. It's most ambitious project is JioMart, India's version of Instacart. Reliance also has a strategic partnership with Facebook, and can leverage the reach of WhatsApp in India.

Grab, funded by SoftBank, Toyota, Honda, and Tiger Global, is a superapp in Singapore, Malaysia and Philippines. It encompasses a number of platforms such as GrabCar (car-hailing), GrabFood (food delivery), GrabPay (payments). In 2020, Grab was awarded a digital banking license in Singapore. Grab has also partnered with Priceline to offer hotel-booking and trip planning.

Indonesia has a duopoly in the superapp ecosystem with Gojek and Tokopedia. Gojek's GoPay is Indonesia's 4th biggest e-wallet service. Other platforms are GoCar, GoMart, GoMed etc. Gojek has received funding from Google, Tencent & PayPal. Gojek contributes over $800 million to the Indonesian economy annually. Tokopedia is Indonesia's largest e-commerce company which also provides a digital wallet and logistics system. As of February 2021, Tokopedia and Gojek are planning to merge to form an entity worth $24 billion.

MoMo, a Vietnamese fintech app, backed by Goldman Sachs, is Vietnam's largest e-wallet & e-commerce company. It also offers bill payments, movie ticket purchasing and flight bookings. The playbook is very similar to Alipay, which also started out as a payments company. According to a report by Google, Vietnam's digital economy is a "dragon being unleashed". 64% of it's 100 million population, is connected to the internet and that number is only set to grow.

Careem is UAE's superapp. It's platforms include CareemNow & CareemPay. In 2019, Uber acquired Careem for $3.1 billion. In Latin America, Rappi (backed by SoftBank) offers a seamless omni-channel experience. Rappi's strongest vertical is food delivery. It also has a live-event and ride-hailing platform. Rappi also partnered with Visa to expand its fintech platform.

Superapps have mainly been an emerging markets phenomenon. Superapps are mainly operated through mobile phones, and in the West, internet adoption preceded smartphone penetration which meant connectivity solutions were developed on other platforms. Cultural differences are also deterrents to to the superapp model in the West. They work well in pocketed regions of India, China and South-East Asia because of relatively similar cultures in each sub-region. Nonetheless, the Big Tech, are experimenting with superapps of their own.