All-in-one Super Apps the new convenience to hook customers

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November 23, 2020 6:45 AM

Super Apps that combine services – from booking tickets to shopping for groceries and making payments — make sense as they would create stickiness, believes Ankur Pahwa, partner, EY.

For consumers, e-retailers are now household names and, as experts point out, it would be hard for them to ignore large platforms that sell a range of merchandise and even services.For consumers, e-retailers are now household names and, as experts point out, it would be hard for them to ignore large platforms that sell a range of merchandise and even services.

Given how Paytm has forayed into gaming, it could soon join the club of South Asian Super Apps with members like WeChat, Grab and Gojek. To be sure there are other contenders: Amazon, Reliance Group and Flipkart – all look like they’re aiming to be one. But it’s not just the larger internet platforms, more players are moving into new categories; Swiggy is apparently exploring other hyper-local categories such as grocery and medicine to turn itself into a ‘convenience’ app and Nykaa is now into fashion and not just beauty.

A Super App can attract more customers as also more vendors and verticals; as Goldman Sachs analysts explain; this in turn will bring in more users creating a virtuous cycle. Diversifying and cross-selling would enable platforms to scale up, thereby bringing down the cost of acquiring traffic or customers which, it believes, is the biggest hurdle to profitability at Indian internet companies.

For consumers, e-retailers are now household names and, as experts point out, it would be hard for them to ignore large platforms that sell a range of merchandise and even services. Super Apps that combine services – from booking tickets to shopping for groceries and making payments — make sense as they would create stickiness, believes Ankur Pahwa, partner, EY. And it’s the increasing user base that would bring down customer-acquisition costs. It’s precisely the slow growth in organic traffic at scale that has stalled the creation of a Super App so far.

Makers of consumer goods too may want to latch on to a Super App: companies from the Tata Group or the Birla Group, for instance, may want to associate with a Super App. In this new environment it would make sense to partner with e-retailing apps rather than be a vendor because, own their own, products can get lost. As Harsha Razdan, partner, KPMG, points out, for any company if the basket of products is limited, it could lose consumers to marketplaces and other apps very soon. “It’s better to have a partner,” Razdan explained.

Non-competing apps will also increasingly team up with each other to be able to access more users; for example, a ride-hailing app may work with a grocery app. Experts say such alliances will work well when each of the partners is able to pass on more or less an equivalent number of customers to the other.

Experts warn that issues of data privacy and security could crop up, and do pose risks to reputation, but reckon these would sort themselves out over time. Getting it all together is tough; success in one area doesn’t guarantee success in another. Paytm, for instance, has not been able to replicate the payments success in commerce. So, while a Super App may be user-friendly and convenient, consumers will always check out options elsewhere. Given the market in India is a big one and becoming bigger with the increasing penetration of smartphones, there will be room for several Super Apps. Pahwa believes mini Super Apps may actually do better since since these would possibly operate in adjacent areas.

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