Every tech CEO wants a Super App. In the post-Covid world, they want one. Yesterday.
Google Pay is building one, WhatsApp needs one, Amazon is dabbling in it, Jio is putting one together, Flipkart (and Phonepe), and Paytm are the other contenders. And now, the venerable Tata Group—not to be left behind in the race for India’s trillion dollar digital economy—wants one.
Everyone has the same trophy in their sights: India’s massive internet user base, the second largest in the world. The race to dominate and divvy up the stakes in India is modelled along what happened in China, where Super Apps from Tencent (WeChat) and Alibaba have become de facto gateways for consumers and neatly shared the spoils between them.
That’s also the primary reason why marquee investors poured billions into Jio Platforms at a mind-numbing $70B valuation for a venture that’s yet to take off. Even Google and Facebook, blocked out of China’s superapp race by the Chinese state, realise that they will miss the boat in India, if they don’t make fundamental shifts in their strategy - and become transaction aggregators in India. Google has announced a $10B investment plan, Facebook has aligned its bet with Jio Platforms, via investment and a planned deep integration with Whatsapp (Whatsapp is a Facebook owned company).
Not everyone calls their digital offering a Super App. The taxonomy varies. But make no mistake, the Super App is that Holy Grail of the internet economy that just keeps giving. A self-perpetuating, high-velocity flywheel of consumers, transactions and services. Super Apps funnel billions of customers and transactions and become ‘operating systems’ for the daily lives of consumers like you and me. WeChat, Alipay, Gojek are the model-Super Apps that all tech giants want to emulate. In the US, Walmart, Microsoft and Oracle are locked in a battle to acquire TikTok—and that could become the foundation for a Super App strategy.
So what’s the best way to understand how they work? Super Apps are massive consumer aggregators that drive the consumers down a path to the most popular service providers and merchants. They create a layer of Super App services (payment, loyalty, logistics, escrow, refunds) that act as enablers to a smoother transaction for a broad variety of services. Once they have the consumers' trust (and wallet), they become mega-portals to multiple services and usually craft their own offering of financial services (savings, lending, insurance, investment) that deepen their stranglehold on customers.
In China, Super Apps have even created their own currency—WePay and Alipay. These are transacted more than the official currency of the nation. You cannot survive a day in China without WeChat or Alipay—they have replaced credit cards and have become quasi-banks for consumers. They are super aggregators for everything—hire a cab, order a meal, book a spa, make a donation, send or receive money, buy insurance, watch a movie, sell a product, buy a product, build a small business… name it and the service exists as a micro-app within the Super App. Today, they even substitute as official electronic IDs for citizens. With over a billion MAU (monthly active users) these Super Apps are not built on the Chinese internet, they are the Chinese internet.
Super Apps are formed on a backbone. The backbone for WeChat was a social media and instant messaging platform like WhatsApp. For Alipay, it was a payments wallet like Paytm. On top of this backbone, they built out large ecosystems on steroids—deeply integrating with multiple merchants so that a user can avail any service from within the app with a single sign-on and without ever leaving the Super App’s familiar interface.
Yet Super Apps have thrived only in a few markets in the world—where mobile-first ecosystems developed rapidly and allowed them to thrive. Underpinned by a player with a high-frequency use case who then started funnelling customers and launched merchant marketplaces with integrated Super App services that enabled that marketplace.
This unique bundle of code, which wraps itself around a consumer’s life is simple to imagine, but hard to build.
Let’s understand why:
1. The underlying ecosystem
A Super App usually needs an orderly, integrated ecosystem to sit upon. Consumers will shift from individual apps and services to the Super App, only if it seamlessly initiates and completes a transaction.
Let me give you an example: Your Google Maps app has had options for booking an Uber or an Ola cab for a few years, but not many use it. Why? Since it merely hands you over to Ola or Uber and leaves you to complete the transaction on your own. It just saves maybe a couple of clicks, not much else.
Whereas, a Super App will create a deeply integrated layer that will call for the taxi within the app itself, show you options, track location and complete the entire journey of payment, invoice, refunds etc within the Super App itself. You could book a taxi within WeChat in China since 2014.
Now, WhatsApp in India hasn’t even come close to being a pale version of WeChat. At the moment, forget “deep-linking” with other service providers, you cannot even open a link within WhatsApp—it sends the user out into a browser. A classic Anti-Super App way of doing things.
WhatsApp’s (which is owned by Facebook) and Google’s struggles with building a Super App come from the same place. Their typical Silicon Valley world-view and DNA is to write code, not to organise underlying ecosystems—they hate dabbling with the chaotic real world and fixing broken customer journeys. They are already late to the mobile-first world of Super Apps that was built in China, and has exploded in India. Contrast this with Amazon, which is willing to roll up its sleeves and handle the grit and grime of the real world and build the missing pieces (logistics, warehouses, payments) as may be required in a local market. Google Pay, for example, got a thrust only when they had a UPI backbone to build upon. However, both firms quickly realised two things: 1) that their advertising-led business model is under threat, and 2) that India is the last frontier to win the non-China internet—and India will serve as a sandbox for mobile-first transaction models they could deploy elsewhere. Hence, now the scramble for partnerships, committing resources, and empowering local teams in India.
2. High frequency, zero friction
A Super App is only as good as the habit it creates. Habit drives familiarity and then the familiar ease gives way to trust and power usage. A Super App is designed to reduce your cognitive load—imagine if you don’t have to keep signing in and out of services or entering PINs and OTPs or remembering user names and passwords. The Super App takes care of all of this for you. A successful Super App forces consumers to make a trade-off—would they navigate its familiar interface versus go to each individual micro-service or merchant and transact. Thus, at the core of the flywheel usually sits a high-frequency, low-friction use case, like payments or instant messaging and the microapps are aggregated above that. High-frequency cases are payment wallets, instant messengers, or even hyperlocal delivery and shared two-wheeler mobility (Gojek in Indonesia).
3. Not a walled garden
Consumers are at their most demanding on the internet. Why? Simply because they can access the best provider in a few swipes. You can’t shortchange them with an inferior offering. A Super App has to aggregate or offer the best in class—and not force people down paths that they don’t wish to go. Just because I use you for payments, doesn’t mean I will use you to buy my movie ticket or book my flight. If there is a superior alternative available, you better make it available on your platform.
In a sense, Paytm’s attempts at launching its own movie/event booking service may have been misplaced. Consumers could have been well-served by deep-linking with BookMyShow rather than setting up a rival service. Similarly, setting up an online travel business requires expertise, infrastructure and handholding of consumers at multiple touch points—handling cancellations, and rebooking is the job of the domain expert, so usually Super Apps stay with deep-linking with high touch services and subsume low-touch services. The idea is, bring the service within your fold and charge a rent on the transaction.
Slide Show: Recipe for Dominance?
Ecosystem Charts: Reliance, Tata, Amazon, WeChat, AliPay, Google & Walmart (flip through their ecosystem in this slide show).
As they gathered scale, the Chinese Super Apps morphed into holding companies. They bought significant stakes in vertical specialists like travel, shared bikes and cabs, remittance, gaming, content and a host of other business—which allow them to get exclusive access as well as retain some of the value they drive by sending traffic to the verticals. The Super Apps in China have such a stranglehold on the ecosystem that startups find it difficult to survive without forging partnerships or accepting investments from them. Or as one columnist put it—it is like dealing with Don Vito Corleone in The Godfather—they make an offer that startups cannot refuse.
This holding company model is being adopted in India by Jio as well—a slew of joint ventures and partnerships, extending from e-pharmacy to edtech are precursors to a unified ecosystem. The outsized valuation that Jio Platforms commands before launch is a testimony to this.
The strategic toolkit
Talking to The Financial Times, N Chandrasekaran, the chairman of Tata Sons, the holding company of the $113 billion conglomerate, said that a range of services would eventually be available through Tata’s app, including food and grocery ordering, fashion and lifestyle, consumer electronics and consumer durables, insurance and financial services, education, healthcare and bill payments. “The Tata Group, depending upon how you count, touches several hundred millions of consumers in India, if you take consumers who are walking in everyday into a Tata facility,” he said.
Even as the Tatas—or for that matter, any other player in India—throw their hat into the Super App arena, there are a slew of factors that they may need to consider.
What’s the high frequency use case?
Granted, the Tata group is in multiple businesses, ranging from salt to steel. You can’t put a smattering of unrelated services and expect consumer adoption. Consumers want choice, especially on the net—the entire world is a few pixels away for them. (Repeat: a walled garden is not a Super App.) A conglomerate serving millions of consumers over the year is not the same as every single consumer being served 15 times a day. That’s what a Super App takes—keeping a consumer at the centre of your offering and wrapping a bundle of best-in-class services around them. That singular view of the consumer married with a fluid, easy interface is what makes a Super App. While Jio, Amazon, WhatsApp all have or are building high-frequency use cases, the Tatas have none, as yet. What’s the backbone for the Tata Super App?
Else you are just cross-promoting your consumers across your business lines, and that brings me to the next point.
Will loyalty or rewards programmes be enough?
One connecting layer that the Tatas may be considering is using a group-wide loyalty programme. However cliched it may seem (and loyalty programmes are notoriously hard to make successful), a loyalty programme could be at the core of such unrelated businesses. For a start, the millions of customers that consume Tata’s services can be auto-enrolled into one. The challenge is how do you make it compelling across a portfolio of predominantly product businesses that the Tatas own? It will require a rewiring of the highly siloed businesses across the Tata group.
Even while you build a Super App on the outside, how do you align the Super App from the inside?
This is the tricky bit.
For banks, even though they are best-placed to migrate their services to a completely digital offering, this has been a perennial struggle. They have still not been able to cut through their silos - and still don’t have one view of their customers.
Similarly, if the purpose is to cross-leverage the Tata group customers, and keep them within the Tata envelope—take your date to Starbuck, buy a phone from Croma, get insured at Tata AIG, and then stay in a Tata Housing residence, plan your holidays at the Vivanta—such thinking will work only when they drop the silos and think of “profit per consumer” rather than “profit per transaction”. The customers’ lifetime value should be measured group-wide and has to be driven centrally. Individual Tata companies may have differing margins structures and business models, but a Super App logic will have to override them, in order to craft a sticky offering for customers.
While it will be interesting to watch what they come up with, the fact is that we operate in a world where consumer-tech firms seamlessly become banks and payment systems, and social media companies become e-commerce platforms. If Tata creates a “narrowband” Super App with just Tata group services, that will be a challenge. Opening up to third party apps will be an option, but only once Tata Super App has traffic to offer them.
Do you have the digital maturity and talent?
There is a good reason that startups are adept at this game. Startups have a different DNA. The entire firm aligns behind the customer journey. Day-to-day trade-offs are made with a singular focus in mind—the customer. Not the individual priorities of satraps running a multi-headed conglomerate.
Thus, fluidity, communication, and trust within the conglomerate is important. Someone has to drive the Super App initiative, hire talent and give it the space to perform. Technology is not the moat anymore. Yes, they do have TCS to build the Super App, but ability to write code is no competitive advantage. Everyone can more or less write any business workflow into code today. The issue is not the technology. It’s aligning the people and workflows that allow the technology to deliver.
The task of internally aligning the entities to give primary importance to the Super App itself will be tedious—if you don’t have the ability to drive organisational priorities across the group, you could end up with an app that looks good but works poorly. All it takes is a few unhappy customer experiences to create a social media nightmare.
The Tatas will need best-in-class engineers and growth hackers, and create an environment for them to flourish. Working at the speed of a startup in a conglomerate will be another challenge. That will make the difference between success and failure. Else such a venture without this digital mindset can fizzle from a shiny new app launch to a feature poor, jaded app in a few months.
We have witnessed how the lack of this digital mindset and talent affected Shoppers’ Stop and ABOF (Aditya Birla Online Fashion), the dead-on-arrival project from the Aditya Birla Group, where the business basics such as leveraging the large physical footprint of their existing stores was ignored. They utterly failed to take advantage of the huge footfalls they generated on a daily basis in their stores with their digital offering. As a result, they were fighting with pure-play online apparel stores like Myntra with hands tied behind their back.
Consumer data is now ubiquitous in most organisations —every company is now data rich. It’s not how much data you have, it’s how you use it.
Is it even possible to create an integrated digital experience for such a wide variety of customer segments and product categories?
That’s a moot point.
On his part, Chandra told FT, “How do we give a simple online experience connecting all of this, and at the same time a beautiful omnichannel experience? … That is the vision.”
The most significant burden that a Tata Super App will place is that it will force all its varied businesses to arrive at the same level of digital maturity and serve consumers to a high standard. There is no room to treat this Super App as a "side” project.
Croma customers will have different benchmarks and expectations (benchmark: Amazon.in) than customers of Westside (benchmark: Myntra.com), and those of Star Bazaar (benchmark: Bigbasket.com). Even the idiom and aspirations for a buyer of Tata Sampann urad dal has to be married with the purveyor of the pumpkin spice lattes at Starbucks.
Digital is both the cheapest and the most expensive way to build a business. If your proposition doesn’t have its own momentum, it can bleed billions before you turn the tap off. Of course, if you can get it right, the upside is enormous. Competition is VC funded, and the question is, will the Tatas have the will to take on this battle with such well-funded competition?
The best way would be to build a Super App, layer by layer, slowly. The Tata’s should test rigorously with the millions of their own employees and partners, before showcasing it to the world. At the end, in the best case, the Tatas will have a successful Super App, and at worst, they would have pulled up each of their group businesses to a higher level of digital maturity.
The Tatas do enjoy phenomenal trust with Indian consumers. It remains to be seen how they translate that into the digital world.
Even as the Tata’s get ready, the Super App landscape is transforming at warp speed.
Jio is the first off the mark—with full stack offerings of its own in content, commerce and data access. It has built or acquired several potential components of a Super App ecosystem, however it’s yet to reveal what the fulcrum of such an ecosystem will be. While online grocery (Jiomart) is a massive opportunity from a GMV perspective, it is not really a driver of high-frequency stickiness (you don’t check your grocery app multiple times a day).
WhatsApp is still deciding when it will grow up to be WeChat. Despite having an unchallenged run in the Indian market for years, it has little to show. Now with nearly 500 million MAU (monthly active users), it will be interesting to see how WhatsApp and Jio marry their offerings given Facebook’s investment in Jio Platforms. Or will it remain a missed opportunity?
Google Pay is adding discovery and online ordering within the app, but is staying away from actually handling any part of the real-world physical transaction. Google Pay’s interface is remarkably clunky and non-intuitive, for a company that can deeply personalise it’s offering for the consumer and merchants.
On the other hand, Amazon, a full-stack player, is willing to dirty its hands, but we’ve yet to see them make any big moves with Amazon Pay even after being way ahead of the rest of the field in ecommerce. Jio’s entry should galvanise them into action.
Paytm, in my view, continues to defocus from its core of building a fintech company. It has spent millions trying to build full-stack verticals, with limited success. The Flipkart/Walmart combo has many internal issues on their marketplace to solve, before they can get going on their Super App strategy. However, its payment wallet, PhonePe, is doing well, and could be a springboard for their ambitions.
One final word. The Indian digital consumer won’t be won over by the physical assets you own. The consumer will be won by how you organise the world for them, by the journeys you craft and the choices you create. Whether you get the job done in a simple, seamless manner and if you live up to your promises. Unlike China, the Indian opportunity is still relatively small because of the low purchasing power, which is further compounded by the heterogeneous and fragmented nature of the market. The winners will be the ones who unlock local, innovative work-arounds and craft category-leading digital experiences.
(Still curious? Read Haresh Chawla’s related columns on how tech giants are rewriting the rules of how business empires are built and how new platform businesses are edging out traditional businesses and resetting markets.)
Have questions on Super Apps? Ask Haresh Chawla directly on Twitter, as he engages with the Founding Fuel community between 3 PM and 4 PM on Wednesday, September 2. When you post your questions, remember to tag @FoundingF and @hchawlah, and use the hashtag #DesiSuperApp.
