Why super apps will be a tough business in India

In India, some of the so-called super apps have failed when they tried to overreach their core domains. Amazon and Walmart-Flipkart could be viewed as super apps but have worked well only for certain types of products and services.  (Photo: Bloomberg)
In India, some of the so-called super apps have failed when they tried to overreach their core domains. Amazon and Walmart-Flipkart could be viewed as super apps but have worked well only for certain types of products and services.  (Photo: Bloomberg)


  • The idea is in vogue but what works in China may be difficult to pull off in India
  • Even if a super app is architected smartly and has customer-centric thinking, it is bound to come under increasing scrutiny. Big-tech is fighting monopoly charges across the free world

BENGALURU : Two ideas with diametrically opposite beliefs will play out in India over the next several months. One is attempting to create a network based on open protocols that would power local commerce around mobility, grocery, food, travel and entertainment. The goal is to strengthen digital inclusion by enabling and empowering the ‘little guy’. Unsurprisingly there are no big announcements. In contrast, the other idea is about creating a walled garden. Unsurprisingly again, the Indian Premier League (IPL) is the launch-pad.

How would these two ideas work?

This is a good segue into the idea of a ‘super app’ and whether a super app has a chance of success in India. And what does the term super app even mean? Does a mere online assembly of unrelated companies with a brick-and-mortar DNA constitute a super app? Interestingly, even the big-tech companies with apps that probably come close to what super apps are supposed to be have consciously shied away from calling their apps so for a simple reason—it is an admission that they are attempting to create monopolies.

This article is about all the nuances around this topic. And why making a super app work in India will be extremely tough work.

The term super app gives the impression that something is either an app or a super app. Most humans love to think in binaries because a binary is far easier to comprehend and deal with than shades of grey, even when the binaries are an inaccurate representation of a real issue.

In a real world, there are only apps–some more relevant to users than the others. Therefore, the idea of an app in relation to a super app exists in a continuum, and let me explain.

The vertical supers

MakeMyTrip (MMT) started off as an online platform for booking air tickets. That was their minimum viable product (MVP). The flaw with this MVP was that the number of airlines were just a handful and none of them saw MMT as a ‘must have’ in their lives. And the same was true with customers too. Customers were comfortable booking air tickets by visiting the websites of the top two-three airlines. Therefore, the optionality of booking an air ticket via MMT was no big deal for them. This lack of a real value proposition for either the airlines or the customers offered MMT wafer thin margins on air ticket bookings.

They needed to tweak their product-market fit. Very quickly, MMT introduced hotel bookings on their platform, and the hotel industry, unlike the airline industry, was highly disaggregated. This allowed MMT to add value as an intermediary by helping in both discovery as well as creation of trust. There was no way for a traveller from Bengaluru to figure out what was a good hotel to stay at in a tier 3 town in say Assam; and no way for that hotel to be able to attract this potential customer from Bengaluru. MMT made that possible. MMT also began helping travelers book taxis and holidays. With these additional features, they were becoming indispensable. The app, as it is today, has come a long way from what it was when it was launched. So, when it comes to travel, customers think of MMT as a single interface. So, probably MMT had become a super app for travel.

A super app, therefore, is about increasing your relevance to the customers you serve, and becoming more and more indispensable in their lives.

For instance, over the years, BigBasket has evolved into a full-service online grocery company. And because it is difficult to imagine the different directions in which a business could branch off as it evolves, the underlying tech architecture often cannot accommodate all forms and shapes a business could acquire with time. As a result, each new offering had to have an independent app.

The tech platform has been re-architected using a ‘micro-services thinking’ to allow more flexibility in the business models, and with this being achieved, integrating these diverse apps into one single grocery super app would make the lives of customers a little easier.

If you think about it, this super app, when it does take shape, would be an outcome of creating meaningful and synergistic offerings that filled critical gaps in the customer needs and simplified their lives, rather than just assembling random digital properties under a digital store.

The Chinese context

The internet technology landscape has evolved in different directions in different countries. China closed its doors to the global tech companies, and for whatever reasons this ended up creating a few large tech conglomerates like Alibaba, Tencent, etc. These conglomerates ended up doing everything: logistics, payments, entertainment, grocery, taxi-aggregation, and much more. In the process, each of these conglomerates ended up creating a walled garden behind which every conceivable service that mattered in the lives of citizens was available. They allowed apps of several small companies to operate within their super app. So, consumers never had to leave the walled garden.

But the point that one can’t afford to miss, before thinking of something equivalent for India, is that all these Chinese conglomerates were digital first or native digital companies. Their DNA was digital. They were not old age conglomerates steeped in the world of brick and mortar making this transition. Therefore, from the technology and customer perspective, they went down the correct path of creating a whole bunch of integrated, meaningful, and synergistic digital-first services.

The obvious lesson is that a super app merely mirrors the design and structure of the real business; and the real business, and business model, has to make sense from a customer standpoint. In China, the design principles embraced both a customer centric as well as a digital-first philosophy. And hence the super apps in the China context make sense. It’s a different matter that the Chinese government is unhappy with the power and arrogance of these tech companies and has begun clamping down on them.

The Indian context

Unlike China, India did not shut out the global tech companies. So, the ubiquitous app for chat in India is, and will be, WhatsApp. Amazon, despite all the policy constraints, has thrived and earned immense customer love. Walmart-Flipkart, initially funded by foreign capital and now owned by a foreign retail giant, has emerged as a worthy alternative. In addition, there are several home-grown consumer internet companies in India that have been diligently built around non-trivial vertical expertise and have received lot of consumer love and adulation. And these verticals are in the domain of payments, Edtech, grocery, furniture, home interiors and home services, and transportation, besides many others.

Some of them have been acquired and some more will be acquired, but their vertical nature is likely to be preserved even after their acquisition. The design principles in India embraced a deep understanding and excellence in vertical domains rather than thriving by being average at everything.

In the pre-liberalization days of the license-permit raj in India, we saw a lot of the conglomerate thinking where a few business families or business houses did everything because the core expertise needed was about cornering limited ‘permits’. This ‘conglomerate thinking’ does not work in an era where permits are irrelevant, consumers are more demanding, and deep vertical expertise is critical.

It’s good to remember that in India, some of the so-called super apps have failed when they tried to overreach their core domains. For instance, Amazon and Walmart-Flipkart could be viewed as super apps, and have worked well for certain types of products and services. But neither of these super apps have been able to make a meaningful entry into taxi-aggregation, grocery, pharma, and home-services. Strong alternate vertically specialized apps have emerged in these two areas.

The loyalty test

The thought that a common loyalty program would induce customers to shop on a super app is putting the cart before the horse. Loyalty points don’t draw consumers to a product or a platform. The product or platform needs to solve a serious pain point for a customer and/or simplify their lives. A loyalty program merely serves as a kind of icing on the cake to help in retention after customers start using a product or platform, and not the other way around.

A digital-first and customer centric thinking are prerequisites for conceiving and meaningfully designing an app, or for that matter a super app. No one flies an airline because they could redeem the reward points they earn at a multiplex chain, or avail of a small discount on a meal at a luxury hotel, that are listed on the super app. If this had worked, probably every airline company would have already been in partnership with a multiplex company, even if they or their parent didn’t own the multiplex company.

People fly an airline because the airline meets the criteria on what constitutes a good and well-run airline. The loyalty program of the airline (frequent flyer programs) then helps retention by increasing the cost of switching. And what makes the underlying logic of cross-brand loyalty further weak is that most airlines actually offer exchange of frequent flyer miles for a range of meaningful products and services that customers value rather than choices that are available. And, it is a well-known fact that of all loyalty programs across industries, airline loyalty programs have without doubt been the most effective.

The regulatory test

Even if a super app is architected smartly and has customer-centric thinking, it is bound to come under increasing scrutiny. We are seeing the battles that big-tech is engaged in across the free world with both governments and activists. Companies like Apple are coming under pressure to allow apps on their platform create their own app stores. There is also severe criticism against Apple for using their monopoly power to charge a hefty commission on purchases within apps installed on their devices.

Data privacy has been a long-standing issue and misuse of data has been rampant. So much so that, even real super apps have refrained from calling themselves a super app.

Apps that become dominant, and attain super app-like features, are not good for consumers in the long run even though in the short-term they may have attained that glory by virtue of creating customer wow. Competition is essential and the idea of a super app is about creating monopolies.

Even in China, the government has begun clamping down on the power of big-tech; and because China does not have to go through the due process of law, the actions have been swift and brutal. For many months, Jack Ma, an otherwise media savvy and charismatic tech honcho, was out of circulation and there was all kind of speculation. Some of the other tech leaders were also cut to size. Some of the super apps in China may be forced to re-architect their platforms into more open protocols that would allow others, including rivals, to be on their super apps.

The government in India, too, made it adequately clear that market-places cannot use their dominant position to list their own brands. So, a tech company has to make a choice–to be either a market-place or an online company. The mood across the world is quite clear.

In conclusion, the idea of a super app in a digital world is exactly equivalent to the idea of an ‘integrated conglomerate’ in the brick-and-mortar world. Both aim to achieve the same objective: start making themselves useful to customers and eventually use their dominant position to hurt customers.

The launch of Open Network for Digital Commerce (ONDC) is an indication that while governments have a role in regulating big-tech, innovation in a free market is capitalism’s own way of self-regulation. The direction in which the internet in India has evolved is probably been the most equitable and inclusive. Many forward looking and socially conscious tech visionaries have contributed to shaping this journey. The Unified Payments Interface (UPI) has been such a big digital equalizer. May ONDC turn out to be the UPI equivalent for online commerce in India.

(T.N. Hari is the author of ‘Pony to Unicorn’ and an advisor at The Fundamentum Partnership.)

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