#12. Super Apps in Asia
Super Apps: the kind of App you need to take a deep breath before you cite all its services. Super Apps in Asia, WeChat in India, and Tech in Asia.
Welcome! Issue #12 of Emerging Markets explorer ðŸ§Â covers stories on Super Apps: those Apps that do everything. Super Apps in Asia, the failure of WeChat in India and Tech in Asia to read on the Asian startup community.
If you wonder what Emerging Markets explorer ðŸ§Â is, start here.
👀 Remember Ant Group, our beloved fintech (still) waiting to IPO? The Chinese regulators just fined them $2.8BN after an anti-monopoly probe.
Super Apps
In business school, we are taught that it is cheaper to upsell an existing client than to recruit a new one. This is one of the basic principles behind Super Apps: cross-selling the userbase providing low friction.
A Super App is an App that offers many services in the same App, in-house, or via third-party integrations. You can think of it as similar to a convenience store where you can easily find everything, but with the great perk of the Internet that the products offered are more scalable at a lower cost.
There is some disagreement on who coined the term Super App: some say it’s Blackberry founder Mike Lazaridis in 2010. Others, that the term was first coined by Andreessen Horowitz in a 2015 podcast when referring to WeChat.
The most common services for a Super App encompass the following industries:
Social media and messaging
Food delivery
Transport booking: ride-hailing, car sharing, etc.
Travel booking: flights, hotels…
Financial services, where their offer for mobile payments, which is often followed by more banking services, can pose serious threats to the banking industry.
Marketplace for more apps, like the Mini Programs inside WeChat.
Asia is the continent of Super Apps on its own merit: China is the birthplace of WeChat and Alipay, Indonesia is the birthplace of Gojek, Singapore the birthplace for Grab, Japan for Line. They all started as single-service Apps: WeChat and Line started as social media platforms, Alipay for mobile payments, Gojek and Grab for ride-hailing; and as their userbase expanded, so did their offerings.
These Apps found themselves in Asia a ready userbase for super Apps: there was a large chunk of the population who skipped the desktop phase and were smartphone first, and the ecosystem of apps customized to local needs was not as evolved. Plus, the Covid-19 pandemic drove a lot of consumption online, benefiting them.
The market opportunity is big: Morgan Stanley calculates a $23BN revenue opportunity by 2025 on Super Apps. Investors are hungry for this opportunity: Grab has announced that it will go public via SPAC with Altimeter Capital in July, being the first South East Asian company to SPAC in the US.
Failure story: WeChat didn’t replicate its success in India
WeChat is the greatest Super App example. But what succeeded without precedents in China, wherein 2020 it had 1.2BN active users, did not make it in India.
WeChat launched in India in 2013, 2 years after its launch in China, where it already had more than 300M active users. They used a TV ad, which was unusual for an App advertising. The campaign succeeded: they achieved 25M subscribers and were the top-ranking app in Google Play for 45 days.
But the hit did not last: people started uninstalling and were less loyal to the App.
The failure is a case of the wrong product-market fit: Indian users didn’t love WeChat as much as the Chinese did.
It was for a number of reasons:
The absence of frugality in the design of WeChat, which made Indians switch to competitors:Â
The WeChat app was 40MB, while the most popular mobile phones in India at the time had 200MB of internal memory. Additionally, WeChat allowed sending videos of 4MB without compressing its size. That feature worked in China, where the Internet was cheaper, but in India, it was beaten by WhatsApp, which would compress 5MB photos to 40KB files.
The launch in the lesser popular operative systems, which made Indians not download WeChat and adopt competitors instead.
They launched with Android and iOS when in India the most popular systems at the time were Symbian OS and Blackberry market. They rolled out WeChat with those systems a year later, but that made them lose momentum.
The Add-friend requests caused friction that did not happen in WhatsApp.Â
WhatsApp was in a better position to compete in India: once you had the person’s number, you could text them.
The feature to look up and send add-friend requests to strangers nearby on WeChat made many users (especially women) leave WeChat.
This social feature backfired in India: Once the location in this feature was switched on, it was difficult to switch it off. Additionally, many women got a lot of unwarranted messages from men in this feature, which made them leave WeChat.
By 2016 Tencent realized WeChat had hit a dead-end in India and invested in competitor Hike, which was not successful either. In 2020 WeChat stopped operations in the country after becoming banned by the Indian authorities.
If you want to dive deeper, you can read this article by Factor Daily.
Source recommendation: Tech in Asia
Tech in Asia is a Y Combinator-backed media company that tells stories of tech in Asia in English, with the goal to serve the Asian startup community.
Tech in Asia has a freemium model: it offers free daily newsletters and a premium subscription to unlock deep-dive articles. In the daily newsletters, they offer a summary of the main Tech stories in the continent, and in the weekend edition, they offer an unlocked premium article.
They wrote extensively about Super Apps last week: stories of Grab’s SPAC, of the Gojek merger with Tokopedia, and on the Super App race. They also unlocked the premium article on how Disney+ Indonesian rivals plan to fight back.
You can subscribe to their free newsletters here and sign up for their premium content here.
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