Riding the wave of superapps

Our latest report on what's going on with superapps in South East Asia and what this means for businesses globally.

A person using a smartphone device standing in front of a map.

Four years ago, we visited China to look into the world of WeChat and Alipay, the two biggest Chinese players in the world of mobile apps. We were fascinated by how one app could successfully serve almost every lifestyle need, from chatting with friends, to booking a restaurant, hiring a cab, and even sending money to your friend. 

Today, superapps are not just a thing in China. In Southeast Asia, Singapore’s Grab and Indonesia’s Gojek are household names. Both started off as ride-hailing apps but now offer other services such as food delivery and payment solutions across multiple markets.

Download our latest report to understand the market conditions that spurred the demand for these digital applications, three key strategies the superapps utilised to gain market share and five things you can earn if you're looking to scale your application.

Five things you can learn from WeChat, Gojek and Grab

Compared to Western markets which are more developed, the market conditions of China and Southeast Asia are better suited for the growth of superapps. The question is, how did superapps like WeChat and Grab take advantage of the market conditions and get to where they are today?

1. Start with a strong, frequent, core use case

All superapps started with a strong core use case. More importantly, these services are widely-used by most consumers and at zero onboarding cost. For example, WeChat started off as a messaging app in 2011, with basic features such as text messaging, sending voice clips and photos, similar to other messaging apps like WhatsApp and Telegram. Within a year, it reached 100million registered users and in two years had 190 million monthly active users. It was only in 2013 that WeChat moved into mobile payments, WeChat Pay, and in 2014, WeChat partnered with cab-hailing app Didi to allow people to hail cabs and pay with WeChat. This marked the start of WeChat’s expansion towards becoming a platform ecosystem.

Similarly, Grab started off as a taxi-booking and ride-hailing app in 2012 and in the next few years, ventured into new Southeast Asian markets such as Thailand, Indonesia, the Philippines and Vietnam. By 2016, Grab was the market leader, with a presence in 30 cities in Southeast Asia as one of the most frequently used mobile platforms. It was only in late 2016 that Grab launched GrabPay as a digital wallet to drive its users towards cashless payments. Starting with a strong core use case allowed the superapps to gain critical mass, score market leadership and establish a strong user-base before expanding into other services.

2. Hyperlocalise your product to market context 

It’s important to localise the core use case to provide a better experience for end users. While hyperlocalisation may not be so apparent in WeChat and Alipay, Grab, Gojek, Shopee and any other players venturing into Southeast Asia need to be able to navigate markets which are much more fragmented than China.

Southeast Asia is fundamentally made up of different countries, languages, currencies and cultures. Thus, beyond practicalities for UI design such as language and currencies, it’s equally important to consider each market’s unique consumer needs and preferences, as well as the need to navigate local partners and authorities. Essentially, companies need to look at Southeast Asia as multiple markets, not as one homogenous region.

Grab has done an excellent job of hyperlocalising its services to each Southeast Asian market by understanding the context and environment that users are in. For example, its carpooling services did not work in Jakarta because of the notorious traffic conditions; nobody wants to be stuck in a car for hours! Instead, they launched GrabBike, a bike-pooling service, which was a faster way to cross the city. With presence in multiple Southeast Asian countries, Grab’s ride-hailing services reflect the popular modes of transport in each market, such as GrabTukTuk in Cambodia, and GrabTrike in the Philippines.

3. Expand service offerings through partnerships 

While having a core use case lays a strong foundation for a superapp, its winning edge comes from the ability to offer a wide range of services within one app. The question is, how does what starts life as a messaging app penetrate and build capabilities in seemingly-unrelated industries?

What superapps have done well is to partner with, or even acquire, other tech businesses to build an ecosystem of services, from online shopping to bill payments to medical consultations. This allows the superapp to expand its offering and generate new revenue streams quickly without having to invest heavily in developing other lines of business themselves.

For users, this means more services being offered under one roof, giving them more reasons to stay within the app. Having third party services integrated into the superapp also removes potential points of friction in the user journey, such as app installation, account creation, payment and notifications, lowering the barrier for users to onboard these additional services. This creates a seamless and convenient app experience across the users’ daily activities.

4. Create a platform ecosystem, starting with a native payment gateway

With a whole range of services and offerings locked in by a native payment gateway (e.g. WeChat Pay, AliPay, GrabPay), superapps are designed to increase stickiness and make the user stay within its ecosystem. Not only does this make the superapp the gatekeeper of all monetisation opportunities, it also provides data on the user’s transactions and activities.

On the user’s end, the unified payment system would allow them to make transactions seamlessly without having to log in to their banks or enter their credit card information separately. Users can also use discounts earned from one service on another (e.g. discount on food delivery based on spending on cab-hailing), creating a seamless experience across different activities. This consistent and convenient user experience and the high cost of switching to other native apps locks in users to the ecosystem.

5. Provide a full suite of app services at minimal phone memory 

In emerging markets where consumers are using smartphones with lower storage space, being able to provide first-class app features at minimal storage space gives you a competitive advantage. Not only is WeChat able to provide a variety of digital services through different features such as Subscription Accounts (think email newsletters) and Official Accounts (think brand Facebook page), its Mini Programs launched in 2017 allow partner apps and brands to operate a full app within WeChat at less than 10mb.

Mini Programs are more than just additional features to an app, and instead, function like lightweight apps that run within a superapp. They allow users to use the digital service without having to download a separate app. While a wide range of Mini Programs are offered on WeChat, the more popular ones are for ecommerce (e.g. JD, Taobao), food delivery (e.g. Meituan, Chinese Yelp-equivalent Dianping, McDonald’s), and minigames. These Mini Programs are also integrated with WeChat Pay, giving users a faster and more seamless payment process.

WeChat has developed a specific JavaScript framework for developers to build Mini Programs that are consistent with the user experience in WeChat. While a native app would usually take weeks to be developed by a full team, the lightweight Mini Program can be developed by just a couple of people within a day. This makes it easy and cost-effective for other tech companies to plug into the WeChat ecosystem meaning they can tap into its existing user base and ride on its infrastructure. Today, Mini Programs are a common feature in many of China’s biggest apps, including AliPay and Baidu.

Full report available for download here 

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