Super-apps are coming to the Indian Internet

** Super-apps are coming to the Indian Internet ** What’s going to be the one precious app for Indian consumer? 1/ The battle for the Indian internet started off with e-commerce -Moving the mall online 2/ Flipkart (started by two ex-Amazon employees) became the poster child of the Indian startup ecosystem. 3/ It took us a few years to fully acknowledge it but India is far behind the US and China in terms of spending power/disposable income. 4/ The fraction of India that benefits from having an Amazon is relatively tiny. 5/ It’s not that the internet is not beneficial to the majority of Indian consumers, it’s just that e-commerce is not where they’ll benefit most

Unorganised retail forms the bulk of the retail market at 91%, while organised retail is at just 9% ( Source)- India’s purchases happen in small outlets near one’s home— kirana stores, pharmacies, etc. providing quick to access to most household needs.- There is no mall to move online. 6/ This has sparked some interesting trends
A push towards more utilitarian services like payments/financial services.- The expansion of these payment services into more and more vendors and service providers- And now the slow emergence of super apps 7/ Many are familiar with the success of We

Chat in China.

We Chat started from messaging (utility), then proceeded to add brands, social feeds and eventually payments, becoming the dominant platform aka the “super-app” of China- We

Chat is not an app using the internet, it is the internet; providing everything from cabs to food.- A story goes that many users in China, don’t realise they’re using We

Chat to order cabs from Didi (China’s popular ride-hailing service ). They think they’ve ordered a *We

Chat cab.* - We

Chat is pervasive enough to be hailed as the fifth great invention of China after compass, gunpowder, paper and printing 8/ We

Chat is practically a mobile OS 9/ The We

Chat model has some interesting upsides for businesses

Services on We

Chat get payments built-in and needn’t integrate their own payment gateways/services.- Mobile distribution is simplified. In an age of increasingly difficult mobile distribution, your “app ” is suddenly always available and doesn’t suffer the challenges of uninstalls, re-engagement, retention.- Mobile engagement is simplified . In an age of concentrated mobile attention (85% of mobile time going to just 5 apps), your app isn’t competing to be one of the few apps the user has on their phone.

10/ Consumers too hugely benefit

You get a consistent experience and singular identity across a ton of services- Fewer apps means more storage space in an emerging smartphone market like India where space remains a concern.- Vastly more utility coming from a single app 11/ Will the Indian mobile internet move towards “Super-apps”? YES!
The combination of scores of early internet users who benefit from the simplicity of a super-app along with highly-funded companies trying to drive as many and as frequent transactions as possible means high utility super-apps are bound to appear The red

Bus “store” inside the PhonePe app12/ The early signs are already there.

Paytm, the front-runner in this space, has gone from payments to allowing you to pay for everything from movies to gold.- PhonePe, Flipkart’s baby and challenger in this space, just launched Redbus inside PhonePe and plans to add two stores every quarter. Along with trying to get into small scale retail with a bluetooth calculator- Tapzo, an early mover in the space has been following a super-app strategy for years betting on Indian users with cheap smartphones running out of storage space.- Of course, the elephant in the room (or 800-pound gorilla depending on how you think of it) is Whats

App. Probably, the most used internet product in India, yet comparatively sluggish in moving past pure messaging. Only recently launching business accounts and p2p payments in India.- Potential dark horses: 1) The ultra-popular UC browser, because super-apps are essentially browsers, 2) messaging app Hike which also seems to be adding integrations like the recent one with Ola 13/ It appears that India’s super apps will be “transaction first”. 14/ Will the Indian internet end up like in a vertical monopolies like China?

I don’t think so.

Why?- While network effects do exist in providing a super-app, they’re on the supply side where many services get commodified.- Consumers at present have no switching costs.- Of course, this scenario changes entirely if Whatsapp goes along and executes the We

Chat playbook. 15/ I’d bet on Indian mobile internet following the rule of three or ending up in a duopoly rather a monopoly.

Acknowledgements

Tech-in- Asia for their [We

Chat timeline](http://Hat-tip to Techinasia for their We

Chat timeline https://www.techinasia.com/5-years-of-wechat)- Header image from Searchmuse- Originally posted on my blog (dm14.in)