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Super-apps are coming to the Indian Internet

1/ The battle for the Indian started off with e-commerce / Moving the mall online
2/ Flipkart (started by two ex-Amazon employees) became the poster child of the Indian ecosystem. 3/ It took us a few years to fully acknowledge it but India is far behind US and China 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 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 vendor and service providers
  • And now the slow emergence of super apps 7/ Many are familiar with the glorious success of WeChat in China.
  • WeChat started from messaging (utility), then proceeded to brands, social feeds and eventually payments, becoming the dominant platform aka “super-app” of China
  • WeChat 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 WeChat to order from Didi (China’s popular ride-hailing service). They’ve think they’ve order a WeChat cab.
  • WeChat is so pervasive enough to be hailed as the fifth great invention of China after compass, gunpowder, paper and printing 8/ The WeChat model has some interesting upsides
  • Services on WeChat get payments built-in and needn’t integrate their own gateway
  • 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 apps isn’t competing to be the few apps the user has on their phone 9/ WeChat it is practically a mobile OS 10/ Consumers too hugely benefit
  • You get a consistent experience and singular identity across a ton of services
  • 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-apps with highly-funded companies trying to drive as many and as frequent transactions as possible means high utility super-apps are bound to appear 12/ 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 WhatsApp. Probably, the most used internet product in India, yet comparatively sluggish in moving past pure messaging, recently launching business accounts and rumoured to have a payments integration in the works. 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. 15/ I’d bet on Indian mobile internet following the rule of three or ending in a duopoly rather a monopoly.