Why are superapps so popular in Asia

4 min read

It’s hard to imagine life without an Uber, or a Grab as a young professional in a busy and crowded metropolitan city – I usually always have work on my mind, and having to think about transportation from point A to point B in this day and age consumes unnecessary mental bandwidth.

And I’m not alone.

It’s no secret that ridehailing has forever changed the face of the mobility industry to the point where auto companies are losing market share to on-demand taxis. In 2018, nearly 22 billion ridehailing trips were completed worldwide, and in 2019, that number is expected to be 28 billion, according to global tech market advisory firm, ABI Research.

But despite the huge demand for ride-sharing, companies are bleeding money. Uber, the world’s biggest ridehailing company, said it did not see a clear path to profitability in the near future when it filed to go public earlier this year, and that has been the case with other players in the industry too.

Intense competition for passengers, along with government initiatives to better public transport, have forced companies to price competitively, often at the cost of decent profit margins, and that too in the face of rising oil prices and costly taxi permits.

To offset the margin squeeze, many ridehailing companies, especially in Asia, are expanding into so-called “super apps” – an online marketplace for several on-demand services. Simply put, think of an app that could help you book a ride, buy groceries, medicines, and personal care items online, transfer money to friends, order food online, book a doctor’s appointment, play games, stream movies to your phone and more, all on the same platform.

In the United States, Uber is getting into ‘super apps’ in a very small way – through UberEats. But Singapore’s Grab, which holds an 11.4 percent market share of trips completed in Asia, is playing a major role in the ‘super app’ strategy, as is Indonesia’s Gojek.

“Considering Indonesia alone accounts for 40 percent of Southeast Asia’s GDP, Grab’s offering of GrabExpress, GrabFood, GrabFresh, GrabPay, and GrabFinancial, speak volumes to the opportunity of larger revenue streams well beyond its traditional ride-hailing model,” said James Hodgson, Smart Mobility Principal Analyst at ABI Research. Grab commands a 64 percent market share in Indonesia.

Gojeck, which holds a 5 percent market share of trips completed in Asia Pacific, is also, in a big way, pushing into other on-demand services.

In fact, the company claims that ridehailing represents less than a quarter of its overall gross merchandise value.

The “superapp” trend is quite native to Asia, and the all-in-one ecosystem has seen tremendous uptake in the region.


So what’s driving this consumer behaviour?

“There is a tendency to gravitate towards something that can help reduce clutter while accomplishing my goal, and these apps are doing just that. If you think of the customer experience, users are no longer are required to keep multiple apps on their screens, and as time becomes an increasingly valuable commodity, customers will always look for new ways that they save more of their time,” says Tom Young, managing partner at RUMJog Enterprises, a tech consulting firm.

“As more people join these super apps, it’s going to be increasingly difficult to change the behaviour back to having to go to multiple places to get things done. Everyone is on these apps, and to provide any alternatives into the marketplace means overcoming the hurdle of participation,” he adds.

Superapps aren’t just about convenience though – they’re also as much about cost savings.

“As in every other ecosystem, the emergence of the regional ‘super app’ phenomenon hampers online competition and innovation. Selling various services on one platform reduces costs, making it difficult for competitors to stay in the game,” says Eric Anderson, chief executive officer of ElMejorTrato.com, a fintech platform.

Indeed, Grab’s collaboration and partnership with online content streaming company HOOQ earlier this year has already started giving Netflix tough competition in the region. Gojek also recently announced GoPlay, its native video streaming platform, which will carry original content, along with shows in Asia’s regional languages.


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