As Southeast Asia takes the lead in global internet growth, its digital citizens rely more and more on the convenience and accessibility of mobile apps in their daily life. In fact, the majority log an average of five hours daily on their smartphones. This opens up a myriad of options for businesses and investors to turn a serious profit. However, attempting to capitalise on the mobile application trend is a risky endeavour. According to Rico Chan, Oath’s Managing Director for Hong Kong, Japan, and INSEA, the decelerating rate of global growth could signal maturity, saturation, or simply the end of the app gold rush, and the competition between mobile apps has become brutal.
That’s not to say that the mobile app market is stagnating. Southeast Asia’s digital economy is projected to surpass $200 billion USD by 2025, and in recent years, the region has materialised as a global hotspot for mobile app developers, businesses, and brand advertisers. By some metrics, its mobile economy far surpasses that of more developed Western nations; for example, phablets (large-screen mobile devices) command 73% of Southeast Asia’s mobile device market, in comparison to only 48% in the United States.
Among the region’s individual countries, Singapore and Indonesia have witnessed an exponential increase in advertisements for mobile applications in recent years. In addition, Thailand and Vietnam are forging paths for businesses, brands, and growth marketers to reach untapped markets. As a result, m-commerce (mobile commerce) is on the rise. According to a study by Flurry, the usage of mobile shopping applications skyrocketed by 240% in 2017, trailed by health and fitness (170%), and business and finance (102%).
Here are some companies that are profiting from these mobile market trends:
Ride-hailing apps: Grab and Go-Jek
According to Vulcanpost.com, Asia is the world’s largest ride-hailing market, commanding over 70% of the market share. There are 35 million Southeast Asians who actively use ride-hailing apps to book a cumulative 8 million trips per day. Furthermore, as most of the region’s population relies on public transportation rather than personal vehicles, these app companies can expect continued success in the coming years.
The ride-hailing app duo of Grab and Go-Jek has dominated the mobile application transportation service in Southeast Asia. Their apps make travelling simple, both by cutting out lengthy negotiating sessions with taxicab drivers and providing cashless transaction features. Aside from the conveniences, their platforms also offer safety benefits, since users can rely on in-app safety measures to track their journey.
The upshot? Ride-hailing apps are expected to continue to rise in popularity, considering that 80% of the internet users in the region are not yet actively using their services. However, Grab’s dominance and Go-Jek’s expansion will be challenged as local governments encourage market competition.
Food delivery apps: GrabFood and FoodPanda
FoodPanda and GrabFood are competing for dominance in Southeast Asia’s food delivery app industry. While FoodPanda is establishing an edge with innovations that enhance its services, such as delivery drones and customer service chatbots, Grab is leveraging its massive database of users to pioneer its new offering GrabFood. Quite simply, food delivery apps are extremely convenient and efficient.
There’s no need to go out and fight the traffic or to wait in line for hours to be seated in a busy restaurant.Bangkok Post
These mobile apps eliminate traffic jams, allow hungry users to find their favourite foods with ease, and track food orders in real-time.
Overall, it’s undeniable that there is a thriving business opportunity in food delivery. For this reason, the local competition is starting to heat up with companies such as Delivereats, Deliveroo, Honestbee, and even GoJek entering the food-delivery market.
eCommerce apps: Shopee and Lazada
Both platforms are competing for control of the region’s shopping app market. At present, Lazada is leading in the Philippines, Thailand, Malaysia, and Singapore. Shopee, its closest competitor in the region, takes second place in Indonesia, Philippines, Thailand, and Malaysia, and remains the leading eCommerce app in Vietnam.
This is because mobile shopping applications offer users the ability to choose from a variety of brands and sellers across the region with the tap of a finger. In contrast to brick-and-mortar shopping centres, mobile apps allow people to compare prices, receive instant access to online customer reviews, and purchase products with quick payment options.
Thus, it is predicted that by 2025 the Southeast Asian e-commerce market will be worth $102 billion USD, 40% of the internet economy pie. There is no doubt that the money in the e-commerce market is free-flowing, to the extent that several governments in the region are starting to entertain the idea of implementing taxes in e-commerce transactions.
Travel app: Traveloka
Traveloka is taking advantage of the booming Southeast Asian tourism industry by providing travellers with a complete array of services in a single app. The company is positioning itself to be the top online travel company in the region, providing consumers with the ability to book tickets, reserve hotels, and engage with their recently launched Xperience feature, which offers activities ranging from relaxing at spas to sampling local cuisines.
Traveloka thrives with few competitors, strong local partnerships, and unique offerings. Their mobile app is redefining the travel industry by aggregating a whole host of services in one location. It also provides benefits such as price alerts and exclusive deals that are only available online, which is why the app has been aggressively spreading across Southeast Asia with more than 30 million downloads in 2017.
For Southeast Asian companies in industries ranging from ride-hailing and food delivery to e-commerce and travel, mobile apps represent an opportunity for serious user growth. However, businesses who want to follow the lead of mobile pioneers like Grab, Lazada, and Traveloka will need to create applications that enable better user experience, quick payment methods, rapid communication, and immediate updates. The mobile app industry offers significant financial rewards as a result. Soon enough, there will be a mobile app for everything.