The emergence of super apps in Southeast Asia was a game changer in the region, as it showed businesses growth and innovation possibilities. A super app is a multi-service platform or mobile application, giving customers the convenience of accessing various services—such as payments, food ordering, and ride-hailing—from one place. According to Statista Research, the estimated yearly revenue of a super app is USD 3.25 billion.
One of the most successful tech startups Southeast Asia has produced is Grab, which started as a taxi service but is now a super app and a decacorn—a privately held company valued at over USD 10 billion. As a case study, Grab offers taxi riding (GrabTaxi), car sharing (GrabShare), bus booking (GrabCoach), digital payments (GrabPay), food delivery (GrabFood), instant messaging (GrabChat), eScooter rental (GrabWheels), courier services (GrabExpress), and more.
Driving growth and innovation through corporate-startup partnerships in Southeast Asia
According to insights firm EdgeMarkets, cultural influences lead to the growth of super apps because people want convenient and fast services. Users want to avoid checking several other apps or sites to get what they need. They would like a one-stop shop with a customer-friendly interface.
Furthermore, increased smartphone and internet use has created the appetite for super apps since people perform more transactions online, make investments, view fashion, search retail goods and other such tasks.
Impact of super apps
Super apps are disrupting traditional industries by making it easier for Southeast Asians to receive services. For example, instead of going to a restaurant, customers can order food while relaxing on the sofa and have it delivered to their doorstep. They can also pay in advance on their smartphones, meaning they will not have to search for cash.
The financial sector has primarily felt the impact of super apps through financial technology (fintech) companies. These startups have challenged banks and forced them to start transitioning away from their legacy systems and embrace the digital economy. Traditional banks now offer digital solutions, such as checking account balances via smartphone and withdrawing money to an eWallet.
Moreover, traditional businesses are innovating and integrating various technologies to offer digital services to their customers. Artificial intelligence (AI) and machine learning (ML) are ushering in a novel age of automation, data analysis, personalised services, and advanced research and development (R&D). By analysing customer activities via the super app, companies can make data-based decisions on how to package goods and services and what integrations or innovations will enhance user experience.
Some companies collaborate with super apps to provide services through the platforms. Others are merging or acquiring startups that serve niche markets. Thus, the markets now have a competitive landscape with traditional and digital organisations trying to outdo each other, leading to more innovation.
How super apps can support startups
While super apps have significantly impacted Southeast Asia, many factors affect their growth. EdgeMarkets said financial policies and regulations in the region pose a challenge to a startup’s ability to position itself as a super app. Its digital payments platform and data protection standards have to guarantee customer safety, meaning the company must set itself up in a manner that complies with regulatory rules.
Super apps are dominant and monopolise many industries, threatening the well-being of other businesses. They also run the risk of collapsing and leaving many companies struggling, and leading to workers being laid off. These large companies may also seek to obtain political power to protect their interests.
In addition, the region’s digital transformation has created new channels for cybercriminals to exploit customers. Cybercrime has become prevalent, and stakeholders must invest in online protection tools to stay safe. Spamming has become commonplace, and governments should do more to thwart these unwanted calls.
Consumers want to avoid multiple apps because the more you jump from one app to another, the more likely you will make a mistake and fall foul of exploitation by cybercriminals. Recent payment models like Buy Now Pay Later (BNPL) endanger users even though they offer discounts when using super app services. These payments lure young people into buying goods and services on loan, thereby taking on more debt than they can handle.
As the economy has taken a beating for several months and tech stock values have decreased, Super apps in Southeast Asia can help startups by offering services at lower costs. They can offer personalised payment options to startups to ensure these emerging businesses can provide customers with a fast and convenient solution.
Furthermore, Southeast Asia’s tech startups are resilient, but they need help to evolve, grow, and fulfil their potential. Super app companies can become investors and fund the startups’ R&D needs to boost innovation and bring solutions to the market. They can even consider acquiring and integrating the startups to bring more value to the region.