Super Apps: The Great Rebundling
What does the growing popularity of super apps globally mean for fintech?
In today’s digital age, there are so many mobile apps for users which are purpose-built to solve a particular issue a consumer might face. As a result, it is not uncommon for users to regularly visit a number of different accounts held across different applications. While the degree of choice is clearly impressive, it has led to the rise of what some might term ‘app-fatigue’; whereby a user is inundated by an overwhelming number of applications, thereby leading to a paradox of choice.
Consequently, consolidation is a key theme at the forefront of many consumer-facing digital service providers. In particular, there is great interest in Open Banking and Open Finance, indicating a desire to unify the delivery of digital services from a number of different providers within one central nexus. A group of apps are leading the way in the ‘rebundling’ of services, which are now known as ‘super apps’.
Essentially, such applications offer lots of branded third-party services within centralised user interface. Originating Asia, industry leaders such as Grab and WeChat offer a combination of social media, payments and services within one app. New tech and innovation has allowed these brands to build vast ecosystems, utilise local merchants and gain strong reputations among users, who prize their concentrated cross-channel capability. The apps themselves challenge the dominance of traditional banking systems, telling of the current and future ways in which we might interact with financial services here in Europe.
Super Apps in Asia you should know about
WeChat was launched in China in 2011 as a messaging service. Now, it has over a billion users, who are able to access one million mini apps. These micro applications offer services such as food delivery, ride-hailing and now financial services, as well as a full tech development platform for merchants and other businesses to launch their own tech.
Alipay is a similar competitor to WeChat and is part of the Alibaba Group. It serves as the main payment service for the Alibaba marketplaces, Taobao, Tmall, and Aliexpress, some of the largest e-commerce marketplaces in the world. Through Ant Financial, the application leverages transaction data to establish credit ratings for consumers and businesses, unifying what are two very separate processes throughout the rest of the world.
Grab started as a taxi app, and now delivers food, groceries and packages, and offers financial services such as payments, insurance and investments. As many of these super apps do, it uses local merchants and drivers to create a broad ecosystem and engineer fast turnaround, improving accessibility for users and reach for merchants.
Gojek covers four countries and a range of products covering sectors of transport and logistics, payments, food and shopping, business, and entertainment. It boasts titles such as Indonesia’s first unicorn company, handles 100 million orders a day and is the only Southeast Asian company to be listed on Fortune’s ‘Change the World’ list twice.
Global equivalents to the super apps
While the super app trend in Asia has not taken flight to the same extent elsewhere, several key players are emerging that show a broad shift towards the bundling of services.
Yandex Go is the combined platform for Yandex Taxi and Yandex Drive that streamlines all services related to transport and delivery. Given its rapid expansion and strategic plans even with the pandemic, Yandex Go could be on track to be Europe’s first super app.
Rappi is one of Latin America’s most valuable startups, offering services such as food delivery, transportation, payments and transfers, and entertainment tickets. Its offering goes beyond broad categories with possibilities for Rappi drivers to pick up something you left or even walk your dog. It is a true super app for Latin America and reduces the friction of everyday activities.
Serving the Middle East and Africa is Careem, offering a range of delivery and transport services. It has seen a big growth during the pandemic as previously-offline activities have become almost exclusively digital and it aims to unify services across the cities it serves.
While many of the Big Tech companies have moved into financial services too, Google has the opportunity to create a super app based on its involvement across verticals. It offers transport, entertainment, flights, hotels and booking packages with local merchants in regions across the world, enabling the creation of a Google-led ecosystem.
OMNi was only launched two years ago (2019) and has already become a very popular app in Central America and the Caribbean (CAC) offering fintech, mobility, health and lifestyle products. It specialises in bike and motorcycle sharing with a green aspect that other super apps have not utilised. OMNi is also expanding into Singapore with OMNiGO which will compete with the ASEAN super apps such as Grab and Gojek.
Revolut has made no secret of the desire to become a financial super app and has broadened its offering significantly in recent years. Features include Pockets, a subscriptions tracker, stock information, trading and group spending, allowing users to take control of a wide range of financial aspects within one place.
What do super apps mean for the future of financial services?
Although the super apps began in Asia, they are quickly becoming a common trend globally. Billions of users are experiencing the convenience of having multiple services within one app and local businesses gain better exposure and commerce through association with these brands.
A lot of these brands integrate external partners within their app — this is embedded finance. As embedded finance specialists, at mmob we are thrilled with the success and innovation of super apps. It demonstrates that the bundling of services is gaining popularity due to the benefits for users and easy application for businesses. While not every app can be the next WeChat, apps can offer complementary services to users through embedded finance, which is the future of financial services.