China's WeChat showed how to create an app that straddle multiple consumer categories to be a true 'superapp'. It's time apps in the UAE focussed on creating one such. Image Credit: AFP

Superapps are gaining momentum across geographies. On the face of it, the concept is simple – a single app providing an array of services so wide that it makes having other apps redundant.

The aim is to get scale and eyeballs on to one app. Once the consumer is onboarded, offer them other services and enablers. These services typically include payment channels, shopping, social, ride-hailing, ticket booking and utility payments. The overarching theory is that consumers would gravitate towards that one superapp for all their needs.

The first successful use-case of this was WeChat in China, which grew from a social media platform to a truly multi-functional app that leveraged a mammoth user base to get consumers hooked to their offerings. Over the years, we have seen such multi-functionality apps in other markets - such as India’s Paytm, which expanded from an e-wallet into a multi-functional app and a mini-app store for further customization, and Indonesia’s GoJek, which has 18 services from foodtech to fintech and everything in between. Amazon is moving beyond online shopping with food delivery, home services, OTT video, e-wallet and more. Our region is not far behind with players like Careem, Noon, Talabat and Carrefour seriously exploring superapps.

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Sum and substance

Superapps are like an online version of a transition from the high-street to a mall, which was the popular trend in the offline retail world in the last two decades. Based on our research, consumers in UAE and Saudi Arabia have a fairly divided opinion when it comes to the need for superapps. We have observed that consumers today are aware of superapp benefits and open to trying them. But their stickiness to the platform is a concern.

Compelling enough?

A variety of factors are associated with superapps such as convenience, benefits of integration, unified payment, space saving, etc. However, the question remains - what really makes superapp super? Will a superapp be successful by just aggregating services?

What will stop the consumer from switching back to standalone apps? There is no one clear answer. One thing is certain, they will not move to the multi-functionality app unless there is a clear value proposition, be it exclusivity of offerings, and a variety of services and deals.

Superapp hopes
What consumers want from a superapp... Ease of use and integrated payment ways will be a big plus. Image Credit: Gulf News Archive

Way to go

In the Middle East, many players already have some of the key enablers required to take the next step towards being a superapp such as share of time spent, share of market, and consumer trust.

For example, noon already has a large customer base and has been able to scale in a highly competitive online shopping space. Careem holds a spot in customers’ minds as a trustworthy player who offers value-added services. Additionally, it has strong last-mile delivery capabilities that makes it simpler to integrate other use-cases.

Thus, it is natural that these players are exploring multi-functionality apps as a way to serve their customers better and at the same time improve unit economics. However, moving towards superapps might not be the right answer for all.

Based on our observations, before taking that plunge, players should answer some key questions:

* How can I provide a complementary value proposition to customers?

* Does my superapp experience reduce friction points that customers in the region face?

* Are there enough synergies between the superapp services to allow for scalability and profitability?

Players who can answer these clearly would be better prepared to position themselves in this relatively new space. If they focus on understanding local customer needs, provide a complementary value proposition and create an integrated experience, they will find that consumers are willing to wholeheartedly embrace them.

- Sandeep Ganediwalla and Soumya Jain are with Redseer Consulting, Middle East.