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The Story Behind the Rise of ‘Super Apps’ in SEA

Birender Singh

Birender Singh

Think super app, think SouthEast Asia! The region is home to some of the world’s biggest ‘super apps’ that consumers use to access many services without leaving the parent mobile application.

Super apps have made their mark in the region as rules governing privacy laws here are lenient compared to Western countries. In the West, app managers must take care of stringent regulations before offering services without violating privacy laws.

Some of the biggest superapps in the region are WeChat, Gojek, Grab, GoTo, Zalo and Kakao. It is said that super apps emerged due to the Southeast Asians opting for cheap phones, most of them developed in China, that do not have significant memory to support many apps to make different services available to users. With the super app, one gets several benefits, making life easy.

WeChat started as a messaging app but has been offering several other services like banking, food delivery and others to turn itself into a super app. The western is now waking up to these high-revenue-earning ventures. Now, ride-hailing app Uber offers food delivery too.

Why have super apps become popular?

The boost for these super apps came during the Covid pandemic, as people were not allowed to step out and were forced to make most of their purchases online.

The rise of digital financial services, which have become mainstream, also helped their growth. Without digital wallets, it is next to impossible for super apps to function and allow users to access services like hiring rides, buying merchandise, ordering food etc. The transactions of digital commerce payments will be valued at $171.96 billion in the region in 2022.

Super apps may not be the only players in key e-commerce segments like retail, food and ride-hailing, but they seem to be better placed than single-service apps. Since they offer multiple services, millions of their customers tend to spend more time on these apps, which converts into profit. Also, offering numerous services under one umbrella reduces companies’ marketing expenses and turnaround periods.

There are more good super apps as the eCommerce revenue in the region is expected to reach $89.67 billion by the end of this year and is estimated to witness a compounded annual growth rate or CAGR of 31% over the next five years.

A recent Morgan Stanely report stated that the super app economy that was around $5 billion in 2018 would reach $23 billion by 2025. Southeast Asia is definitely zooming on the digital services highway, and super apps are the main drivers behind this phenomenon.