Asia's super-apps stall

Many of Asia’s super-apps – widespread in countries across the regions – are struggling to balance growth and profitability, leading to a collective decline in market capitalisation, The Economist reports.

Why it matters

Super-apps are long established in China where they have become an integral part of consumers’ daily lives. In the West, WhatsApp’s Mark Zuckerberg and Twitter’s Elon Musk have mused on the possibility of emulating the success of apps like Tencent’s WeChat or Alibaba’s Alipay. 

Late last year, Microsoft was said to be pondering a similar option that would offer multiple disparate services within a single application. But the experience of some of Asia’s new super-apps suggests that it’s hard to replicate that particular business model outside China.

Takeaways 

• Growth up to now has been made possible by cheap and plentiful funding, which has largely dried up. 
• South Korea’s Kakao is profitable, but it has limited headroom to grow domestically where, for example, its ride-hailing arm is reported to have a market share of 90%. 
• India’s Paytm isn’t profitable but it is operating in a large and growing domestic market – which could enable it to follow the same path as China’s super-apps. 
• The growth of Asia’s super-apps has been boosted by the willingness of unbanked consumers to embrace mobile fintech innovation; Western consumers have been much slower to do so, although there are signs that is changing.

Sourced from The Economist, INSEAD