The front-runners of Southeast Asia’s super-app race

How many super apps in Southeast Asia are too many?

Years deep into a race that Grab and Gojek kick-started – first as ride-hailing players then morphing into financial services – at least five other players have joined in the fray.

The latest kid on the block is Malaysian budget carrier AirAsia, which has undertaken an aggressive digitalization effort in the past year. It’s reportedly in discussions to raise as much as US$300 million for its digital business arm.

Just months after expanding its e-wallet BigPay to Singapore, AirAsia launched its food delivery service in the city-state in March. It will soon introduce ride-hailing as well.

While the mix of services differ from one super app to another, these companies have largely followed a similar playbook: build a vast network of active users around a core offering first, then create an ecosystem of complementary services. Underpinning all of that is a digital wallet and, if regulations and funds allow, a blend of lending, insurance, and wealth management products follow.

Last week, Lazada began offering ride-hailing services from Singapore transport firm ComfortDelGro on its mobile app. The service, available to users in the city-state, is positioned in the app alongside LazMall, Taobao, RedMart, and LazLive and marks Lazada’s commitment toward becoming an all-in-one platform.

Sea-owned Shopee, meanwhile, has evolved from merely an ecommerce platform to encompass digital payments (ShopeePay), financing (SPayLater), and even food delivery (ShopeeFood). Its digital wallet has gained significant ground – particularly in Indonesia – in the past year.

Tencent-backed Sea, which is expected to launch digital banking services in Singapore by 2021, is also eyeing to do the same in Indonesia.

While AirAsia doesn’t have its foot in financial services yet, it has made a bid to become a digital bank in Malaysia. The airlines also said it was working on insurance and wealth management services which are expected to be rolled out in Malaysia this year, subject to regulatory approval.

Not all of these super apps have become ubiquitous, however. “Some of the platforms mentioned such as Fave Pay, BigPay have yet to make a major impact, as they are yet to enter among the top 20 apps by monthly active users in any of the markets.” That’s according to Donny Kristianto, senior market insights manager at mobile intelligence platform App Annie, who spoke to Tech in Asia for this story.

“Embedded finance works”

In a quarterly update, Reuben Lai, senior managing director at Grab Financial Group, said the firm had sold over 100 million insurance policies since its inception in April 2019.

“This milestone is significant because it shows how embedded finance – the harmony of Grab’s ecosystem – works,” Lai said. On top of providing microinsurance and microloans to drivers and merchants, Grab also offers third-party loans and a buy now, pay later product to consumers.

Credits