Southeast Asian companies are in the race to develop their own super apps. Some Internet businesses are expanding beyond their core businesses to offer services such as on-demand transportation, food delivery and telemedicine. The goal is to keep users of their app for as many minutes as possible each day, generating more transactions.

Service expansion beyond core activities

In Indonesia, the travel platform Traveloka offers taxi-hailing services in partnership with Blue Bird, the leading taxi company in the country. Called QuickRide, the service was officially launched on January 19, which is available in 16 cities, including Jakarta, Bandung, Semarang and Denpasar.

Earlier, Shopee established a similar partnership with Blue Bird in December 2021. In recent years, both companies have expanded their consumer services beyond their core services: online hotel and flight booking for Traveloka and e-commerce for Shopee. In addition, both firms have financial technology (fintech) divisions: Traveloka introduced PayLater feature in 2018 and ShopeePay officially launched in 2019.

In 2021, Traveloka and Shopee launched Eats Delivery and ShopeeFood food delivery services. Thanks to aggressive marketing strategy, ShopeeFood has captured the market share of GrabFood and GoJek's GoFood in the first year of operation, although there is still a long way to go to catch up with the leaders. According to Momentum Works, last year, GrabFood was the leader in food delivery in Indonesia, controlling 49% of the market, followed by GoFood with 43% and ShopeeFood with 8% of market share.

Recently, Traveloka has encroached on the field of telemedicine when announcing a feature that allows users to meet doctors online, book a Covid-19 test, and schedule a health examination appointment.

These moves show that Southeast Asia's major consumer applications are on the same roadmap, which is to leverage the large user base to provide a variety of services, from ride-hailing, fintech, to e-commerce and food delivery. Grab claims to be Southeast Asia's first "super app", and this title has since become the aspiration of similar platforms.

Grab and Gojek are the two largest super apps in the region. Today, more players participate in the race. In 2020, low-cost airline AirAsia presented itself as the "ASEAN super app for everyone". AirAsia will soon launch ride-hailing, delivery, and courier services in Indonesia. Its food delivery and taxi hailing services are active in Malaysia and Singapore.

The term "super app" was first used to describe WeChat, which is used by 1.2 billion people, most of them from China. WeChat combines messaging, payments, e-commerce and more, becoming an integral part of many Chinese. Companies like Facebook try to imitate, but few succeed. In Southeast Asia, Grab and Gojek lack many of WeChat's features, even as they've been called "super apps".

More competition means more choices for users. However, Grab and Gojek will still be the leaders for now as they hold the upper hand in the ride-hailing and food delivery markets. Shopee, Traveloka, AirAsia need to work harder to achieve the title of "super app".

E-wallets, the key to super apps?

According to Fortune, based on the history of Chinese super apps, the key front on the super app battleground will be payments. No matter what stage of development they are at, the ultimate goal of every super-app is popularity. This is where payments come in.

Tencent's WeChat and Ant Group's Alipay used to be e-wallets before becoming super apps. Their success is largely due to a payments platform that holds many services together, making it easy for users to try new things. By extending their “buy with one click” strategy to brick-and-mortar stores, they have helped promote China's cashless revolution.

Southeast Asia is facing a similar transformation. The region converges the conditions that have made China's e-wallet boom, such as mobile Internet access rates up to 90%, rapid urbanization, and a cash-based society with more than half of the population with no access to formal banking services.

The domination of e-wallets requires factors such as size and frequency of use. In terms of scale, GrabPay, which was launched in 2016, has a strategic advantage over competitors because of its strong ride-hailing service in the top six Southeast Asian markets. GoPay was also launched the same year but with a more limited presence, focusing only on Indonesia. ShopeePay is a latecomer (in 2018), but with its willingness to play in terms of marketing and focus on e-commerce, it is also a formidable player.

As of 2021, only 17% of all transactions in Southeast Asia were cashless. The best way to change behavior is to turn non-cash transactions into a commodity. Grab and GoTo are in the "top" thanks to their ride-hailing and delivery services that take place almost daily. Linking e-wallets to such high-frequency activities is extremely helpful in creating repetition, habit formation and ultimately trust.

The e-wallet battle in Southeast Asia has just begun. As the market continues to develop, e-wallets will be a springboard for other financial services such as lending, insurance, investment, and e-banking. Grab and Sea (the parent company of Shopee) have obtained an e-banking license in Singapore, paving the way for the transition. They can start thinking about providing financial services from A to Z for users, helping to increase wealth through investment, financial management through loans, and protecting valuables with insurance.

This is a much larger opportunity of super apps: bringing mainstream banking services to 100 million underserved people. Once this is achieved, we will witness one of the greatest economic growth stories in history.

E-wallet services in Vietnam

Vietnam records one of the highest e-payment growth rates in the world, about 35% per year.

Vietnam’s e-wallet market saw robust growth between 2015 and 2020 and is expected to continue this rapid growth in the next 5 years, according to IMARC, the International Market Analysis Research and Consulting group.

By the end of 2019, Vietnam had 32 non-banking organizations that were authorized by the State Bank to provide e-wallet services. Most of them provide e-wallet services, online payment gateways, support for money collection and payment, and electronic money transfers.

MoMo, Vietnam’s most popular e-wallet, has more than 12 million users, 10,000 partners, and more than 100,000 points of sale. It has partnered with banks to increase the number of customers and created more points of sale.

In Vietnam, the e-wallet market has both foreign and domestic suppliers rushing to join the trend.

Financial technology companies have launched products like MoMo, VNPayQR, NextPay, Payoo, an Pay365.

Domestic banks introduced products like Bank Plus, a cooperation between telecom giant Viettel and MBBank, Timo by VPBank, and MEED by Maritime Bank.

Telecom enterprises Vinaphone, Viettel, VTC, and FPT have launched VNPT Pay, ViettelPay, VTCPay, and Pay FPT. Even Zalo, which provides messaging services, has made a move, launching ZaloPay.

As a late comer to the market, Zalo leveraged the 100 million users on its social network to convince retail partners to accept its ZaloPay e-wallet.

Zalo intends to have 1,000 points of sale this year, including very small points like coffee shops and grocery stores.

But convincing users to conduct transactions at these 1,000 points is a headache, said Truong Cam Thanh, CEO of ZION, the owner of ZaloPay.

MoMo, Moca and ZaloPay have advantages in payment at the counter. Moca holds Grab service booking. AirPay is the e-wallet with the largest number of users (Shopee). Payoo is a platform for making payment for services like water, electricity, and internet.

Every e-wallet has its own advantages, but none is powerful enough to dominate the market.

Du Lam

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