What Are Super Apps and Why Do Uber and Others Bet on Them?

Companies start with a core service and build a large user base around it. Uber, Grab, and Gojek have ride-hailing at their core; Klarna and Vodapay were initially digital payment systems, and the AirAsia Super App’s first service was flight booking.

With a super app, users sign in to many different services with one ID. For example, one Grab account gives a user access to deliveries, mobility, financial and other services.

The user data is shared among all of the services, so the user doesn’t have to enter their information multiple times. This saves time and makes it easier to keep track of everything. For example, if the user orders food from a restaurant through the super app, their address and payment information will already be filled in.

Mini apps are lightweight programs inside a super app. Like native apps, they offer different services: shopping, car rental, food delivery, etc. The difference is that to use a mini app, the user doesn’t need to download and install it or create a profile—it opens in a super app that’s already installed. Global and local enterprises alike have mini apps in super apps, from Walmart and Nike to local coffee shops and movie tickets sellers.

The platform usually includes a mobile wallet, like Grab’s GrabPay, or Gojek’s GoPay. Some platforms allow for both online and offline payments, and some go even further and partner with financial companies to provide banking. This is what Rappi did—they partnered with Visa and offered their users to order a RappiCard through the application, both virtual and physical.

It’s cheaper to attract users to one platform than to separate ones. In 2018, Gojek’s founder Nadiem Makarim explained that Gojek “converted” existing users into users of the new services, and it cost the company nothing because users already had the app.

This model created a “positive cycle”—the cost of acquisition of every new customer for every new vertical continued to drop.

A company can keep the audience inside the ecosystem longer thanks to several additional services. For example, Uber combined ride-hailing and food delivery into a super app in 2019 to “upsell” ride customers to Eats deals. According to Uber’s CEO Dara Khosrowshahi, customers’ engagement with the platform “more than doubles” when they use more than one product. That’s why it was reasonable to unite the products in one interface.

Additional services help businesses generate revenue in times of crisis in their core vertical. According to AirAsia’s CTO Pablo Sanz, the company had been looking for ancillary sources of revenue right before the pandemic started, and had laid the foundation of the AirAsia Super App in 2019. Eventually, it helped keep the business afloat. Capital A, which now owns AirAsia, is considering the new digital platform as a way of mitigating market risks.

All services in the super app have a shared loyalty program and shared benefits like cash back, discounts, and coupons. For example, members of the Klarna rewards program get points for purchases through the Klarna platform.

Also, Klarna’s users store and access all of their physical and digital loyalty cards in Klarna. Hence, they save money with Klarna because they earn and spend rewards on a larger number of products, and remember about the available discounts in their favorite stores.

With a super app, users don’t need to create a new login, add payment info or free up space for a new service. For example, Grab includes more than 20 services, and its average size on Android is 400MB. A standard Android application takes up 60MB, so if all of Grab’s services were standalone, they’d require more than a gigabyte of storage. That’s why a single app is more practical.

According to a PYMNTS and PayPal’s survey, 7 in 10 consumers are interested in using one application to manage payments and everyday activities. Rappi is a good example of a company closely watching this trend. 6 years after they had started the express delivery business, Rappi team noticed a growing demand from the customers to have financial services integrated into the same app. That’s how Rappi Pay and Rappi Bank were launched—digital payments and banking.