TOKYO — The success of WeChat and Alipay in China as multipurpose “super apps” loaded with chat, payment and a bunch of other services including financial services and online shopping have been one of major trends that have been influencing mobile-service startups around the globe for the past few years.
Southeast Asia’s most powerful startups like Grab and Gojek are clearly trying to grow into super apps by adding payments, food delivery and other services to their core ride hailing functions. In Japan, Yahoo! Japan’s parent Z Corp. merged with LINE, most popular chat app in Japan, Taiwan and Thailand, to develop super-app business models in both brands.
In India, Alibaba-Group-and-Softbank Group-backed Paytm, the country’s most valuable startup valued at $16 billion at the latest fund raising in November last year, has been perhaps most consciously pursuing the super app model among others. It has been adding grocery shopping, banking and financial services, health care and food delivery services to its mobile payment app for the past few years.
Enter Facebook’s $5.7 billion investment into Jio, India’s youngest but biggest mobile operator, which was announced on April 21. It looks like posing the potentially biggest threat for Paytm as a super app leader in India.
Facebook chief Mark Zuckerberg and billionaire Mukesh Ambani, chairman of Reliance Industries, one of India’s most powerful family conglomerates and parent of Jio Platforms, holding entity of Reliance’s internet businesses, provided only vague description of what the alliance will intend to accomplish.
But their comments suggest that the alliance is more about WhatsApp, the country’s most popular app with about 400 million users, and Jio’s mobile services including payment, video streaming and most-recently-added grocery-shopping service, rather than a combination between the world’s biggest social network and India’s biggest mobile network.
On Monday this week, less than a week after the announcement, Jio’s grocery shopping service JioMart opened a business account on WhatsApp, which connects WhatsApp users to JioMart through automated text messaging.
Although JioMart is rolling out its services in only several urban districts in India, the experiment helps imagine how the WhatsApp-JioMart combination will function as a multipurpose mobile service targeting hundreds of millions of Indians going forward.
For its short 3.5 year history so far, Jio has been releasing a variety of mobile apps including video streaming, music streaming, chat, payment and health care. And if WhatsApp is going to function as a portal or entry gate to Jio’s various services, that means WhatsApp will function as a kind of super app with payment and shopping functions, directly challenging Paytm’s early lead.
Paytm claims to be accepted at roughly 15 million merchants, with 350 million registered consumer users and 200 million monthly active users according to its spokespersons’ comments to local media. If one shops vegetables and fruits at typical road-side merchants in an Indian city, they typically accept Paytm with the little QR code poster on the shopfront.
JioMart intends to locally connect 30 million small-scale retailers with Jio subscribers with free delivery, placing itself on other competitive fronts as much as Paytm.
It will challenge online grocery startups like Big Basket and Grofers, as well as Dunzo, which provides “errand” service for local residents in many cities. Major conventional supermarkets also provide home delivery service as well.
Amazon.com’s Indian unit and Walmart’s Flipkart, the big two of the Indian e-commerce market, have also been reinforcing grocery as grocery and medical items are the only things that are allowed to deliver by the government. In other words, it may easily become a battle of capital.
Paytm is backed by Alibaba Group and Softbank Group. Big Basket is backed by Alibaba Group and Grofers are backed by Softbank Group. Dunzo is backed by Google. Reliance Industries is one of India’s most powerful conglomerates with a deepest pocket and now is allied with Facebook, one of the world’s most valuable companies. Every player seems to have a sufficient war chest.
The battle for a super app leader position in India will likely be an all-star game involving U.S., Chinese, and Japanese internet giants.