Lessons from Singapore

‘Superapps’ is a term first coined by Blackberry founder Mike Lazaridis over a decade ago, which he defined as a “closed ecosystem of apps that offer a seamless, integrated, contextualised and efficient experience”.

Simply put, it is an aggregation of digital services in one app. It possesses capabilities for virtually any service imaginable – from the basics such as ride-hailing, food and grocery delivery, and mobile payments, to the more unique ones like medical appointment bookings, business loans, and even international cash remittances.

Superapps have enjoyed unprecedented success in Asia, especially in China where Tencent’s WeChat – widely considered as the grandfather of superapps – was first born. Aside from WeChat, other dominant players in the region include China’s AliPay, India’s Paytm, Singapore’s Grab, Indonesia’s Gojek, and South Korea’s Kakao. Collectively, they have over 2.4 billion monthly active users – and if you reflect on those numbers, it’s equivalent to a staggering 1 in 3 of the world’s population who are superapp users.

Despite its ubiquity and widespread adoption in Asia, the superapp phenomenon has not caught on completely in the Western world. Regulations such as GDPR pose a barrier to comprehensive data collection, and without this critical element superapps are unable to map out their users’ various service habits and preference. Thus, it is difficult to drive potential up-sell or cross-sell across service verticals, effectively cutting off what is arguably superapps’ lifeblood. Moreover, competition among Western Big Tech is fierce with the walled garden trend being prevalent. Google owns Search and its adjacent services, Facebook leads Social and Messaging (and quite possibly soon the virtual world via the Metaverse), Amazon commands the lion’s share on eCommerce, and Visa or PayPal dominates the digital payments space. This results in a fragmented digital service landscape which is not the most conducive environment for superapp rollout. Despite these friction points, superapps continue their march of dominance worldwide, with Latin America and Africa being heralded as new frontier markets. 

With Singapore being one of the most mature and advanced digital markets in APAC, along with its diverse multicultural population, the Lion City is a treasure trove of superapp consumer insights. We uncovered several forces that drive adoption, and unpacked consumer confluence points that can be leveraged by brands to better resonate with their target audiences. 

According to our dentsu Singapore superapp survey, Grab, foodpanda, and Deliveroo are the top 3 platforms in terms of usage. However, not one of these ‘Big Three’ enjoyed absolute user loyalty, with 80% of the respondents claim that they have at least two superapps in their repertoire. The low loyalty can be attributed to functional reasons: 68% patronise a superapp because they have a wide range of functions, 58% cycle through a range of superapps to check if one ends up having a cheaper service than another, and 50% love to compare and find the best deals and offers.

Amidst this highly functional backdrop, the pandemic also brought about a new mindset. A survey commissioned by Deliveroo in February 2021 showed that superapps have started to play a role in consumer wellbeing during the pandemic. Food delivery acted as a source of comfort, with 69% of respondents agreeing that ordering from their favourite restaurant at the height of COVID-19 has contributed to their overall happiness. This is especially true for those aged 16-44 (73%), but also for the older population of 45+ (62%).

The mere mention of superapps conjures images of Gen Zs and Millennials hunched over their smartphones, punching in their latest food or grocery delivery orders or digitally hailing a cab to their next party destination.

However, with the older population being disproportionately affected by COVID-19, they have turned to superapps to overcome the physical limitations imposed during Singapore’s Circuit-Breaker phase. 81% of respondents from Deliveroo’s survey aged 45-54 state that they are more reliant on food delivery services to enjoy their meals. In addition, 82% of those surveyed said they would use food delivery services more regularly in the coming years, reinforcing the belief that demand and growth of superapps will be sustained in the future.

Aside from convenience, another driving factor for older Singaporeans to order food online is nostalgia and their love for local. In fact, 3 in 5 Singaporeans prefer to order from local restaurants, with those aged 55+ taking the lead (70%).

TV is widely regarded as a medium that brings together families and groups of people together. Superapps are poised to challenge that – with 49% of Singaporeans ordering food via superapps when they have a social gathering of three people and above. It has also become a family affair – with at least a quarter of Singaporeans saying they use food or grocery deliveries with their families.

Despite Singapore being one of the smallest countries in the world, there are still geographic nuances when it comes to food preferences. Top-ordered cuisines vary by region; with the West favouring Italian cuisines, East loving Western food, Central being dessert fans, and North preferring Asian food.

Lastly, we’ve also discovered temporal trends driving orders on superapps. For example, food delivery has seen a threefold increase at 12:30-2AM – pointing to an increase in night owls looking for supper food comfort and grocery delivery peaking at 7PM when customers are enjoying downtime and possibly looking for some retail therapy to help unwind at the end of the day.

Empirical evidence from industry and marketing experts show that growth is a function of both mental and physical (digital) availability. The combination of superapps’ scale and ease in facilitating purchase make it arguably the best touchpoint to deliver both goals. Despite this, superapps are still considered as a nascent channel and often overlooked by brands.

Author:
Ryan De Joya

Strategy Lead, Media Group, dentsu Singapore