Are we seeing the emergence of Australia’s first Super App?
Offering multiple unrelated services via a single application is fast becoming the way of the future. In recent years, ‘super apps’, as they are known, have emerged offering a marketplace of services, delivered via in-house technology and through third party integrations.
Instances of these apps are most prevalent in Asia, where Alipay and WeChat dominate the market. First established as a messaging app, WeChat currently boasts over 1 billion monthly users and has evolved into an all-in-one marketplace where users can arrange anything from booking and paying for a haircut to renewing your annual insurance.
These super apps have become embedded in the local commerce ecosystem and are widely viewed as the operating system of consumers’ lives. If I wanted to order food, pay a bill, book a theatre ticket, or buy a new pair of shoes… it would all start and end in the super app.
In Australia, we have so far only seen super apps in embryonic form. The early rumblings have been most evident in the buy now, pay later sector, where operators started out as a payment smoothing alternative to credit cards and are now the second largest lead source for retailers, preceded only by Google.
But as the Afterpays of the world become more ubiquitous, the need for consumers to begin their buying journey from within their fold diminishes. BNPL providers need to evolve beyond their “accepted here” mentality or risk falling victim to their own success.
Always striving for first mover advantage, Afterpay is racing towards the super app concept with the evolution of their banking proposition in partnership with Westpac; cannily tapping into its customer base to offer deposits, without having to secure its own banking license at vast capital expense and hassle.
THE BIG 4 ADVANTAGE
Arguably, it’s Australia’s leading banks that are best suited to capture the super app opportunity.
They harbor huge market coverage, impressive digital engagement, and significant consumer trust, but routinely sit on treasure troves of expansive transaction data which could be utilised to drive hyper-personalisation for customers.
As traditional marketing loses efficacy, social networks have become increasingly lucrative playgrounds for marketers, yet banks are better able to understand and engage with customers using explicit data surrounding what people have actually purchased, not just what they “like” or “follow”. The major point of difference in Australia and other western markets is the role of government and whether regulation would be imposed to protect consumer privacy and blockade this valuable data.
CBA EMERGES AS TRAILBLAZER
Of the Big 4, Commonwealth Bank (CBA) appears to be most advanced to lead the charge on super apps, despite Westpac’s early head start with the aforementioned partnership with Afterpay.
Although Afterpay has over 3.4 million users and over 48,000 retailers on its platform in Australia, CBA looms larger, with digitally active customers surpassing 7.5 million.
CBA’s most recent update outlined a number of partnerships and strategies that further differentiate the institution from traditional banking propositions. Notably, open banking will be piloted under the new Consumer Data Right (CDR), allowing customers to view account balances from other eligible financial institutions within the CommBank app.
Also announced were minority investments in Little Birdie, a shopping content aggregator that helps customers find special deals when shopping online, and Amber, an energy retailer providing subscription based access to wholesale electricity prices. It is not hard to imagine either sitting within a CBA super app.
CEO Matt Comyn’s stated intention to “move beyond customer service and deliver more rewarding experiences and better outcomes that will build a deeper, more trusted relationship with our customers” has laid the foundation for bringing retail and business banking customers closer together.
While Australia remains a long way behind Asia in the journey towards creation of super apps (let alone mass adoption) the starting pistol has certainly been fired.