Adani’s superapp will have to face a bunch of challenges | News Bharat

The mobile app will connect passengers across Adani’s network of airports with other services offered by its group, the FT said. This may be the easiest way to accumulate downloads. Adani operates seven airports and is building a new terminal and runway for the second facility in Mumbai. In general, 20% of the country’s air traffic passes through them. If Adani throws in a free ride home — it’s also investing in taxi fleets in those cities, according to media reports — it could launch its app on millions of phones.

This is just the first battle. The second will be more complicated – getting users to come back for other things. Bringing together shopping, payments, entertainment, social media and finance in one place is the Chinese model. The likes of Alibaba, Tencent and Meituan perfected it before Beijing made them antitrust targets. Last year’s tech crackdown may be easing, but China’s anti-covid policies are a drag on consumption: Alibaba recently reported a quarterly loss. In Southeast Asia, where the template has been copied, investors demand profitability. Indonesia’s GoTo is cutting 12% of its workforce. The evidence from India is also not very encouraging. E-commerce is booming, with Walmart’s Flipkart and Amazon controlling most of the growing market — more than 60% of the billion-plus visits to Flipkart’s site during its eight-day Big Billion Days festival last quarter came from tier 2 and 3 cities . But some of the more niche categories that gained popularity during the pandemic, such as education, beauty and fashion, are either disappearing or not growing as strongly as before. Amazon is closing its business to prepare for tests in the country and exiting food delivery. Shares of Paytm have fallen 75% in the year since the initial public offering, the worst first-year performance of a major IPO in a decade.

Online grocery shopping is on the rise, but Adani’s rivals – Tata Group’s Big Basket and Mukesh Ambani’s JioMart – have an early lead in what is seen as a hook to drive customer interaction. Pharmacies are growing fast and here too Ambani’s Netmeds and Flipkart’s Health Plus are doing well. Adani’s consumer-facing web presence is limited. The Ahmedabad-based group acquired a significant minority stake a year ago in Flipkart-owned travel booking site Cleartrip. All the more reason to make transportation a fulcrum of its superapp ambitions.

How fast can Adani hope to grow? With the exception of airports, electricity and city gas distribution, and edible oils, the rest of his empire has a strong focus on mining, logistics, and infrastructure, which don’t offer many avenues to connect with consumers. Even for the Tata Group, which deals in everything from salt and tea to automobiles and airlines, mastering customers in the digital world is proving to be a tough job. Tata Neu, its super app around Big Basket, has been downloaded around 15 million times, according to Apptopia. That’s a modest number in a country that will have 1 billion smartphone users by 2026.

The Tata Neu won’t be the only competition. Adani’s bigger rival will be Ambani, who built his digital moat during the pandemic when money poured into tech. Asia’s second-richest businessman has access to 428 million telecom users through his Jio mobile network. Ambani is also India’s top retailer and is expanding into financial services. Credit is the glue that holds a superapp together, drawing on experience elsewhere in Asia. However, making money from it is difficult. Grab Holdings’ financial services arm received just $20 million in revenue last quarter from $3.8 billion in payment volumes. That translated into an Ebitda loss of $104 million, compared to profit from shipping and travel, the other two units of this Singapore-based super app.

Adani Enterprises Ltd, the flagship of the group, is looking to increase ₹200 billion equity. This can be useful for the newly created super app. Media reports suggest that Adani may clash with Ambani as India’s bankruptcy court searches for a new owner of Future Retail. Such sudden acquisitions may make more sense than trying to build a new business from scratch. While investors and bankers remain bullish on Adani’s finances, a worsening squeeze on global tech funding may even work in the billionaire’s favor. Whether India will ever be a market dominated by a few universal mobile apps remains an open question.