Can Gautam Adani win over India with an app? | News Bharat

Gautam Adani is all set to unveil his hyped super app made by an in-house startup, which he wants to be the ‘Ferrari of the digital world’. The portal will launch in the next three to six months, Asia’s richest tycoon told the Financial Times in a recent interview. But Adani seems to have missed the sweet spot where demand for online services is booming during the pandemic. Now the tech industry is in turmoil globally. Meanwhile, competition in Indian e-commerce is intense. Will Adani’s Ferrari get stuck in bumper-to-bumper traffic?

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 Indian airports and is currently building a new terminal and runway for the second facility in Mumbai. In general, 20% of the national air traffic passes through it. If Adani throws in a free ride home — it’s also investing in taxi fleets in cities with airports, according to media reports — it could potentially install its as-yet-unnamed 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. Such as Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Meituan perfected it before Beijing grew nervous about the dominance of its tech titans and made them the target of strong antitrust crackdowns. Last year’s tech crackdown may be easing, but China’s anti-Covid-19 policies continue to slow consumption: Alibaba recently reported a surprise quarterly loss. In Southeast Asia, where the template was successfully copied, investors now demand profitability before expansion. GoTo Group, the Indonesian giant created by the merger of ride-hailing provider Gojek and e-commerce firm Tokopedia, is cutting 12% of its workforce. If the regional outlook is challenging, the evidence from India is not very encouraging either. E-commerce is undoubtedly a success, with Walmart Inc.’s Flipkart. and the Indian websites of Inc. control the bulk 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 as the economy reopens, 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. Paytm, India’s largest digital payments provider, has seen its shares tumble 75% in the year since its initial public offering, the worst first-year performance of a major IPO in a decade, according to Bloomberg News.

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 key hook for driving 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, power and distribution of city gas and edible oils, the rest of his empire has a strong focus on mining, logistics and infrastructure, which don’t necessarily offer too many avenues to connect with end users. Even for the 154-year-old 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, the super app around Big Basket, has been downloaded about 15 million times, according to Apptopia data cited in a Macquarie Capital research note last week. 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 you have to beat. 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 No. 1 retailer and is expanding into financial services. Credit is the glue that holds a successful superapp together, or at least that’s the experience elsewhere in Asia. However, making money from it is difficult. The financial services arm of Grab Holdings Ltd. collected just $20 million in revenue last quarter from $3.8 billion in payment volumes. That translated into an Ebitda loss of $104 million, compared with a profit from shipping and travel, the other two units of the Singapore-based super app.

Expect Adani to be aggressive in its bid to close the gap on its rivals. Adani Enterprises Ltd., the group’s flagship, is seeking to raise 200 billion rupees ($2.5 billion) by selling new shares. The extra firepower can come in handy in boosting the newly created super app. Media reports suggest that Adani could clash with Ambani as India’s bankruptcy court searches for a new owner of Future Retail Ltd., a major insolvent Indian retailer. 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.

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