Why Asia’s super-app companies are struggling to succeed
Tech giants in America sometimes express their disappointment in the absence of “super-apps” in the Western market. These are versatile online platforms that offer a wide range of services. However, despite the global interest in this business model, existing super-apps in Asia are facing significant challenges.
One Asian consumer-tech company has defied the current trend. Paytm, an aspiring Indian super-app focused on digital payments, has experienced a 60% increase in its share price. Nevertheless, the stock is still less than half of its all-time high, which was achieved shortly after its initial public offering in November 2021, and the company has yet to generate a profit. Nonetheless, the rising share price of Paytm may indicate that it possesses something that other Asian companies lack: a single, large, and expanding domestic market to operate in. Whether this potential for scalability is sufficient for Paytm to secure a more sustainable future remains to be seen.
The concept of a company utilizing a single platform to offer a variety of services to consumers is appealing. However, after more than a decade of discussions about the imminent dominance of super-apps, many Asian firms are still struggling to strike a balance between size and profitability. Given the ongoing high funding costs, it is difficult to envision a swift recovery for these once-favored tech companies. ■
2023-06-29 09:38:40
Link from www.economist.com
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