Adani joins Tata and Ambani in race for elusive India SuperApp

For years, India's biggest conglomerates have watched how Tencent Holdings Ltd and Alibaba Group Holding Ltd have kept 1.4 billion Chinese hooked on their smartphone apps for everything from chatting and shopping to ordering food takeout and hailing taxis.

With a burgeoning pool of digital consumers, these Indian firms have decided to take a stab at developing all-in-one apps for their sprawling consumer businesses. Tata Group, which sells pantry staples, clothes, cars, flight tickets, among other things, rolled out its superapp Tata Neu in early 2022. Then Asia's top billionaire Mukesh Ambani consolidated his massive consumer and entertainment offerings across his Reliance Industries Ltd under MyJio.

Yet, none seems to be more ambitious than Gautam Adani, Asia's second richest man, whose Adani Group aims to have its superapp installed by one in three Indians by the end of the decade.

That target, announced in late May, would represent a 16-fold jump for Adani One, which was launched in December 2022 but still has just 30 million users.

Incubated by the conglomerate's flagship firm Adani Enterprises Ltd, Adani One has mostly been a travel app, letting people book flights and hotels and access services at airports run by the conglomerate. Transactions on the app totaled 7.5 billion rupees ($90 million) in the 12 months ended March 2024, according to the company's annual report.

Given the limited traction gained by Ambani's MyJio and Tata's Neu despite their wider range of consumer businesses, the Adani Group — whose businesses are largely infrastructure and heavy industrial ones — may have set itself a daunting task.

"Unless they invest in a basic Internet service like telecoms and data, entertainment or payments, reaching such a large audience is not possible," said Kashif Ansari, assistant professor of banking and finance at O.P. Jindal Global University. "You need a brand presence that goes beyond a billion people to get a fraction of them onto a digital app."

Growing digitization is pushing India's biggest conglomerates that once operated in discrete sectors into the same battlefield of e-commerce. The country's world-leading economic growth is expected to spawn another massive consumer market after China, and with more than a billion Indians forecast to own a smartphone by the end of the decade, the domestic online shopping market is likely to reach $450 million, according to RedSeer Strategy Consultants.

Both boasting more than 1 billion users, WeChat and Alipay have demonstrated how all-in-one apps can lock consumers into companies' ecosystems by offering a range of services from shopping and travel to health care and banking.

Pushing for the superapp's widespread use is the latest comeback effort by the Adani conglomerate after a broadside by short-seller Hindenburg Research triggered a stock selloff last year that shaved more than $150 billion off its market value at one point and prompted regulatory probes.

The company is said to wade into mobile payment by applying for a license to operate on India's public digital payments network, the Unified Payments Interface, The Financial Times reported in late May. This would help attract more users and allow the company to process payments for the various services it provides, removing third-party charges.

In early June, Adani launched a credit card with ICICI Bank Ltd that gives cardholders access to airport lounges, shopping vouchers and reward points. Meanwhile, it is also working with Alphabet Inc's Google, Microsoft Corp, SAP SE, ICICI Bank, CitiBank and payments firm Pine Labs Pvt to build its digital strategy, it said in a May 2024 presentation.

The Adani Group didn't respond to Bloomberg's request for comment.

Chart: Bloomberg

Ferrari of the Digital World

Months before Adani One's official launch at the end of 2022, Adani challenged the company's young software developers to turn the app into "the Ferrari of the digital world". Its latest target of 500 million users — if achieved — would turn Adani One into one of the most widely used apps in India, along with mobile payment service PhonePe, WhatsApp, and YouTube.

Consumers in India are already texting friends, streaming videos and shopping for groceries on these apps, making analysts wonder what Adani One can offer to get people to sign up on it.

"Other than airports and utility, Adani does not have many consumer businesses. Even airports are a niche business and will have limitations because it relies on frequent flyers and discounting," said Karan Taurani, senior vice president at Elara Securities India Pvt Ltd.

Lack of seamless user experience has also crippled widespread use of Indian superapps. Following Tata Neu's launch in April 2022, users have complained about operational glitches, prompting the company to make additional investment to improve its functions.

Similar to Tata Neu, Ambani's MyJio aggregates Reliance's various consumer businesses ranging from telecoms and broadband services to online movies, music, groceries and fashion. His financial arm Jio Financial Services Ltd also launched JioFinance for digital banking and payment in May.

While both Tata and Reliance have big consumer brands with wide geographical reach, their super apps are yet to contribute a significant share of revenues to each business.

"Getting the business onto a digital platform is a first, but easy step. Data management between online and offline users and inventory management is not going well. Most superapp players are still operating in silos," said Abhijit Majumdar, Mumbai-based partner at PwC India.

Crowded Space

Adani believes its role as an energy supplier could help gain customers. The company supplies electricity and natural gas to over 13 million Indian households while the group also operates gas and electric vehicle charging stations, especially in its home state of Gujarat. It also sells edible oils, raw ingredients and processed foods under the Fortune brand, operates an extensive fruit distribution network across the country and runs a real estate business.

The company hopes all these could eventually allow it to reach "several hundreds of millions of end users," according to people familiar with the company's plan.

As much as Indian conglomerates would like to use one app to break silos of their sprawling businesses, the country's data protection law may add uncertainties to superapp's potential.

Financial regulators have made it clear that cross-sharing of customer data within the same financial institution is not allowed, and there are concerns that this rule could be applied to the digital space. Should that happen, "companies will need to rethink the feasibility of superapp strategy," said Shalabh Saxena, a partner at consultancy Grant Thornton Bharat.

"Though the app downloads have been increasing in recent months, it is a crowded space," said Elara Securities' Taurani of Adani One, "It is hard to see how they will distinguish themselves."