In the aftermath of Covid-19, the lure of online platforms driving growth in the future has led to many business groups to go digital. After Reliance unfurled the flag with Jio Platforms, many large traditional Indian corporates, including the Tatas, are looking to launch their own platform, or super app, as part of doing business in a digitised world.

 

Simply put, seven out of 10 most valuable companies in the world are platform companies — from Amazon (valued at $800 billion) to Tencent (valued at $400 billion). With platforms, companies look to enable large and distributed offline businesses and bring their supply on a single platform to offer digital products and services to customers. “They do so by collaboratively, binding various ecosystems — including the firm itself, their customers, their partners — and then create an environment of trust, in which customers engage more freely, share more of their data and in return get benefitted,” said Ashutosh Sharma, V-P and Research Director at Forrester. Case in point: Reliance Jio’s offerings have a headstart with their bouquet of services such as telecom, content streaming, shopping, payments, education amongst others.

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Change in mindset

However, this platform business is not as straight as developing an app with start-up partners, but goes beyond that and involves moving with fleet-footedness, selecting right technologies, cannibalising existing services and changing company cultures.

“The move to create a digital platform will not be easy for traditional businesses and there will certainly be some tough calls to make in the initial days. However, each of them would recognise the benefits of doing so in the medium-to-long term and it would help maintain relevancy,” said Karan Mohla, Managing Partner, Chiratae Ventures. In effect, this entails a huge mindset shift, an area where traditional business groups struggle.

Sharma is of the view that for traditional businesses, moving to a digitally-enabled platform business model is a significant transformation, and must be driven from the top. “The first and the biggest change they need to make is in their culture and leadership. After that they must make hard changes to align their organisation both culturally and structurally to that vision. They must change their incentive structures and invest in the right set of technologies to begin their journey towards becoming a platform,” he said.

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Monopoly question

However, unlike the brick-and-mortar world, the platform world may see the dominance of two-three players who would own more than 70 per cent of the marketshare. Nitish Jain, President, SP Jain School of Global Management, said that a customer would prefer to buy from a leader than from other players as they have choices and usually faster delivery (as they have more delivery points).

So, this does raise the question whether “super apps” could lead to issues of privacy and anti-trust as they become players and referees for the entire app ecosystem. “This could result in a super app being a dominant player in the market thereby creating entry barriers for other market participants,” said Rajat Prakash, Managing Partner, Athena Legal.

On the other hand, Tanu Banerjee, Partner, IndusLaw pointed out that one cannot dismiss the fact the super apps are emerging around the world successfully, and definitely demonstrate that consumer preference is shifting towards the convenience of all-in-one bundled services.

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