Ai Editorial: Superapp model and daily relevance, what’s there to gain for airlines?

17th December, 2019

Ai Editorial: Superapps are now extremely popular in various markets of Asia. Be it for refining their own apps in order to thrive in the data economy or being part of a 3rd party superapp,  airlines need to dig deeper to capitalize on the flourishing trend, writes Ai’s Ritesh Gupta

 

The frequency with which Meituan, a Chinese superapp, or Southeast Asia's highly-used daily services app, Grab,  are used for transactions makes them stand out.  

In case of Meituan, the total number of annual transacting users on its platform grew to over 435 million by September this year. Companies like Meituan are already eliciting over 25 transactions per user annually on an average basis. Grab has had over 150 million downloads. These apps have already garnered the attention of established travel e-commerce players, including Booking and even airlines such as Lufthansa Group. Such companies have been exploring the superapp model.  By being more utilitarian, the likes of Meituan, Paytm, WeChat , Grab, Gojek and others are now described as everyday superapps, with most of them operating at the intersection of hyper-local delivery, commerce, payments etc.  And being in the business for five years or so, these apps have also found their way into a relatively low-frequency buy like hotel accommodation or flights.

In its Online Travel 2020 Report, Travelport has accentuated on the fact that OTAs need to deliver immersive experiences by being where the customer is at every point in the journey. It states that a key threat for OTAs comes from the risk of disintermediation from their customers, as the experience with super apps will likely be better.

Learning from superapps

"Our understanding of travel and mobility is no longer linear and transactional," Gleb Tritus, Managing Director, Lufthansa Innovation Hub (LIH) told me in an interaction in August this year.  Other than shaping the product, LIH is also evaluating how customers are getting into superapps/ ecosystems and how they end up using it. It is important for airlines to learn from such companies as rolling out omnichannel capabilities into legacy systems isn’t a straightforward task.  Learning from superapps would help considering that the fact airlines are evaluating possibilities within the mobility space. They are looking at offering a truly interconnected experience via their own digital assets covering all of the transportation requirements.  A key lies in comprehending how a superapp typically tends to improve the traffic for low frequency products, be it for working on entry points for them on the app interface or via cross-selling.  

Another critical aspect is constantly learning about users and evaluating the quality of recommendations and at the same time ensuring all of such experimentation isn’t a complicated and expensive process. How to set up a viable recommendation engine that not only entail preferences of different users but also trending recommendations or habitual behaviour? At the same time, how to run high-performance, low-latency operations.  For its part, Grab has worked out a microservices architecture set up on data streaming with Apache Kafka. This powers the business as well as paves way for a critical source of intelligence.  

  • It is important to comprehend how a superapp integrates data from multiple applications and sources?
  • How data scientists and other analyst take productive decisions?
  • Eventually how to facilitate these data flows to create an experience that matters?

Travelport underlines that superapps “are well positioned to continuously engage those who are already part of its ecosystem by introducing new features and functions that make the app stickier”.  Also, such apps are leveraging “their data to better target products to customers, at the exact time they need them, and OTAs need to combat this”.

For airlines from their distribution perspective, too, the superapps are a welcome development considering that fact they need to support fragmented distribution, rather than continuously drifting and ending up with a precarious situation where one player in Google ends up controlling the whole travel value chain.

It also remains to be seen how the trend of superapps shapes up outside Asia and lends a new dimension to customer acquisition in the travel e-commerce sector in 2020. A player to watch out for is Airbnb. It is definitely one of those brands that the entire fraternity believes can provide a better answer to the fragmented travel shopping experience. The way Airbnb goes about uniting its staff/ teams across product disciplines, making the most of “creative hacks” or managing complexities associated with product designing, it can provide an answer to when to travel, where to go, and what to do on trips.  

 

Keen on exploring topics related to digital commerce? Ai has planned #AncillaryRevenue Conferences in Berlin, Bangkok and San Antonio in 2020:

https://lnkd.in/fGSVujK

 

 

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