The digital transformation in the Philippines is notably marked by the emergence of superapps, reshaping the landscape of financial services and consumer engagement. A recent report by Publicis Sapient, “Unlocking Growth Opportunities for Superapps in the Philippines,” sheds light on the burgeoning superapp economy in the country, offering key insights and strategies for financial institutions and businesses to harness this growth.
Superapps, versatile mobile applications that consolidate a range of services and solutions under one umbrella, have seen a surge in popularity among Filipino consumers. These platforms are redefining convenience, and offering services like payments, peer-to-peer lending, investments, and more.
Superapps like BPI, GCash, Maya, Grab, Coins.ph, Toktok and Tonik are redefining financial services in the Philippines. These platforms have expanded beyond their initial offerings to provide a suite of services including e-wallets, digital payments, peer-to-peer lending, microfinancing, investments, and insurance.
While these apps are experiencing rapid growth and adoption, the Nomura Research Institute’s “2nd Consumer Pulse Survey” shared that approximately 41 percent of Filipino consumers have faced issues while using e-wallets. Most e-wallet transactions are for everyday, low-value purchases, indicating their integration into daily life. However, security remains a paramount concern.
Users have expressed apprehensions about the safety of their transactions and data, and they find the process of resolving issues and filing complaints challenging. There’s a perceived lack of government support in addressing these concerns, which superapp developers need to consider seriously. However, an impressive 95 percent of those encountering problems continue to trust and use e-wallets, underlining the strong potential of these apps.
Andrew Male, client partner Asean at Publicis Sapient, emphasizes the significance of this trend, stating, “With 63 percent of the population in the Philippines being unbanked and mobile users spending an average of over five hours daily on their smartphones, banking is set to be the largest superapp opportunity in the Philippines.” Yet, this opportunity comes with the responsibility of addressing consumer concerns.
The Philippines’ digital economy is projected to reach a staggering US$35 billion by 2025, propelled by a compound annual growth rate of 209 percent. This growth is marked by a 69 percent internet penetration rate, increased social media advocacy, and a shift towards online purchasing, with nearly 63 percent of users now using mobile applications for e-commerce transactions. A customer-centric approach, focusing on resolving technical and security issues, will be crucial in sustaining growth and user trust.
To capitalize on these opportunities, the report outlines three key growth imperatives: 1) Identifying a winning proposition: Develop a product that meets market needs and has a viable business model; 2) Creating a minimum viable product through collaborative partnerships: Leverage internal and external expertise to quickly test a minimum viable product in the market; 3) Crafting an artificial intelligence and machine learning-driven experience: Use customer data to personalize services and enhance user experience.
While the superapp economy in the Philippines is poised for substantial growth, particularly in the digital financial sector, builders must prioritize user concerns to foster deeper trust and adoption.