Walled-garden super apps are not the future, warns Lazada CEO

walled-garden lazada
Image by Sharaf Maksumov | Bigstockphoto

Lazada CEO Chun Li said on Tuesday that digital companies in Southeast Asia should steer away from creating walled-garden super apps, as this discourages competition.

Speaking at the Singapore Apex Business Summit, Li referred to lessons he learned from his experience in the US and China, where digital companies have thrived due to their openness, and where antitrust behavior  has been criticized and even fined by regulators.

Such an approach, Li believes, will be essential for the growth of Southeast Asia’s digital economy.

“We should work together to build an open network in this digital economy, not a walled-garden super application or platform. All players should focus on what they do best,” Li said.

Li’s comments come as the Southeast Asia region witnesses a surge in the development of walled-garden super apps, led by the likes of Grab and GoTo, that now offer everything from ride-hailing to banking and e-commerce.

Malaysia’s Air Asia, Philippines’ Gcash, and Vietnam’s MoMo have also cashed in on the super app trend, building large digital ecosystems with multiple services.

Super apps are popular in Southeast Asia as they offer an attractive proposition to users, who can access a wide range of services without having to download multiple apps.

However, the regulatory landscape remains soft on these super apps, as authorities are still trying to come to grips with the complexities of the digital economy.

Marissa Lee, Senior Associate, Global Counsel, said that Gojek, Grab, and Sea are all vying to build or buy a variety of digital services in order to turn each of their mobile ecosystems into a “super app” comparable to China’s WeChat.

However, Lee added that it will be difficult for local competition agencies to take regulatory action against these companies, as they are “cautious about using blunt tools to stifle technological innovation.”

The focus will instead be on promoting competition, rather than rejecting major mergers and acquisitions such as the Gojek-Tokopedia merger outright, he said.

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