Super-apps are the ambitions of many tech giants in Silicon Valley, but are considered difficult to implement in the West.
The super app – an app that performs many different tasks and functions – is now quite popular in many countries such as WeChat with over a billion users in China, Careem in the Middle East, Rappi in Latin America and Grab in the East. South Asia also aims to attract hundreds of millions of users.
Tech CEOs want to replicate this model in the West. Last month, Meta was reported to be looking to turn WhatsApp into a super app to increase revenue when the metaverse gamble was too risky. In the middle of the year, Elon Musk said that buying Twitter would cater to his “super app X” ambitions. Most recently, Microsoft is also considering building super apps to encroach on consumer services. In addition, Evan Spiegel of Snapchat also harbors similar intentions.
Mobile payment barriers
To date, there are relatively few statistics on the size of WeChat. However, data from Mary Meeker in 2017 shows that the time Chinese people spend on this app totals 1.9 billion hours a day, more than any other app in terms of time. .
Earlier this year, Musk described WeChat as “Twitter plus PayPal and so much more, all in one”. At Meta, Zuckerberg wants the same thing. He failed with the Libra/Diem payment project, but other products such as Instagram and WhatsApp are thriving in payment and e-commerce functionality.
According to Media, Culture & Society, the core to the success of a super app is the payment function. However, this is a difficult problem for Silicon Valley to solve.
Paying for everything through a single smartphone app in the US is relatively rare. According to research by eMarketer, half of phone users in the US will accept mobile payments by the end of 2025. Meanwhile, 64% of China’s population has done so since 2021, according to China UnionPay.
“Companies will have a hard time creating the glue needed to make a super app work the way WeChat did: combine services and payments to make sure people don’t have to search for new services.” discrete functions elsewhere,” commented one expert.
America is not China or India
In a 2020 white paper from Canada-based asset manager CPP Investments, mega-apps in Europe and the US are “expected to develop differently” than in Asia or Latin America, where there are “severe developments”. critical infrastructure vulnerabilities” and electronic payments are not common. In India, for example, almost a quarter of adults don’t have a bank account, so super apps can easily attract a large number of users to the “all-in-one” world. In China, smartphones are the first Internet access device for most of the population.
Meanwhile, in the US and Europe, users have a lot of options for payment. Therefore, a new super application will be difficult to accept at a large scale, especially when it is too complicated due to integrating many features, and people are too used to the old one.
Management Wall and Apple
Building a Silicon Valley super app will also face two other hurdles: government regulators and the App Store.
In the US, under President Lina Khan, the FTC is focusing more strongly on competition and user privacy. The creation of super apps will almost certainly lead to a series of corporate mergers that will fall under the radar of watchdogs and regulators.
Apple is also the reason super apps are hard to come by. According to CPP Investments, the App Store can make or break an app because it’s a popular platform, known for being rigorous and impactful. “Apple may not approve apps that require the types of device permissions they need to function as a super app,” the company’s white paper states.
In addition, being too dependent on a super application can also be a downside. Before that, millions of people in Korea “liked back to the 2G network era” when the KakaoTalk super application crashed and stopped working. CNBC assessed, the collapse of KakaoTalk exposed the disadvantage of the convenience of “everything in one”. Depending on a single application causes users to be annoyed, passive, and even panic if that platform has an inaccessibility problem.
“Obviously, there are a lot of obstacles on the way to a Silicon Valley superapp. But the opportunity that a superapp offers is also very attractive.