Is the West ready for super apps?
On 23rd July, Elon Musk announced that Twitter would lose its iconic bird logo – and eventually the name Twitter – as the company rebrands as X. The internet had strong opinions about the change but what is clear is that the rebrand is part of Musk’s vision to evolve Twitter from its current model into a super app, along the lines of China’s WeChat. For example, in May 2022, Musk told a podcast that super apps “need to happen” in the US and that he could “convert Twitter to that”, citing WeChat as the model he wanted to follow. In June 2022, Musk said during a Q&A with Twitter employees, “You basically live on WeChat in China”. In October 2022, Musk tweeted, “Buying Twitter is an accelerant to creating X, the everything app”.
What is WeChat?
In China, WeChat is synonymous with the internet – at least for its one billion monthly active users who account for more than 70% of the population. The app is used for chatting to friends but does much more than that – including the ability to shop online, book flights, hail cabs, watch movies, play games, make payments, read news, and be used for ID plus access to government services. In short, it’s a super app or as Musk puts it, an everything app. For many people in China, WeChat is the internet. WeChat was founded in 2011 as a messaging app for mobile devices. It quickly expanded into payments and gaming (WeChat is owned by Tencent, a major playing in gaming), then added mini-programmes or third party apps housed within the platform, expanding its capabilities. Today, WeChat supplies and controls the infrastructure that underpins this ecosystem. WeChat benefited from clever initial features and marketing. For example, an early feature allowed total strangers to connect with each other in China’s dense metropolitan areas. The feature was called WeChat Shake – all users had to do was wave their phone back and forth and the app would search for others nearby doing likewise who were looking to make a new friend. In 2014, WeChat allowed users to send virtual versions of the red envelopes of cash (hong bao) traditionally given on Chinese New Year via the app. Millions of virtual red envelopes were sent that year – fulfilling the marketing objective of encouraging WeChat users to link the app to their bank cards. (Since then, the number of virtual red envelopes sent each year has grown to over one billion.) There isn’t a Western app similar to WeChat – hence the gap in the market which Elon Musk now wants to fill.
What other super apps are there?
While they haven’t caught on in the West, super apps are popular in Asia, and can also be found in Africa and Latin America as well. Examples include:
- Alibaba’s AliPay (China) – which began as a payment service but now offers numerous other features
- Grab (South East Asia) – which started as a ride-hailing service but again, now offers multiple other features and which uses the slogan, ‘the everyday everything app’ (an unconscious echo of Harrods’ 1912 slogan of Omnia Omnibus Ubique, or ‘everything for everyone, everywhere’
- Gojek (South East Asia) – which started as a delivery app, but now encompasses logistics, payments, and other online services
- M-Pesa and temtem (Africa) and Rappi (Latin America) have similar origin stories
The West hasn’t produced a super app of its own, though we have seen companies expand the services of their apps into other areas, such as Uber expanding from ride-hailing to food delivery. Elon Musk is not the only person to recognise the potential of super apps, with Microsoft and Meta reportedly making a push.
Why did super apps develop primarily in Asia?
WeChat – the ultimate super app – filled a specific void in China, and the factors which shaped its development were less applicable to the West. WeChat succeeded because: Many Chinese internet users went straight to mobile In China and other Asian countries where super apps have been successful, widespread access to the internet didn’t take place until relatively cheap mobile devices were accessible to the population. As a result, many internet users bypassed desktops and went straight to mobile. By contrast, in the West, internet users were used to performing different tasks across many different websites via their desktop by the time mobiles became ubiquitous. Credit cards v digital payments A largely unbanked population in Asia bypassed credit cards – the most common form of in-person and online payment in the West – and went straight to mobile wallets. Cultural differences As a generalisation, Eastern cultures tend to be more collectivist, whereas Western ones are more individualist. Arguably, it is easier for one app to have broad appeal in a collectivist culture than it is in an individualist one. The concept of high context versus low context cultures is probably relevant too (you can read Oban’s explainer on this topic here). Regulatory scrutiny Scrutiny of Big Tech has tended to be higher in the West, with both governments and consumers sceptical of how data is collected and used. As a result, Western apps have faced tighter regulations which inhibit the creation of super apps.
Why does Elon Musk want to turn Twitter into a super app?
Aside from a gap in the Western market, there’s the fact that Twitter in its current form doesn’t generate much profit. In the ten financial years between 2012 and 2021, Twitter made a loss in eight of them. It last reported a profit in 2019. Elon Musk paid $44 billion for Twitter in 2022; in 2023, Fidelity (an investment company and former Twitter shareholder) valued the company at $15 billion. (Musk conceded in an April 2023 interview with Tucker Carlson that buying Twitter “wasn’t financially smart”.) Drawbacks of Twitter’s current business model are:
- It doesn’t allow for the same degree of ad targeting as other social media platforms. The ads also tend to be easy to overlook – it was telling during the (partial) advertiser boycott following Musk’s takeover that some Twitter users expressed surprise that Twitter even had advertising, so easy are the ads to scroll past without noticing
- You can’t buy anything on the platform
- Attempts to introduce a subscription model (i.e. asking users to pay for enhanced features or memberships) haven’t proved successful
It’s also undeniable that Twitter in its current form can be an angry place, where polarising or divisive debates play out, and where hostile or aggressive language is widespread. (One memorable description of the Twitter experience is that “it’s like witnessing a collective nervous breakdown in real time.”) Some brands may feel that it’s not the right platform for their key messages. Faced with a business model that struggles to make money, it’s not surprising that Elon Musk wants to evolve the platform to something else – and sees the creation of a Western super app as a big opportunity.
Could a super app succeed in the West?
So, there’s a gap in the market, and Elon Musk has the user base (Twitter has approximately 400 million active monthly users), the technology, and the ambition. Could he succeed? Anything is possible, but reasons to be sceptical include: Firstly, do Western consumers want a super app? Of course, if you build it, they may come. But consumers in the West are already used to using different apps for different purposes – shopping, watching videos, socialising, payments etc. While there is some overlap, we are used to keeping those aspects of our digital lives separate. Are Western users yearning to tweet on the same app they use to pay their electricity bill (for example)? Second, could there be legal hurdles? It’s fair to say that regulators in the US and Europe are not overly thrilled with how much power tech companies already have over our lives. The prospect of a super app which mimics the functions of WeChat – and the vast amounts of consumer data that entails – could well face regulatory hurdles in the West (especially the EU). Third, consumer trust in social platforms is already low We all use social media – but there is greater awareness now of its negative aspects. It’s routine on Twitter for users with large followings – often household names – to tweet how much they dislike using the site (the word ‘hellsite’ is frequently used), with regular announcements from people about their need to take a break from it for mental health reasons. Will Western consumers want to link their financial and other sensitive information to an app like Twitter? And it’s not just consumer trust – the third parties who create the mini apps within a super app have to trust the platform too.
A Western super app might not be like WeChat at all
It’s possible that any eventual Western super app won’t take the same shape or form as WeChat or others like it. For example, it could be industry or vertical-specific – such as a super app for healthcare which incorporates third party apps from health insurers, doctors, pharmacies, wellness services, and so on. Just because WeChat started as a messaging app, doesn’t mean that super apps have to start from there or follow WeChat’s model. Deloitte predicts it won’t be a winner-takes-all market. Instead, it foresees that we could end up with three to five super apps with overlapping features. Deloitte also considers the possibility that we could end up with apps that aren’t necessarily super apps, but still perform multiple functions within one industry-specific vertical (such as the healthcare example above, or car ownership, or parenting and so on). Clearly, Elon Musk didn’t become the wealthiest person in the world without a high level of business acumen. Time will tell if he succeeds in his desire to create the West’s first super app.
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