Super apps have achieved strong adoption in the tech space in Asia, and there is much talk about super apps becoming the next big trend to disrupt the digital landscape as we know it in developed markets including the US, UK and even Australia – but is this really the case?
According to Professor Scott Galloway, founder of L2 Inc and Clinical Professor of marketing at the New York University Stern School of Business, the super App has been tipped to have the potential to create the first $10 trillion company – but will they take over the world?
So just what is a Super App?
The super app is a mobile or web application that brings together several functions including communication, payments, ordering, shopping and others into one ecosystem – which enables consumers to perform an array of tasks from ordering groceries or booking a taxi, to buying concert tickets in one place.
With consumers becoming more platform loyal, and always looking for convenience and ease of use, super apps are increasingly fulfilling that need. They also allow mobile users to use the service of third-party merchants without needing to download a series of separate apps.
Super app growth in Asia and adoption globally
Super apps have been growing steadily in China, Korea, India and other Asian economies for many years, and now boast massive followings. In China alone, Super Apps Alipay and WeChat each have over a billion active users, along with Gojek in Southeast Asia with 38 million active users.
Super apps originated in China, and nowadays 78% of consumers aged 16-64 use WeChat – and more than half of users spend more than 2 hours on the app per day. Originally, WeChat was developed as an instant messaging app in 2010, but has since evolved to become a one stop shop for everything from social media, to eCommerce, gaming and more, enabling it to dominate much of the time spent online by citizens in China.
WeChat however, unlike other major super apps in Asia, does also have a unique set of circumstances that drove its growth and adoption - as in China, restrictions and censorship of online communication in part also fuelled WeChat’s growth. Put simply, the Chinese government doesn’t allow many apps from the western world to be utilised by their citizens, as they would be unable to monitor their users and impose their censorship policies. This is called the ‘Great Firewall’. This creates a more closed digital network for providers like WeChat to grow and thrive.
While super apps dominate the payments and eCommerce landscape in Asia, they are still emerging locally and globally, with tech giants including Uber, PayPal, Snapchat and others leading the way to service an array of consumer lifestyle needs through a super app type offering.
To understand how these brands are pivoting, we only need to look at players like Snapchat, who has introduced a range of mini-apps for consumers to enjoy, to see the evolution taking place. Historically, Snapchat has been focussed on being a communication tool that enables users to send and receive instantaneous pictures, but it now allows users to play games, communicate in a variety of formats, and even purchase movie tickets.
Key considerations for brands in developed markets Off the back of their rise and success in Asia, and with global tech giants pivoting to become super apps, many brands are beginning to wrestle with what the super app trend means for their brand and how to prepare for it. Some of the key considerations that should be front of mind for brands include:
Change in the competitive landscape: as super apps emerge, they have the potential to re-shape where consumers spend their time online, where they discover products, where they buy goods and services, and how they pay. Super apps also are likely to blur the lines of competition within an industry as non-traditional entrants begin to play within sectors they haven’t historically competed within. For example, a brand that offers groceries today could expand their app offering to enable loan applications, delivery of products and services outside of grocery – and enable consumers to book experiences through third party providers all in the one super app. As a result, brands need to keep an active watchful eye over changes within their market in order to be ready to adapt to shifts in audiences and the way they are procuring products and services.
Adoption and utilisation in developed economies: Technology and internet adoption by citizens in Asia differs demonstrably to developed markets like US, UK and Australia. In the developed world citizens were first exposed to computers then the internet and subsequently internet enabled mobile devices. Whereas in Asia, adoption of technologies early on was slow and it led to many adopting mobiles as their first device and main gateway to the internet – which fuelled growth of the super app as these grew as more consumers embraced mobile technology. In developed economies the market is very different. It is characterised by mature adoption of single use apps by consumers who are wedded to their favourite single use apps that enable shopping, gaming and serve other core needs, which means brands looking to build super apps and drive adoption face a different set of barriers than those operating within Asia. But the differences in the markets, isn’t the only challenge that will drive adoption.
Regulation will also slow adoption: Regulators globally are increasingly focussed on reducing the stronghold of tech giants in key industries. As super apps rise, we are likely to see greater scrutiny over how much control tech giants are exerting over parts of the market and its likely regulators will look to enforce regulation to limit providers ability to dominate spaces like delivery or payments. Furthermore, regulators will be keeping a watchful eye over how these brands are managing privacy in a world where consumers are increasingly demanding for control and transparency over their data.
If you need help to understand how the digital landscape is changing and will impact your business and advice on how to adapt – get in touch to chat about how we can help.