They’re called super apps. They’re a one-stop shop on your phone’s home screen – a single portal into a dizzying array of services. Apps such as WeChat, Grab, Kakao and Rappi have become ingrained in people’s lives in much of East Asia and they’re fast becoming popular in Latin America too. These products offer great convenience and versatility, so why haven’t they conquered the West yet?
Both Europe and North America have yet to see any app that integrates communication, entertainment, ecommerce and payment services for a mass market. The reasons for this are historical, says Hugh Fletcher, global head of innovation at digital marketing consultancy Wunderman Thompson Commerce.
“The maturity of western economies has been a barrier to super apps. The low penetration of bank accounts in Asia has aided the rise of WeChat, for instance, but consumers in the West tend to have long-established relationships with banks and retailers, which makes it harder for them to trust virtual providers,” he explains.
If you own the interface, you own the customer. If you own the customer, you own the data. And, if you own the data, you can define the future
Another reason for the success of super apps in many Asian countries is that they have leapfrogged intermediate technologies. For many people in China, for instance, their first contact with the internet occurred through a smartphone rather than, say, a PC with a dial-up modem. At the same time, a huge unbanked population started paying for goods and services using mobile apps. Government backing for the technology has often played a key role in its uptake too.
“The digital boom in Asia has created a virtuous loop of commerce, payment and lifestyle,” observes Michelle Du-Prât, group strategy director at brand design agency Household. “But it’s been a different story in the UK.”
According to a recent YouGov survey, fewer than 10% of British consumers have gone fully digital with their banking and a quarter are uncomfortable with the idea. Fletcher believes that “this level of mistrust is too significant for a super app to flourish here. Our ties to existing suppliers are also too strong for us to jump into bed with a new tech company offering myriad services.”
While western consumers’ ingrained loyalty to long-established brands won’t help a super app from gaining traction, neither will the West’s tendency to regulate markets to ensure fair competition. It’s one of the reasons why the conglomerate, multi-category business model hasn’t thrived here as much as it has in Asia.
“Western economies have a long record of breaking up, or limiting the growth of, companies that become powerful. On the basis that it promotes consumer rights and encourages innovation, this approach can be said to have broadly worked,” says Nick Cooper, global executive director at brand consultancy Landor & Fitch. “If a super app were to appear here and do incredibly well, in all likelihood it would be challenged and broken up.”
Feature-rich apps are blossoming in the West
There are a couple of factors that could work in the super apps’ favour in the West. One is the rise of its post-millennial generation of digital-first, brand-agnostic, convenience-seeking consumers. Another is that the Covid lockdowns have prompted huge swathes of the population – young and old – to try new channels of online consumption.
As Fletcher observes: “Most of us never thought that we’d watch sports through Amazon, order food through an aggregator’s app or buy clothes on a social media platform.”
Amazon is, arguably, the closest the West has to a one-stop-shop app, although Apple too has created an extensive ecosystem for consumers that’s continuing to expand.
Ben Davis, an editor and strategist at Econsultancy, points out that Uber’s CEO, Dara Khosrowshahi, has “made it clear that his company is intent on developing a super app service. Big companies are also building feature-rich apps to be more customer-centric, even if these aren’t necessarily super apps. Emirates has done this, bringing together booking, in-flight entertainment and frequent-flyer accounts.”
Expect more aggregation, yet differentiation
Western consumers won’t be able to log on to a domestic WeChat any time soon, but the arrival of interconnected aggregator apps offering users better, easier and faster ways of doing things is on the cards.
“These provide a truly 360-degree view of a consumer and their behaviour. A super app enables an organisation to own the interface with the consumer,” Fletcher says. “If you own the interface, you own the customer. If you own the customer, you own the data. And, if you own the data, you can define the future.”
The super app concept is also based on establishing a digital identity, which is integrated with payment and banking provisions. This is then connected to your profile and shopping habits. But the idea of consenting to such a high level of integrated digital intimacy still makes many westerners uncomfortable, as Sean Farrington, VP for interactive design at LiveArea, notes.
The level of mistrust is too significant for a super app to flourish here
“There is a general concern regarding technology, privacy and trust,” he says. “It will certainly take more time for the public to warm up and embrace services like this.”
Tensions between Apple and Facebook grew in April when an update to the operating system for iPhones and iPads gave users a privacy option that prevents their online browsing activities from being tracked – a critical activity for data-hungry advertisers or, indeed, any super app.
A cure for the West’s reluctance to adopt super apps may eventually come from the fintech sector. Potentially, open banking and partnerships between big tech and big banks could lead to the bundling of services.
Google Pay’s recent partnerships with Safeway and Target to offer money-saving grocery deals for the app’s users “also demonstrate a move towards owning more of the customer’s day, linking commerce directly with payments to drive personalised convenience,” Du-Prat says. “A super app is as much a convenience destination as it is a space for collaboration, inspiration and innovation.”
And therein lies the rub: western consumers are still too sceptical and entrenched in their behaviour for a dominant super app to emerge today. The promise of convenience simply isn’t enough to trump all concerns. But equally, a market that’s so competitive is open to disruption, so don’t write off the super app of tomorrow.
