The rush to build the next super app
Everything you need to know as a founder is right here
Imagine shopping malls and think about why they are popular— a fabulous one-stop destination for all your needs and includes all your favorite brands.
Now imagine an app like that for your phone, but even more convenient and fast.
When you get a new phone, instead of remembering countless logins and passwords across even more countless apps, you authenticate once to one app, and all services are served to you on a platter.
Some of you might already be living in such a utopia— That’s what a super app is. Beyond the traction it is recieving in Asian economies, it sure is convenient for users.
It is generally considered to be the silver bullet to less fragmentation, less friction, and high convenience.
With such wide consensus, the lack of ubiquity of super-apps on a global scale, especially in the West, sure is head-scratching.
To know why, one must know how one forms in the first place, what connects one to all its features, and everything in between.
How to make your own super app
Making any multi-purpose product is not easy. Most super apps didn’t set out to be one when they launched. There is always the risk of bloating up an app to the point of ruining the experience.
But if you are set on providing multiple services in one app right from the get-go, there are steps you can follow-
Step 1- A core offering will invite users
The app you are making must start with the main offering, which solves users’ problems and, at least in the initial stage, serves as the face of your app.
It is unwise to start with multiple unrelated services right when you begin. You should first master and build a brand around one from where you can expand horizontally and vertically.
In other words, the super app ambition should be the means, not an end to the users’ problem.
Step 2- A social or utility hook will keep them coming
While your core offering will gather eyeballs to your product, this next step will keep them coming into your app. Generally, users consider even one extra app as too many on their home screen, especially from a novel brand.
They need a reason to not only keep coming back but also look forward to doing so. That’s how a social or utility hook works.
A social hook can be like how most of Meta’s products work, where users have to come back to stay connected with the world or with their own world.
A utility hook can be like how Gojek or Grab conquered the market. If there is a utility your app fulfills for which the consumer has to open the app every time, then repeated footfall is a guarantee.
Step 3- Multiple “Too Good” Services — the path to a super app
Now that you have enough users, it is time to start branching out. The organic way, till now, has been by expanding into verticals of their core offerings.
Apps offering hyperlocal services like cab bookings branch into food/grocery deliveries, Uber being the most prominent example. Thanks to its existing network of drivers in the market, Uber pivoted from ride-sharing to food delivery, solidifying its position on users' home screens regardless of whether they go out or stay in.
And that’s the key. Be an indispensable tool in your users’ hands. Offer an unparalleled service but while doing so, don’t lose sight of the big picture.
If you offer just one service well, you risk narrowing your potential in the market.
Here, the example of Google shines.
It appears almost mandatory to have a Google account anywhere outside of China. All while being relatively open compared to others as many of its main products— Search, Video, and Android— are not severely handicapped without an account. So how do they do it?
It’s the combination of Google’s leadership in multiple products, including YouTube, Workspace, Google Assistant, Chrome, Gmail, etc., and the benefits a sign-in provides in them that makes users worldwide persceptible to signing up for one inevitably.
That’s what you have to achieve.
Step 4- Third-Party Integration - The Holy Grail
Of course, not every small start-up entrepreneur needs to look at one of the biggest tech giants with trillions in valuation as the standard.
If you are the humble founder who set out to fix an everyday problem, being forced to manage 50 different businesses is not only a painful ask but might also risk you getting distracted from your core offering.
Beyond that, offering multiple services in-house will also put you in a head-to-head competition with multiple established players directly. Not ideal.
Needless to say, any business administration graduate will tell you that putting more administrative effort to face a more competitive load is a bad idea, if not an insane one.
A super app must strive to lower its competition as much as possible
As explained by Aditi Sharma, Indonesian Grab Ventures’ Head of Investments & Programs, doing everything by yourself is not only impractical but also threatening to other players.
Thus, the accepted strategy for a super app is to be more a platform for third-party services in a mutually beneficial agreement. It is the holy grail and the final stepping stone to be a true super app, equivalent to the operating system itself.
WeChat is again, till now, the only service that has mastered this beautifully with mini-stores where millions of brands offer their services.
Must Haves
No two super apps can be the same given how complex they are and how different each market they operate in is.
But a close inspection does put out two components, already discussed to an extent— the Social component and the Utility component. You are free to provide one of or both of them. The direction you go in is naturally defined by the core offering.
Whichever direction, every wannabe super app is seen to strive for these basics to ensure they achieve their goals-
A flawless User Interface
A super app needs a strong enough user base for it to be perceived as such by both users and businesses alike. Businesses will work with your app only if they see better reach or return on investment than their own in-house solution.
If your app is made well, that is, utilitarian enough or socially engaging enough, you will be targeting 100% of the users of every market you enter. That means everyone from youngsters just stepping into college to retirees awaiting their pension will be using your app.
Thus, it is imperative that your app is as user-friendly as possible. That means no complicated menus and intuitive but functional workings.
Wallet— Key to the Utility Hook
It goes without saying, but the super app business is investment intensive. From the third-party negotiations to the actual servers and developers employed, costs add up quickly. Like a giant pit hungry for cash.
While this craving will be sustained in the initial years through ambitious investors, willing to overlook a short-term loss-making business, aiming for a long-term cash grab, they too will inevitably be hungry for a profit. In other words, you need to recoup your losses and make revenue as soon as possible.
Though much of the internet is centered around advertisements, users are not that tolerant of ads in functional apps like the one used to pay their electricity bill.
If your app is to pose for an operating system, the potential for you shoving ads in significant parts of your app is limited, to say.
It comes as no surprise then that all super app wannabes have tackled this by trying to replace the middleman between their wallet and the end transaction.
Doing so means removing the crucial friction in the multiple routine transactions inside your app. Whether that’s to pay bills, buy tickets, or send money to a friend who wants to pay their bills and buy a ticket, a mere 2-second gap to switch from your app to the payment provider can easily lower the number of transactions from billions to a few million.
Apps like Uber and Grab, which started as utilitarian services, have this figured out because they are already associated with payment. Thus, any third party wanting to plug its service will find its customers more poised to pay than other apps.
Free service based apps like most of social media struggle heavily here as we see the slow adoption of WhatsApp Pay or SnapCash and, more recently, the uphill battle X (formerly Twitter) faced when trying to carve a financial app out of a short text-based social media app.
Chatting— Base of any Social Hook
Users around the world increasingly spend time on their social apps. Messaging is one of the main components of social exchanges and is used for more than just chatting.
Something about the chatting interface is very comfortable and convenient for users, as demonstrated by the recent wave of AI being in the form of chatbots. Case in point, the world’s first and most successful super app, WeChat, began as a chatting app.
Having a chatting component means the app provides a built-in functionality for users to communicate with other users and businesses alike, which facilitates transactions to either start or end in your app, thereby exponentially increasing your app’s convenience.
What’s in it for me?
The benefits for users and third parties wanting to integrate are apparent enough. But what about you? What will you be getting? Host platforms often fail to turn up profits themselves as all parties expect them to charge nominal fees for their services.
Google and Apple fought lengthy court battles around the world, justifying both to users and even big corporations like Spotify and Epic the existence of the 30% cut their respective app stores take.
Thus, much before it pops to an investor, it might dawn on you to wonder about the actual tangible opportunities having control of a super app gives you.
All Data in One Basket
The more screentime your apps get, the more data you get. And given the quick and efficient nature of the utility component of your app, it is solely the job of the social component to increase the screen time.
That is judged by how engaging your app is either through social features or through entertaining content but stands true for any social media or entertainment app, respectively.
So whether user-generated, licensed, or in-house produced, the content needs to be engaging enough to attract the millions of users you are trying to attract.
Don’t downplay the utility component just yet, though.
A super app used for utility purposes like various forms of payment or to access civil services also inevitably collects extremely sensitive and private data of its users.
Apart from the huge responsibility this will entail to both process and secure that data, there is also the incredibly lucrative opportunity to use that data.
Knowing what users are doing on a super app is valuable information.
Beyond just pointing this goldmine made from both or either componenets to the highest bidder (hopefully preserving user privacy), it can also be pointed towards the development of your own products and services as well as the proactive response to any rising threats better than any other app can.
Amazon has been accused of propping up its Basics Lineup of products exactly via this route.
A cross seller’s dream
As mentioned before, there is a reason why businesses cannot avoid working with an established super app. The potential for customer acquisition is too high to ignore.
But that potential also applies to the host app in the form of cross selling. Convincing users to install another new app has always been a challenge. But if an app already installed adds a new feature, it gets lots of eyeballs very quickly and very easily.
Healthy ARPU
Aside from the increased time spent on your app, the status of a super app also means increased revenue that you can extract per user. Also called Average Revenue Per User (ARPU).
Because of the trust you build with users and the convenience you offer, users will gradually and naturally feel more and more comfortable spending on your platform.
The comfort of payments soon turns into luxury and habitual payments.
It is no surprise that WeChat has the ARPU of $7, or 700% that of WhatsApp, despite having a 30% smaller user base and operating in fewer countries.
The intangibility of online payments already makes consumers spend more subconsciously. The added convenience and speed in a super app boosts overspending exponentially.
Your only goal post that achievement will be to maintain the trust users place in you and to keep pushing the convenience of payments to its absolute limits.
Integrated services
The appeal of integrating different aspects not only makes life easier for users but for your host app, too. Think Gmail and how convenient it is for Google users to pull in a file from the Google Drive to share it.
Each new service pulls extremely valuable information like user statistics, account information, and configurations from the existing family of services.
Thus a new service on your platform creates convenience out of thin air merely by existing in the ecosystem of your super app.
This can be true regardless of the service being in-house or not. Thus, the user will feel an even greater pull to not only use your service but keep using it as the amount of data they store on you pile up and the integrations get stickier.
No Super App in the West?
Super apps are popular in Asian countries like Indonesia and China and have even caught steam in other markets like Africa with M-Pesa and TemTem or Latin America with Rappi.
Yet no strong contender for the North American and European audiences. Given how expensive it is to develop and maintain a product like this as discussed, Western strengths, such as access to cheaper capital and tendency to innovate at least in the US, should be great catalysts to the super app concept, yet it isn’t.
Hopefully, it should be easy to figure out now why-
All the steps mentioned above are just harder to pull off in a heavily regulated, competitive and mature technology sector of the US and Europe.
Unlike Asia, the Western technology market is not a suitable environment for a super app.
A true super app should not have major competition for a lot of its services and especially not with its core offering. It also needs trust of users, creators, and businesses alike who will populate these apps with genuine engagement, content, and functional apps, respectively.
Apps like WeChat lived in a regulatory vaccum where the Chinese Government essentially turn a blind eye to its dominance, while services like the Indonesian Grab lived in a competitive vaccum, as its own growth dwarfed the emergence of its competitors, in an economy not ranking high either by access to cheap capital or by innovation.
Competition does exist in the form of the GoTo group, providing its own super apps like Gojek and Tokopedia, but the competition is still relatively weak.
The success of a super app also seems to be tied to growing technological economies rather than mature ones like in the West. Users are not stuck in existing walled gardens of the apps, and the overall competition is either nonexistent or just less intense making them ripe for capture.
All of this doesn’t exist anywhere in the West. The opposite does.
So what’s next…
Fragmentation in the technology space is not here to stay for long. Super apps, or at least some form of them, are the future.
The concept of a super app is nothing groundbreaking. Several Silicon Valley giants have tried their hand at becoming one.
In the next part, I will talk about some of these attempts and also discuss what the actual implementation of the super app will look like in the West and beyond.
The super app space is incredibly interesting, both due to its potential for convenience on one side and the scary potential for dominance on the other. There are many deep-rooted reasons for its appeal to companies, though.
This and much more to be discussed in the next part…