Super Apps — The Silent Disruptors
Silicon Valley has always been seen as the West’s incubator for the biggest and brightest technological ideas where scrappy, garage-based innovators emerge to become tech giants, whose products and services proliferate East. Have the tables now turned though where a new breed of tech giant is emerging from the East — called Super Apps — that have the Western incumbents scrambling to play catch-up?
If you live in Europe or the US, you may have heard of super apps, but if you live in Asia you probably spend most of your ‘screen time’ using one. So what exactly are super apps and why do we see this as being a big mobile trend hitting the West in 2020? Let’s find out.
What is a Super App
Think of a super app as a single gateway into an ecosystem of virtual products and services — a ubiquitous, all encompassing app that obviates the need to call up individual apps to perform specific tasks.
This new breed of super app tech giant provides their users with a one-stop shop to communicate, shop online, book travel, bank, find a date, get food delivery and pay for anything within a single, unified smartphone app. What originated in China is now spreading throughout Southeast Asia and beyond. Let’s take a look at some of these regional super app superstars:
- WeChat — The original Chinese super app, which has evolved into a quasi-operating system, dominating messaging and file sharing. It pioneered its use of mini programs which are apps within WeChat (currently more than 1 million of them) which serve as a portal for its 1 billion monthly active users to the wider economy, with virtually every major brand having a presence.
- Grab — One of Singapore’s and Southeast Asia’s most successful start-up with 144 million users, Grab provides every transportation mode imaginable from taxis to tuk-tuk 3 wheelers, as well as food, grocery, and package delivery, payments, micro-lending services and insurance
- Go-Jek — Go-Jek, who have a user base of over 25 million across Indonesia and Southeast Asia, now offer over 20 services including digital payments and video streaming to supplement their core ride-hailing business.
Travel is an important segment in the strategy of these super apps as illustrated by Grab’s recent introduction of hotel bookings directly through its app in partnership with Agoda and Booking.com, as well as WeChat’s booking service which allows users to book flights, hotels and rail tickets. Innovative airlines such as KLM have fully integrated their mobile website into their WeChat account allowing users to book flights, search their flight status or check-in all through the Chinese super app. Once a flight is booked, users receive reminders on the app when online check-in opens, and can have their boarding pass sent to their WeChat account in the form of a QR code. KLM also offer customer service through the app’s chat interface.
For business travellers, this consolidation of travel products and services all under the umbrella of one super app is certainly appealing considering the current status quo of travellers typically having to navigate between a myriad of different travel apps (Airline, TMC, OBT, Concur etc) on their day of travel, all with slightly different nuanced features.
For travel brands, delivering a frictionless experience from the beginning to the end of the traveller’s journey has always been the holy grail, however with the surge in popularity of these super apps, travel brands will likely have to deliver more and more of these experiences through the medium of a super app as opposed to managing the full experience in their own channel.
Contenders from the West
The rise of these dominant super apps in Asia hasn’t gone unnoticed by the Western tech giants, prompting them to try to replicate the super app playbook.
To be eligible as a contender for super app status, there are two essential ingredients a mobile app must have: a very popular underlying service with a large audience of frequent users, and embedded payments. With these in place, it facilitates the super app contender to introduce new product and service verticals within the app to increase the stickiness of an already engaged user base.
Let’s take a look at who is best positioned in the US and Europe to achieve this super app status.
Google Maps, is becoming for many people in the West, a utility they can’t do without, with users reflexively reaching for it to do local searches, get directions, find attractions, and make restaurant reservations all from one app. With the recently added travel features including flights, hotels, vacation packages and trip-planning tools, Google are really aiming to be the all-in-one place where users go to explore, plan and share travel destinations with people. Despite a few obvious holes, such as peer-to-peer messaging and payment options, Google Maps is well positioned to become a super app.
Uber have been explicit in their goal of becoming a super app with their CEO, Dara Khosrowshahi, saying in a recent interview, “We want Uber to be the operating system for your everyday life”. With their core business coming under threat from regulatory burdens as well as posting unsustainable losses, Uber is looking to expand its offerings beyond just ride-hailing. This new strategy will allow users to access transport, groceries, hot meals, banking and more within a single app.
Facebook laid out a vision in 2019 to develop “businesses, payments, commerce, and ultimately a platform for many other kinds of private services” within Facebook Messenger, WhatsApp and Instagram. With 2.6 billion users across those 3 platforms, Facebook could be better positioned to become the West’s first super app but they currently lack the aforementioned key ingredient of embedded payments. The much publicised pushback they are getting on their Libra payments project could limit the realisation of their vision.
Amazon is actively pursuing super app status in India, where it offers e-payments, flight bookings, ride-hailing, food delivery, and more, either directly or through companies it has acquired. Whether they can make this work in the West, remains to be seen.
Will Westerners even want/need a super app?
With super apps reaching hyperscale in Asia, it is still debatable whether Western consumers are looking for a similar do-it-all app — especially when there is a backlash against big tech in some quarters. Large consolidated ecosystems tend to hamper competition and innovation, making it difficult for competitors to stay in the game. Privacy is also a major concern, as the more things users can do in a single app, the more that app can learn about them.
Like it or not, Asia is shaping the future of the mobile internet for consumers everywhere, and Western tech giants are trying to play catch-up. Travel brands that have embraced this trend as early adopters have done very well, as evidenced by KLM’s success in China with WeChat.
Will there be one winner in the race to become the ubiquitous, all-encompassing super app? Will the Eastern trend of digital convergence make its way West and how will travel brands position themselves accordingly to take full advantage? Watch this space in 2020!
[This article first appeared in Travelport’s Mobile Trends for 2020 here]
