Everything you need to know to understand the Super App revolution.
If you’re involved in the tech industry in Asia, you would have heard the term “Super App” appearing frequently these days. Widely credited to Asian tech giants such as WeChat, Gojek, and Grab, the Super App business model offers an all-encompassing mobile ecosystem (including payments and more). To confidently decide whether your company should adopt a Super App strategy, we’ve studied multiple case studies across the world to help you better understand what makes Super Apps so powerful compared to single-function apps.
Super App Definition
This Super App concept originated from WeChat, the incredibly popular Chinese Super App. WeChat built an ecosystem of over two million services covering over 200 categories using mini program technology (i.e. an “app within an app” approach), in effect replacing the need for downloading corresponding external apps on user’s mobile phones.
Gojek in Indonesia understands their Super App as an umbrella app with a centralized operating system providing access to different services for a mobile-first generation. Gojek currently offers food delivery, ride-hailing, digital payments, e-commerce, hyper-local delivery, and two dozen other services.
Unlike the rest of the world, in China the most important layer of the smartphone stack is not the phone’s operating system. Rather, it is WeChat.
Super App Benefits — The Business Perspective
Our view suggests that the Super App trend is here to stay because of a shift in consumer and business behavior towards mobile. The big question is whether players in the mobile app market understand how Super Apps deliver value and whether they are moving quickly enough to take advantage of its benefits.
Convenience and simplicity for users: Integrating services into one single Super App can create huge user stickiness and competitive advantage in a crowded mobile app market. Today, users require one app for ride-hailing, another for food delivery, yet another for banking, and more. This excessive app count leads to app fatigue; it’s no surprise users refuse to download more new apps because of the high initial effort required to learn to use and transact on them. Instead, smartphone users appreciate one, simple, all-in-one application to handle a variety of their daily activities. Consumers may not explicitly demand a Super App, but they clearly want ease and convenience as seen from breakout successes of WeChat, Paytm, and more.
88% of time spent in apps is limited to only 5 apps.
Monetize existing user base: Super Apps translate their user base into profit who have high lifetime value. The key differentiator from single-function apps is the ability of Super Apps to generate enormous revenue from commissions (charged either to merchants or end-users) on every transaction passing via the Super App. Looking at WeChat today, only 17% of revenue is derived from advertisement compared to 90% from Facebook. This translates into significantly higher average revenue per user (ARPU) with the potential for even more growth. As a point of reference, WeChat’s ARPU is estimated to be at $7, seven times the ARPU of WhatsApp.
Significantly lower cost of acquisition for new users. When rolling out a new function, a Super App is able to port user information over or connect customer accounts easily. A crucial yet non-obvious benefit is the Super App’s ability to avoid double-paying for non-trivial costs like know-your-customer and anti-money-laundering checks on new users. Done once, it can be reused across e-wallet, insurance, and lending functions.
Collect data to offer personalized customer experience. Super Apps have access to a comprehensive collection of user data. Just from e-commerce transactions, super apps gain insight on transaction history, demographics, rating preferences, and more. Artificial Intelligence predictive analytics can combine this information with the user’s financial status, social environment, behavioral patterns, geolocation data, and contextual analysis to deliver personalized services and hyper-relevant product offerings. Depending on the available variables, the Super App can immediately offer options to suit the customer's specific needs just when they need them, saving them time and effort. Think Amazon A9 algorithm with its conversion rate of 74% while ordinary e-commerce averages between 2% to 5%.
91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them.
Gojek’s e-wallet Go-Pay is currently accepted at close to 300,000 online and offline merchants and processes $6.3 billion of gross transaction value annually.
Super App Characteristics
Today, there are many companies who are already Super Apps and even more trying to become Super Apps. We’ve observed several common characteristics that each of the Super Apps we’ve studied have or are currently adding:
Unifying Payment System. In general, Super Apps leverage a core e-wallet to build a diverse ecosystem across multiple use cases which increases efficiency and enhances the user experience. Having a seamlessly integrated native payment option locks-in users into transacting on 3rd party services on the Super App and streamlines end-to-end user journeys. 3rd party services build storefronts on top of the super app’s payment feature and all purchases are linked to these payment credentials so that consumers never have to worry about payment anymore when they can simply click “Buy”.
Seamless end-to-end user experience. From finding what to buy, getting the best deal on that item, and making payment, a Super App must simplify all aspects of any transaction without the need to exit the app and minimize friction to a point where making a purchase becomes virtually effortless. For instance, Baidu (“Google of China”) has lost a market share of e-commerce shopping searches to WeChat because the former does not enable payment to close the loop on transactions in the same flow. Creating innovative consumer-focused experiences is a non-negotiable necessity in today’s competitive digital-first world.
Direct relationship with users. Super Apps are focused on building a deep connection with their users to become the primary touchpoint for every aspect of an individual’s life. The aim is to become a quasi-operating system that is uniquely embedded into user’s daily routines. Super Apps are able to do this by controlling the supply of 3rd party products and services (which is abundant in theory) to its user base.
Openness to partnering with 3rd parties. A Super App’s ability to support entire lifestyle journeys (e.g. arranging each step of complex travel) requires creating a comprehensive ecosystem of businesses, bringing together a wide array of providers needed to transact with for each ‘life task’. Nonetheless, aspiring Super Apps must be careful of brand overextension through trying to do too much. While Sberbank and WeChat did start several of their service lines in-house, many of these were 3rd party companies that they acquired or invested in. One company cannot successfully build products for dozens of verticals outside their general bounds of expertise that deliver the best value and services to users. Practical-minded Super Apps actively seek out integrations with quality 3rd party partners who share their vision to build a healthy ecosystem around user needs.
Deep-dive into select core verticals. Gojek doesn’t just offer mobile wallet function as a surface level financial product; they quickly expanded into a suite of financial products from insurance, loans, wealth management, and more. This provides a holistic experience so users can manage everything concerning their financial lives and needs, all from a single app.
Our Super App partners stress the importance of single-sign-on, payment redirection, and other features to lower transaction abandonment rates.
"A Super App is a platform that enables an entire ecosystem or economy of digital services." - Ming Maa, President of Grab
Evolution — From Single Function App To Super App
Existing Super Apps all took a unique path becoming one; there’s no single set path to building a Super App (i.e. messaging is not compulsory, nor is ridesharing).
In general, however, progress would look something like this:
Build a successful core service that provides a high open-rate. Before adopting a Super App strategy, develop an outstanding functionality in your app (i.e. messaging for WeChat) or a suite of complementary functions (i.e. Riding hailing & delivery in Gojek) in-house to acquire a substantial user base. Subsequently, extend your services to gain more new users beyond the initials ones.
Build strong partnerships to form an ecosystem. The ability to strike cross-industry partnership deals where 3rd parties offer their services through your app is a determining factor for the success of Super Apps. For instance, Revolut partnered with pension disruptor PensionBee, and Grab paved its way towards payments with OVO, a popular payment platform in Indonesia.
Open up your app ecosystem to mini program developers. With an immense user base, many companies from large enterprises to small/medium businesses will be drawn towards integration with your app to conduct business. Use Mini programs, a lightweight app with native features live inside of your Super App to add these services to your app, much like webpages live on the internet. This ‘app within app’ approach pioneered by WeChat allows third parties to develop mini programs by themselves subject to the Super App’s internal approval processes. This lowers product ownership and development cost for the Super App while enabling rapid scalability. For example, our partner Paytm realistically expects to grow exponentially to support over 1 million mini programs in the near future.
Are Super Apps part of your current strategy? Appboxo’s collective expertise building Super App ecosystems using mini program technology with the largest e-wallets, banks, and brands across the world enables us to provide you with the strategic insights and technical capability to achieve your vision.