Could a super app conquer the West?

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.

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.

“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.