What the heck is a super app?

It seems every tech company wants to be a super app. But what does it really mean to be one? [Read from your browser]( Editor's Letter Dear {NAME} Every so often a tech buzzword surges in popularity - and then gets mangled so much that its actual meaning becomes unrecognizable. “Super app” is one such term. AirAsia [wants]( to be a super app. So do [Fave]( and [Deskera](. Grab and Gojek say they're already one. It’s as if “super app” has become a byword for “unfocused.” Start a dozen businesses, tie them up with a magical thread called “data” or “synergy”, and voila, you’re a unicorn. Investors and the media (guilty as charged) seem to be fueling this fire. Let’s examine what sparked the flame. The term, I believe, was popularized in 2015 in a [podcast by VC firm Andreessen Horowitz]( in reference to WeChat. “Chinese apps tend to combine as many features as possible into one application, something we call a ‘super app’. This is in stark contrast to Western apps, which leans towards app constellations,” said the firm’s general partner Connie Chan. WeChat started out as a popular chat app. It built on that foundation by adding an e-wallet and allowed users to transact within the app. Next, it gave businesses a way to build mini-apps within the main app. Then with the immense data WeChat has on users, it has layered on lucrative credit scoring and financial services. WeChat’s success, however, has caused some people to have a narrow view of super apps. They dismiss companies like Grab, Gojek, and Paytm as not being “true” super apps. It’s like discovering ice-cream and declaring that vanilla is the best and only flavor. That is not the case. Just look at Ant Group’s AliPay, which is providing a [different pathway]( to becoming a super app. While WeChat started with chat, AliPay began with payments, and then added services and financial services on top of it. Another example is Meituan Dianping, which also didn’t start with chat. Instead, it began as a daily deals site, then became a platform for food delivery, lifestyle services, entertainment, travel, and most recently, [power bank rentals](. It became [profitable in 2019]( showing that its approach is working. We need a broader definition of “super apps” - perhaps we can explain it as a synergistic combination of multiple seemingly unrelated services into one app. This broad definition, however, has limitations in that it masks some key differences in how various super apps approach things. Facebook can be considered a super app, but Alipay’s and WeChat’s novelty lies in parlaying dominance in mobile payments and chat respectively into financial services - all accessible through the phone. Also, while all three players are ecosystems that provide APIs for businesses to benefit from and become reliant on the network effects, the Chinese counterparts invest in areas that US tech companies won’t touch. For example, Tencent, the company behind WeChat, is like a combination of Facebook, Netflix, and Activision Blizzard. It’s also worth noting that Southeast Asia’s super apps, like Grab and Gojek, are catching up with their Chinese and Western counterparts in providing comprehensive developer tools and APIs, which is crucial to creating a self-sustaining ecosystem. Anyway, the reason why I’m going on and on about super apps is because that was the topic of our premium articles last week. Facebook’s Whatsapp is playing catch up in its super app ambitions. If it gets things right, [it could incubate the region’s next billion-dollar startup]( the same way WeChat did in China, our reporter Melissa Goh writes. It’s worth noting that Facebook’s family of apps is dominant outside of China in terms of hogging people’s attention, so it’s in prime position to replicate WeChat’s playbook. Meanwhile, our industry analyst Simon Huang looked at how [digital investing in Southeast Asia is heating up as Grab and Gojek enter the fray](. Compared to their competitors, the duo have an advantage in customer acquisition costs - they can easily reach millions of consumers and convert them to their financial services. Finally, our Indonesian reporter Putra Muskita looks at how [Indonesia’s e-wallets have hit a ceiling]( though he notes that there’s a way to break it. Ultimately, Southeast Asia remains a limited and nascent market compared to China, with wealth thinning out rapidly once you exit the Tier One cities. Even as companies attempt to copy China’s super app strategy elsewhere, the demographics are impossible to replicate, and outside of their control. Do [subscribe]( if you’d like to get more insights into Asia’s super apps. We’re actually delving more into the topic this week - do stick around for that. Cheers, Terence Chief Editor To ensure that you don't miss out on the biggest tech news and analysis, add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Tech in Asia’s newsletters are handcrafted daily with love - and sometimes powered by good coffee. Don't want to receive these emails anymore? [Unsubscribe](. --------------------------------------------------------------- Copyright © 2020 Tech in Asia, All rights reserved. 51 Bras Basah Rd, #05-5061, Singapore 189554