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The Super-App Highway

SciTech looks at the emergence of 'super-apps' and their future in the world of technology.

By Tiberiu Toca, SciTech Investigations Editor

SciTech looks at the emergence of 'super-apps' and their future in the world of technology.

A superapp has numerous tools that each serve a specific function; the only difference is that only new tools (mini-apps) can be added or removed as needed by the user. Users of superapps can design customised user experiences (UXs) by choosing and installing specific mini-apps. Apps on steroids are what we mean by "super apps." They offer a variety of services that seem unrelated to one another in a single mobile interface. Think of a place where you could access Uber, Grubhub, WhatsApp, your bank, Amazon, and more.

Super apps do everything, eliminating the need to open multiple apps for various tasks and wasting storage space or battery life. There are numerous mini programmes inside of each super app. But for an app to become truly exceptional, more than a few mini-programs are required. A social platform, eCommerce services, transportation services, financial services (like digital wallets), food delivery, bill and utility payment options, and health and insurance programs are just a few of the mini-programs that super apps must include.

Emerging markets like South America, Southeast Asia, and India all have a booming Super App industry. The US/Silicon Valley business model aims to expand globally and vertically. These super app companies prioritise aggressive horizontal expansion and dominance over a particular region.

Emerging markets offer a chance for businesses founded in the digital age to prosper, as there is no antiquated infrastructure to overcome; everything can be constructed for a new generation of internet users. Many of these nations, including China, have dense populations, which has given rise to another recent trend called the 'group purchase model'. Super apps have already dominated most of Asia, despite their relative obscurity in Western nations. The eastern hemisphere is dominated by a few super apps, including WeChat, Baidu, and Alipay.

Super-apps combine various mini-apps with different functions | Unsplash / Alexander Shatov

With just one app, you can find a date, call a cab, and even file for divorce. Super apps are very likely to shape our future, probably for the better, in a time when convenience is valued more highly than money. They have the advantage of being your one-stop shop for all online needs. Opening one super app as opposed to a dozen is so much simpler; customers will have a seamless experience as long as they trust the app.

Amazon and Facebook (now known as Meta) have both jumped on board in the race to develop the best super app. Meta’s ecosystem may be more expansive than any super app, offering a network of interoperable virtual worlds where users can engage in activities like virtual concerts and transactions. Amazon wants to develop a super app that can be voice-activated from anywhere using Alexa. You could even request a ride to the airport from your vehicle.

The odds are still stacked against the continued growth of global super apps. Because of various antitrust issues, it is unlikely that regulators and policymakers in North America, Europe, or even South Korea, Japan, or Australia will ever permit a dominant super app to flourish in their regions. Consumers in the developed world, for their part, are not interested in super apps because of a variety of data privacy concerns. If an American tech giant were to somehow transform into a super app, European regulators like Margrethe Vestager of Denmark would be ready to pounce on them over data privacy.

With super-apps, data privacy is a concern | Unsplash / Lianhao Qu

The majority of currently available mobile applications make money through subscription services and/or advertisements. In terms of advertising revenues on its social media platform, Meta has undoubtedly prospered. But when financial services are added, super apps of the future offer a much bigger reward. A small portion of all transactions occurring on a super app is enormous when compared to advertising dollars. This is already appreciated by Apple and Google. They have therefore made every effort to block access to their mobile OS platforms by all-in-one apps. If such a super app gained popularity, it would deprive them of sizable transaction fee income.

There could be major changes in the future because transaction revenues will be the super apps' main draw. The most well-known all-in-one apps may be developed on platforms other than Facebook, Apple, or Google. Particularly, fintech firms like PayPal and Square may be in a better position to succeed. Super apps that make it simple and secure for users to make payments for services across all mini-apps on a platform will have an advantage. Because of this, Google and Apple both introduced Google Pay. When it comes to all-in-one apps, transaction fees are where the big money is to be made. So don't be shocked if the first super app from the United States isn't based on financial services.

This brings us back to the more important question of whether super apps will endure in China and Southeast Asia, or, to put it another way, whether their own regions will be given the opportunity to prosper. Everything will ultimately depend on what regional regulators decide to do. How much information will they permit super apps to gather? How will the collection of data be regulated? Super apps are essentially tools for collecting personal data. Private utilities like electric power producers exist throughout Asia, including China, but they are subject to strict regulations. Perhaps a rational take would be that WeChat will be a much more regulated and less lucrative player than it is right now in five or ten years.

Although it is unlikely that super apps will disappear anytime soon, they do have a place in the region's digital economy. However, anyone betting that super apps will be the next money-making tools need look no further than the venerable Swiss army knife. Even Victorinox, the largest manufacturer of Swiss army knives in the world, is still a niche player and not a powerhouse.

Featured image: Unsplash / Rami Al-zayat

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