Super-apps: a convenient experience, but a threatening one
The term super-app was coined by BlackBerry founder Mike Lazaridis in 2010. He defined it as “a closed ecosystem of a number of apps” that people use every day because it gives them an integrated, efficient experience.
Today, however, super-apps around the world are more synonymous with Chinese products — WeChat and Alipay — and in Iran with Snapp.
Because they merge many unrelated services in one place, super-apps meet most of people’s everyday needs. The idea is that you should be only one click away from whatever you want.
In China, Tencent’s WeChat is everywhere: people use it to chat with family and friends, pay on the street, order food and groceries, book a ride, order plane tickets, pay their rent, interact with the government, and more.
User satisfaction is largely achieved by integrating a wallet into the app so users can complete every transaction easily through a single app.
WeChat has been one of the companies that made the most progress on this path by launching mini programs in 2017: the platform now has more than 2 million mini programs and continues to develop new features to attract developers.
In super-apps you encounter several characteristics:
Faster, lower-risk product launches:
In super-apps, a large audience and massive data help you shape the right offer and present it to the right people at the right time.
Lower product development and ownership costs:
Most of WeChat’s “mini-apps” have been created by companies that want to do business with WeChat’s large user base.
Lower KYC (know your customer) costs:
Ant Financials managed to reduce loan applications and their approval process to 3 minutes. Most KYC data is automatically synced from the customer’s social and financial profile.
WeChat and Alipay: descendants of super-apps
WeChat launched in 2011 as a messaging app. But a decade later, with 900 million monthly users, it has become an ecosystem that lets users do a great deal:
Order a taxi, apply for a loan, transact with local businesses, government service providers, and more — and the best part is that all of these transactions (including payments) happen inside the WeChat ecosystem.
As a result, WeChat managed to earn an average of $7 from each user. That number is 7 times WhatsApp’s ARPU.
WeChat has unprecedented access to social, financial, political, and personal data, and is continuously connected with 93% of people in China’s first-tier cities. WeChat users use a large volume of services while handing their privacy and personal data over to the parent company Tencent, advertisers, and the Chinese government.
WeChat has made most aspects of everyday life in China much simpler — but at what cost?
Alipay, as part of Alibaba, is also the main payment method on the well-known e-commerce systems Taobao and Tmall (owned by Alibaba).
The company collects social and transactional data from these services and sends it to Ant Financial, its financial-services arm.
Ant Financial, in turn, uses that to create a credit-scoring system for merchants and consumers and to offer personal and business loans.
Another example from the super-app industry
WeChat is not the only super-app conquering the East. Grab is among the super-apps based in Singapore; it invested in OVO, Indonesia’s popular payment platform, and is also in talks with DANA, an Indonesian FinTech payment system, with the intention of merging it with OVO.
Grab has decided to step into banking as an affordable, inclusive, convenient financial service.
Are super-apps really coming to the West?
Some experts say that because of different regulatory conditions and market conditions, the WeChat scenario will never happen in European or North American markets.
That does not mean, however, that local players are not pursuing platforms and market paths. Quite the opposite. Take Google Maps, for example.
Google Maps has also tried to leave specialized cases to specialized players: for example, you can book a restaurant through OpenTable, Resy, and other similar services, or organize food delivery through DoorDash and other services.
Google Maps, unlike WeChat, does not have connected payment services, and that may be why it is still not called a super-app.
Over the past few years, however, the U.S. Department of Justice and eleven other states have repeatedly sued Google for violating antitrust laws and using illegal means to maintain monopoly power.
The U.S. Department of Justice ruled that the company illegally maintains a monopoly in online search and related advertising in pursuit of monopoly profits, and that competing companies are thereby deprived of the opportunity to compete.
Statistics show that digital advertising accounts for almost 85 percent of Google’s $160 billion in annual sales.
The super-app model is growing quickly in Asia and emerging in Latin America, but in the West it is still unclear whether there is real demand for a super-app or an alternative model. Super-apps see large opportunities in collecting more and more precise information about their mass of customers.
The scale and scope of the personal information that the majority of Chinese citizens connect to their WeChat accounts — including 200 million bank cards — would allow hostile individuals, non-state actors, and other countries to breach it through several unpredictable violations, which could devastate the lives of millions of Chinese citizens and, subsequently, the Chinese government.
The privacy issue in super-apps
WeChat has a notable lack of encryption security, which is highly unusual compared with the strict personal-security standards of Western apps such as iMessage, FaceTime, and WhatsApp.
The lack of separation between the public and private sectors in China supports our claim that the Chinese government should take responsibility for protecting WeChat users. Any private-sector initiative must be reviewed, approved, and even potentially funded by the Chinese government.
Given that the Chinese government will undoubtedly oversee a private entity’s attempt to encrypt WeChat, it is more effective for the Chinese government to take direct responsibility in the first place.
Super-apps: a pleasant and dangerous experience
By meeting every need and offering people an unmatched online user experience, super-apps are very appealing. In doing so, they collect many layers of data and provide a highly precise user profile with all the messages they need.
People in the West do not seem willing to disclose privacy in exchange for convenience. To build WeChat-like apps in the United States or Europe, a high level of assurance about how the huge volume of collected data will be used is essential.
Regulatory constraints in the United States and Europe are stricter and therefore prevent the emergence of a digital provider capable of meeting most everyday needs.
Competition law prevents large technology players from merging, in order to protect consumers, and beyond that, antitrust cases are taken seriously by regulators in the U.S. and Europe, because they can lead to unfair business practices, the destruction of competing companies, and a lack of innovation, and in the absence of real market competition they can harm consumers.
The question now is: whom will super-apps serve — people and their welfare, governments and political games, or monopolistic commercial superpowers?
Sources:
https://uxplanet.org/are-super-apps-really-coming-to-the-west-ffa5a3a44ce7