Could a super app conquer the West?

They are called super apps. They’re a one-stop-shop on your phone’s home screen – a one-stop shop for a dizzying array of services. Apps like WeChat, Grab, Kakao, and Rappi have become entrenched in the lives of people across much of East Asia, and they are quickly becoming popular in Latin America as well. These products offer great convenience and versatility, so why haven’t they taken over the West yet?

Europe and North America have yet to see an application that integrates communication, entertainment, e-commerce and payment services for a mass market. The reasons 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. Low bank account penetration in Asia has fueled the rise of WeChat, for example, but Western consumers tend to have long-standing relationships with banks and retailers, making them harder to trust vendors. virtual, ”he explains.

If you own the interface, you own the client. If you own the client, you own the data. And, if you own the data, you can define the future

Another reason for the success of super apps in many Asian countries is that they have overtaken intermediate technologies. For many people in China, for example, their first contact with the Internet was through a smartphone rather than, say, a PC with a dial-up modem. At the same time, a huge unbanked population has started paying for goods and services using mobile apps. Government support for technology has often played a key role in its adoption.

“The digital boom in Asia has created a virtuous loop in commerce, payment and lifestyle,” observes Michelle Du-Prât, director of group strategy at the brand design agency Household. “But that was a different story in the UK.”

According to a recent YouGov survey, less than 10% of UK consumers have gone digital with their bank and a quarter are uncomfortable with the idea. Fletcher believes that “this level of mistrust is too great for a super app to flourish here. Our ties with existing vendors are also too strong for us to get into bed with a new tech company offering a myriad of services.

While the entrenched loyalty of Western consumers to long-established brands won’t help a super app gain traction, neither will the Western trend to regulate markets to ensure fair competition. This is one of the reasons the multi-category conglomerate business model has not flourished as much here as in Asia.

“Western economies have a long history of dismantling or limiting the growth of companies that become powerful. To the extent that it promotes consumer rights and encourages innovation, this approach can be said to have largely worked, ”said Nick Cooper, global executive director of brand consulting firm Landor & Fitch. “If a great app appeared here and performed amazingly well, it would most likely be challenged and dismantled.”

Feature-rich apps are flourishing in the West

There are a few factors that could work in favor of super apps in the West. The first is the rise of its post-millennial generation of innovative, brand independent and convenience-seeking consumers. Another is that Covid lockdowns have prompted huge swathes of the population – young and old – to try new channels of online consumption.

As Fletcher notes: “Most of us never thought we would watch sports through Amazon, order food through an aggregator’s app, or shop for clothes on a media platform. social. ”

Amazon is arguably the closest to the West to a one-stop-shop app, although Apple has also created a vast ecosystem for consumers that continues to grow.

Ben Davis, editor and strategist at Econsultancy, points out that Uber CEO Dara Khosrowshahi has “made it clear that his company intends to develop a super app service. Large companies are also creating feature-rich apps to be more customer-centric, although they aren’t necessarily great apps. Emirates has done this, combining booking, in-flight entertainment, and frequent flyer accounts. ”

Expect more aggregation, but differentiation

Western consumers won’t be able to connect to a home WeChat anytime soon, but the arrival of interconnected aggregation apps offering users ways to do things better, easier, and faster is on the cards.

“These offer a 360-degree view of a consumer and his behavior. A great app allows an organization to own the interface with the consumer, ”says Fletcher. “If you own the interface, you own the client. If you own the client, 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 into payment and banking arrangements. This is then connected to your profile and your purchasing habits. But the idea of ​​consenting to such a high level of built-in digital privacy still makes many Westerners uncomfortable, as Sean Farrington, vice president of interactive design at LiveArea, notes.

The level of mistrust is too high for a super app to flourish here

“There is a general concern about technology, privacy and trust,” he says. “It will definitely take longer for the public to warm up and embrace services like this.”

Tensions between Apple and Facebook increased in April when an operating system update for iPhone and iPad gave users a privacy option that prevents their critical online browsing activity from being tracked. for data hungry advertisers or indeed any super app.

A remedy for the West’s reluctance to adopt super apps could potentially come from the FinTech sector. Potentially, open banking and partnerships between big tech and big banks could lead to a bundle of services.

Google Pay’s recent partnerships with Safeway and Target to bring cost-effective grocery deals to app users “also demonstrate a trend to take more ownership of the customer’s day, linking commerce directly to payments for personalized convenience. ”, Says Du-Prat. “A great app is as much a convenient destination as it is a space for collaboration, inspiration and innovation.”

And that’s where the catch lies: Western consumers are still too skeptical and entrenched in their behavior for a mainstream superapp to emerge today. The promise of convenience is simply not enough to outweigh all concerns. But also, such a competitive market is open to disruption, so don’t cancel tomorrow’s super app.



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About Gail Mena

Gail Mena

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