Super apps’ secret sauce

A preview of Phocuswright's research report: Super Apps Secret Sauce

By Cathy Schetzina Walsh

The super app concept originated in Asia, but a growing number of Western companies aim to emulate these all-in-one mobile powerhouses. Apps like WeChat and AliPay in China, Grab (Singapore), PayTM (India), GoTo (Indonesia), Kakao (South Korea) and AirAsia (Malaysia) have all built addictive multi-service apps that offer practically all the digital services one could need on a daily basis and dominate their respective markets. Now companies like Google, Meta, Twitter, PayPal, Hopper, Booking.com and Uber are seeking to replicate the level of super app success seen in Asia (and more recently, in Africa and Latin America) in Western markets like the U.S. and Europe.

It remains to be seen whether these – or other competitors – can achieve similar adoption. But companies may not need to build a full-fledged unicorn super app to capture some of the benefits that have made these platforms an essential part of daily life for Asian consumers.

Super App Ingredients

Super apps typically share a common set of features and functionality. But discussion of these features often skims over their significance within the business model. It is this deeper layer that speaks to both what makes super apps so effective – and why they will likely work somewhat differently in the West. Below is a preview of the discussion of some of the key ingredients of successful super apps. Full analysis is available in the report here.

There’s a (Mini) App for That

Mini programs are a key feature for many super apps, providing a way for third-party developers to become part of the ecosystem. They are lightweight mini-applications that are housed inside the super app, making it easy for users to add or remove functionality as needed.

In contrast, the Western paradigm typically requires users to download individual apps for every brand or service. Apple and Google have done their best to prevent the app-within-an-app model from gaining traction in the U.S. (Apple’s app store, for example, generally forbids them, a move that has drawn regulatory scrutiny). The two tech giants have profited from mobile apps housed within their app stores, charging up to a 30% commission on apps and digital in-app purchases, fees that companies often try to work around (e.g., Amazon).

In the meantime, there is a push to create pseudo-super apps, with travel, social media and tech companies looking for ways to add additional services, along with more of the secret sauce that has fueled the growth of WeChat and others.

Among the ingredients:

Daily usage

Because most travelers take just a few trips a year, it is challenging for travel brands to maintain a connection with their customers between trips. Travelers have no reason to routinely return to a travel app. In contrast, successful super apps include one or more services designed to be used frequently.

Fintech

Payments are the cornerstone super app function because they create a seamless way for users to make purchases across services with zero friction. Many super apps incorporate fintech services such as digital wallets. Payment systems include WeChat Pay, Alipay, GrabPay, Line Pay, KakaoPay … the list goes on. These can be used in conjunction with debit/credit cards, stored value, peer-to-peer transactions, micro-loans, loyalty rewards and other financial services.

Social networking

It is well established that social media keeps users coming back for more, and super apps typically integrate social elements that help to foster app usage and loyalty. In addition to messaging, WeChat includes a Moments feature that allows users to share photos, videos and status updates, with similar functionality in other super apps like Kakao (KakaoStory) and Line (Line Timeline).

Gamification

In addition to including gaming among their services, many super apps have made an art of gamification as a way to grow their user base, increase stickiness, encourage frequent use and build loyalty. These features can reward users for engaging in desired behavior, such as frequent usage, purchases or taking specific actions.

Conclusion

The ingredients to create a super app in the West are all present – but to date no one has put them together successfully. Many factors contribute to the situation, from app store gatekeepers and regulation to consumer behavior and an online ecosystem forged in the days of desktop-only computing. But as mobile captures an ever-growing share of transactions, consumers will likely seek alternatives to downloading a separate app for everything they do.

Delivering on the promise will take more than simply combining multiple services into one place and calling it a super app. To build the real thing, it will be necessary to navigate issues of privacy, data ownership, payments and entrenched mobile gatekeepers, to name a few. While we wait, the super app moniker is sure to remain a hot topic.

This article is part of a content series that explores some of the most impactful innovation and technology-driven trends that will influence the travel industry in 2023 and beyond.

Below is a link to each full trend analysis.

Watch the online event that covered each trend, presented by Phocuswright analysts:

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