The Case for Super Apps: Why Enterprises Are Building Them Now

The mobile app ecosystem is in a state of transition. More and more, apps are becoming an interface between digital life and real life: people are spending more time and money on their mobile devices. Mobile usage has swelled 20% from pre-pandemic times to up to 4 hours and 10 minutes a day for the average person. As our mobile habits evolve, apps are evolving with them, and the latest newcomers onto the scene are super apps.

So what are super apps? They’re apps that do everything, or just about — payment processing, social feeds, online shopping, rent payments, train tickets, and more. The phenomenon is most established in Asia with contenders like WeChat and Gojek, but Western companies are starting to catch on. Super apps are the natural result of an evolutionary arms race in the mobile app industry, as competitors innovate and adapt to keep up with one another and the ever-changing environment.

What’s the edge? In this post, we’ll explore what makes a super app, their rise in popularity, and why enterprises are going super. Keep an eye out for part two of this series, where we’ll detail the challenges facing enterprises developing super apps and how to develop an effective super app strategy.

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Super apps have emerged within the app ecosystem within only the last few years, and Chinese WeChat (owned by Tencent) is widely credited with being the first. It first came on the scene in 2011 as a simple chat app but continuously adapted, attracting a critical mass of users and adding features and functionality until it became nearly indispensable to modern life in China. Over 1.2 billion monthly active users turn to WeChat for messaging, video games, digital payments, social media, and more. The term “super app” or “superapp” was first used to describe WeChat in 2018, and has exploded in popularity since then as competitors and copycats race to catch up, building their own platforms.

So what makes a super app? A super app is a self-contained platform that includes a variety of services that integrate with its users’ daily lives. All of its services can be managed without leaving the app. The main features of the world’s most established super apps include:

• Messaging
• Ecommerce
• Payment processing
• Social utilities
• Delivery
• Transportation

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What are the changes that have influenced the rise of super apps? Here are some of the conditions that have prompted this adaptation in the mobile world.

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Competitive niches

Competitive pressures in Asia created a niche for the world’s first super apps. Major platforms like Google, Facebook, Twitter, and Youtube are blocked in several countries, including China. These big companies dominate Western markets, and their absence opened a gap for innovation in Asia. The competitive landscape in the West has different factors that are slowly leading enterprises to converge on super apps, which we’ll talk about below.

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App saturation

The App Store currently has 1.96 million apps and the Google Play store has 2.87 million apps. There are about the same number of apps as alligators on the planet. Consumers are clearly not suffering from a lack of choice — but is all this diversity actually useful to them? There’s a standalone app for everything. But 71% of app users churn within 90 days of installation. Clearly, the average consumer isn't getting enough value from these neglected apps. The solution to this problem isn’t more apps, but different apps.

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The changing data landscape

The last few years have been eventful in terms of data collection and transfer regulations, and this is changing the way companies do business. Businesses and their apps are now bound by GDPR and the legal fallout from its implementation is still in flux. American privacy laws are also changing, with a recent White House Executive Order to limit “aggregation of data, unfair competition in attention markets, [and] the surveillance of users.”

Legal expectations regarding data collection and privacy are still evolving, but the general shift is causing many enterprises to reduce their reliance on third-party tools that share private user data (related: The Real Cost of Free Software). These changes are also pushing app creators to keep their users in their platform as much as possible, prioritizing first-party data collection.

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App store advertising regulations

Governmental regulations aren’t creating the only conditions pushing companies away from third-party data collection. The app stores lay down the rules too, and Apple’s App Store has famously tight restrictions. Most recently, its 2021 Apple Tracking Transparency privacy policy placed limits on the use of third-party data for advertising purposes, and these rules created ripple effects, especially for businesses that rely on revenue from mobile advertising.

Basically, first-party data is now a commercial necessity, as analysis applied to first-party data doesn’t constitute tracking and meets Apple’s privacy policy requirements. Since ATT was implemented, companies have been shifting to closed data ecosystems where advertising is served and operated using only first-party data, called content fortresses. An example of a growing content fortress would be Zynga, which recently acquired Chartboost (an advertising network) in a move that ties gaming and ad tech together without compromising Apple’s regulations. We’ll discuss content fortresses in more detail in the next post in this series.

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So we’ve seen how changes in environmental pressures are encouraging more apps to adopt super features. But what are some of the other reasons enterprises are going super now?

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Diversify revenue streams

Going super allows enterprises to capitalize on the audience they already have and extract more value from them by exposing them to new opportunities at low or zero customer acquisition costs. China’s Meituan is a standout example of this strategy: it’s a major shopping platform now, but it started as a food delivery app. When they added a new menu option for hotel bookings, they pushed for adoption and the result is that the app now captures 50% of online hotel bookings in China. It has also expanded to include other shopping services and is a dominant player in the marketplace.

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Grow your audience

Super apps have diverse features, so they attract multitudes of users for different reasons. These apps capture the long tail of mobile internet usage; if your app can service more of the users’ needs (such as entertainment, transportation, shopping, browsing) then it can capture traffic lost to other apps or browsers.

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Customer lifetime value

The most successful super apps have multiple touchpoints with the consumer throughout the day. One example is Indonesia’s Gojek, which is used by over 30 million people for ridesharing, bill payment services, movie tickets, video streaming, beauty appointments, and more. The lifestyle value provided by super apps encourages high retention rates and increased spending from consumers.

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Closed data ecosystems

We’ve covered above the factors in-app store and data regulations that have influenced the way mobile apps are dealing with data. These pressures are causing shifts to content fortresses, closed first-party data ecosystems. Reducing third-party data collection has become a move that protects enterprises legally and addresses rising consumer expectations for privacy. Super apps collect mountains of first-party data and are able to use it for research, advertising, and user experience development.

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App development savings

The classic approach for large enterprises has been building standalone apps for different services, but this is no longer cost-effective. Super apps create an economy of scope producing more user-centric services at lower overall cost than developing all of the services separately. Consolidating apps also simplifies app performance management, reducing time and labor costs.

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We’ve explored how super apps can serve enterprises, but beauty is in the eye of the beholder. So let’s talk about the people that be holding their phones. Are super apps more satisfying than standalone apps? Here are some of the ways super apps benefit their users.

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User-centric design

Consumers are becoming more sensitive to products that benefit the business more than the user (also known as product-centric design). But super apps are all about the services they provide to their users, integrating with everyday life and commerce. Super apps typically invest heavily in user experience design and app performance, both of which contribute to higher user satisfaction and retention rates.

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Convenience and consolidation

We’ve talked about how mobile phones are saturated with single-purpose standalone apps and how the result is that many of them rarely get used. Our phones are cluttered with icons and daily tasks often require flipping through screens looking for the right app to do the job. Super apps give their users quick access to a variety of services without having to exit, switch apps, or search their phones. They also reduce the time investment required for learning to use a variety of new services.

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Security and sign-in

The average person has 40 apps installed on their phone. That’s dozens of separate logins and passwords to remember. Having so many accounts is not only overwhelming and impractical for most people, but it’s also a security risk. Consolidating services reduces the user’s risk of data exposure and identity theft. Plus, enterprises with super apps are more likely to invest in higher-security single-tenant data storage.

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Resource conservation

One of the main reasons users uninstall apps is because they are resource hogs. Although most apps do not get launched consistently after installation, many still consume battery life, memory, and data in the background. They also eat up precious storage space on the user’s phone, and useless apps are the first thing to go when space runs out. Super apps pack dense functionality into a minimalist package that consumes resources less aggressively than a dozen equivalent standalone apps.

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We've discussed plenty of reasons why super apps will continue to trend West, and why enterprises are considering going super now. In the next post in this series, we'll go into more detail about the technical and logistical challenges of creating super apps, and how to set up your super app strategy for success. One of the main challenges in building and maintaining a super app is increased performance expectations, as super apps serve large audiences with essential everyday tasks and need to be top quality. We'll discuss app performance management principles and specifics on how large teams can optimize workflows with code ownership and issue prioritization (related: Mobile APM: App Performance Monitoring, Management, or Both?). Super app performance is a critical component for super success, so we'll tackle that and other strategies in our next post.