Why we’re unlikely to see a Western superapp anytime soon

In the run up to his purchase of Twitter last October, Elon Musk tweeted that buying it would be “an accelerant to creating X, the everything app”.

Whilst he seems to have had his hands full fighting fires (mostly of his own lighting) since then, he’s not alone in being excited about superapps, which Gartner placed ahead of Generative Design AI on its 2022 Hype Cycle for Emerging Tech.

So, what makes a superapp? Wikipedia defines one as “a mobile or web application that can provide multiple services including payment and financial transaction processing, effectively becoming an all-encompassing self-contained commerce and communication online platform that embraces many aspects of personal and commercial life”.

The apps currently meeting that definition are mostly Chinese (WeChat, Alipay), South East Asian (Grab, GoTo) or Latin American (Rappi, OMNi) and a Western superapp looks far from inevitable.

This is partly due to the dominant position of Apple and Google in the mobile ecosystem in Western markets. Apple has more than 50% mobile handset market share in the US and UK, Samsung (which ships its phones with Android and Google Play) has 30% and Google Play is effectively a ‘must carry’ for the long-tail of Android handsets (just ask Huawei).

The handset market is much more fragmented in China and South East Asia, with no single manufacturer having more than a quarter of the market and Android handsets shipping without Google Play in China.

Apple’s strict App Store rules, coupled with its levy on in-app digital purchases and increasingly tight integration of Apple Pay - which Google has largely copied - leaves little room for third-party developers to create a “self-contained commerce and communication online platform” for Western markets.

Indeed, iOS and Google Android - operating systems rather than apps - are the closest the West has got to superapps and are becoming more superapp-like with each update (see Apple’s recent rollout of its Klarna-killing Pay Later service).

Web browsers are also starting to behave more like superapps, as Google and Apple (who, between them, enjoy an 84% share of the browser market) dial up the integration of their payment services with Chrome and Safari respectively.

Chinese superapps have also benefited from the banning of alternative communication apps (e.g. WhatsApp, Messenger) and strong incentives for Chinese citizens to use superapps to access public services.

Whilst Apple and Google might wish they could ban WhatsApp and Messenger to drive adoption of their messaging products, they must largely rely on carrots to increase users’ investment in (and thereby lock-in to) their respective ecosystems.

There’s also a bit of learned behaviour at play. Western smartphone owners have grown accustomed to high-spec handsets capable of running lots of apps which each do one thing well.

Apple has, over a number of years, unbundled iTunes into Apple Books, Apple Podcasts, Apple TV, Apple Music - and now Apple Music Classical - to better to compete in their respective verticals (it obviously helps if you own the operating system and can add your apps to users’ home screens without permission, as Apple recently did with Freeform).

Meanwhile, attempts to establish new verticals within existing Western apps have had mixed results. Facebook has probably had the most success, although for every Facebook Marketplace there’s been a Facebook Podcasts.

It’s telling that Amazon, which is strong is so many verticals, has largely resisted the temptation to try and bundle them into a superapp, maintaining separate apps for Amazon Music, Prime Video, Amazon Photos, Kindle, Audible, Alexa, Freevee and keeping Amazon Pay as a networked service.

It’s a company that seems to understand that the most important places to join up their disparate services are in their customer data stores and in the minds of Prime subscribers, not in a single front-end.

A single multi-domain front-end, especially one hosting third-party services, would also be more likely to be a target for regulators in the West.

Some Western companies are actively trying to evolve their apps into superapps. PayPal put out a slightly odd editorial piece last summer claiming “PayPal is ahead of the curve gearing up to become a fully-fledged super app”, followed by an app update which fell some way short of elevating PayPal to superapp status.

Uber (re)integrated its food delivery service with its main ride-hailing app in 2019, although I would be surprised if the majority of food orders aren’t still placed via the dedicated Uber Eats app, with the Uber app integration acting more like display advertising.

Whilst Apple tolerates superapps in some territories, it’s easy to imagine Western equivalents struggling to get through the App Store approvals process, as the aggregating nature of superapps inevitably encroaches on the role of the App Store (see Meta’s experience with Facebook Gaming on iOS).

For Elon Musk to realise his dream of a superapp, he would likely need to launch his own mobile operating system and/or handset. I suspect his ego would be very much up for that, but - unlike rockets, tunnels and electric cars - it’s hard to see a real market opportunity beyond the blue tick brigade of Musk acolytes.

It seems much more likely that Apple and Google will shore up their dominant position by further expanding their financial services, whilst making small concessions (to publishers and regulators) on app store taxes and web apps, keeping Western superapps at bay for the foreseeable future.