Super apps are coming, and they’ll never let you go - The Verge

Say you want to see Japanese Breakfast play in Sacramento next week with a couple of friends. The process of going requires jumping between at least a few apps — you might coordinate plans on WhatsApp, buy your tickets from Ticketmaster, book a ride through Uber, and pay each other back for drinks over Venmo.

But what if all that activity happened in one app on your phone?

Over the next several years, I predict that the biggest social media companies around the world will become super apps, acting as gatekeepers to a wider array of things people do online. While they started as ways to mainly keep in contact with friends and family or be entertained, these social networks — Facebook, Snap, and TikTok, for example — will become increasingly important ways people shop, bank, and entertain themselves. Some of these firms that started in the US, such as Snapchat, are already starting to resemble super apps, even though they’re still primarily thought of as social networks.

The idea of the super app first gained popularity in China with WeChat, the messaging app that essentially acts as a platform for facilitating life online in the world’s most populous country. WeChat doesn’t just let you message your friends and see their updates in a feed; it can also be used to take out a loan to buy your next car. Commerce done through mini-apps that WeChat lets other developers build on its platform reached a staggering $240 billion last year alone, more than double from the previous year.

In the Western world, social media firms are playing catch-up. They’re morphing from single or dual-use case apps — messaging friends or browsing feeds of content — to encompass more and more of what people do online. Last year, Facebook started adding shopping features that keep users from needing to complete purchases elsewhere. The head of Instagram, which is part of Facebook’s family of apps, recently made headlines when he said the app was no longer primarily about sharing photos.

WhatsApp, which is also part of Facebook, recently added a directory in South America to let users find local businesses, and in India, it’s trialing banking products like loans. Twitter started as an SMS, text-based service, but now, it lets users natively host audio rooms and newsletters and put their tweets behind a paywall. TikTok recently added an in-app shopping experience and introduced a platform for developers to build their own app experiences into its main video feed.

Out of all the big social media firms not from China, Snapchat is perhaps the furthest along towards becoming a super app. A few years ago, it introduced mini-apps by other developers that let people do things like play games together, mediate, or book movie tickets — all without leaving the app. There are now more than two-dozen mini-apps in Snapchat, though the company hasn’t disclosed overall usage of them yet.

In a crowded landscape of apps, becoming a super app is mainly about becoming more integrated into people’s lives and maintaining a grip on their attention, whether it be an endless feed of short videos or an easy way to find clothes to buy.

“Any company that has an app, you’re really focused on getting to the point of being a Home Screen app,” said Nicole Quinn, an investor at Lightspeed Venture Partners who has backed the mental health app Calm and Cameo, an app that lets you book shoutouts from celebrities.

A tectonic shift in how the ad-supported app economy works is also driving the rise of super apps. Social media companies that largely thrived from tracking users across different sites can no longer be sure that their ads will lead to someone buying something elsewhere. That data sharing has historically let apps easily track users as they move around the internet, in turn giving advertisers a strong signal about the kinds of ads specific people will respond to.

Apple recently made it harder for third-party iOS apps to share data with other companies for advertising purposes, thanks to a new prompt that’s now shown to users. Google is planning a similar approach for Android and has already announced the end of third-party cookies in its Chrome browser. Regulators around the world, particularly in the European Union, are in addition contemplating laws that would further restrict the sharing of user data between different companies.

Simply put, if ad-driven platforms like Facebook can’t track how people interact with other apps, they’ll work more to keep people in their apps as much as possible, especially for activities that involve money like shopping. Eric Seufert, an influential ads industry analyst and consultant, calls this phenomenon the rise of “content fortresses.”

Since these changes by Apple and regulators largely don’t restrict how apps collect data about their own users, that first-party data is now more valuable. If a Facebook user makes a purchase without leaving to complete it in another app or website, Facebook can provide that information to the advertiser who paid for the ad that led to the purchase. Advertisers, in turn, pay more money when they know their ads work.

WeChat, by contrast, has been decidedly slow to build an ads business, instead opting to take a cut of transactions done through its app and native payments service. Its parent company Tencent makes most of its money from other areas, such as its many gaming divisions.

Also helping this trend of super apps is pressure being put on Apple — which controls the most lucrative and second-largest mobile app platform — to loosen its grip on what apps are allowed to do on iOS devices. Apple’s rules currently forbid third-party developers from hosting app stores within their apps, and they’re, for the most part, not allowed to accept purchases in their apps without paying Apple 30 percent. Thanks to legal pressure, that’s starting to change. And if Apple’s rule that bans app stores within third-party iOS apps is ever undone, social networks like Facebook could be freed to host app stores themselves, letting people more easily discover mini-apps or web games within their apps.

The biggest risk to companies with super apps — or ambitions to become a super app — is the increasing scrutiny of the tech industry’s power. Regulators in the US and Europe are increasingly more critical of the biggest internet platforms. Even China has, in recent weeks, started forcing WeChat and other local firms to open up their platforms to rivals. It’s a sign that the country where super apps first rose to prominence now sees them as having too much power.

For now, the biggest super apps are still in China, and they are well ahead in terms of developer activity. There are about three million mini-apps in WeChat and about 1 million in Alipay, the second most popular super app in China. Users in China and other non-western countries have flocked to super apps over the past several years, but it remains to be seen if the concept will take hold with people elsewhere who are already accustomed to downloading lots of apps for different purposes.

The main contenders for super apps are apps that integrate payments, according to Kaniyet Rayev, the CEO of a new startup called Appboxo that builds tools to easily let companies create mini-app platforms inside their apps. He started the company after taking a trip to China several years ago with his cofounder Nursultan Keneshbekov, where they observed how much time locals spent using WeChat. Appboxo is now working with companies in southwest Asia, India, Japan, and other parts of the world to help them build developer platforms inside their apps, said Rayev.

“We are betting on the whole ecosystem becoming big.”

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