The End Of The Super App Dream

A few weeks ago, I discussed how super-apps across Asia faced more scrutiny from regulators and funders. A few people reached out on my LinkedIn with their own thoughts about the super-app business model and why it would or would not work in X country. This made me think about what specifically about the super-app business model wasn’t working. It seems straightforward: bundle apps, create stickiness, and profit. What has gone wrong?

Living The Dream

For several years, there was much hype and excitement about copying China’s immensely successful “super app” model to the rest of Asia and the world. China’s Super apps, WeChat and Alipay, brought together products and services in a seamless platform, offering everything from messaging and social media to ride-hailing, food delivery, and financial services.

The model had other platforms and VCs salivating over the data and cross-selling possibilities. “We’re a super-app” became a rallying cry with the promise that by bundling a wide range of useful services into a single app, companies in other regions could achieve similar market dominance and stickiness with consumers—or at least increase their valuation…

However, the enthusiasm around super apps expanding globally seems to have died down considerably as of late. While some companies are still pursuing the super app playbook in markets like Latin America and Africa, the hype cycle appears to have shifted to other hot trends like embedded finance.

Lessons Learned

There are a few different lessons about the business models to learn here.

Firstly, WeChat and Alipay were successful because of market dynamics. China had unique conditions, including mobile-first consumer behavior, a lack of legacy infrastructure, and greenfield opportunities to build consumer trust. I still remember in 2004 buying a flight online in China. The experience was horrible. The only payment choices were the bank’s online payment platforms, which I’m sure you could imagine slightly lacking in user experience or cash. Most of the time, I opted for cash. The delivery person would show up; I would give them money. Simple, but not optimal in so many ways.

Alipay and Tenpay (WeChat Pay’s predecessor) focused on making online payments easier and removing that point of friction, which they then repeated for offline payments, wealth management, etc. If online payments in China were easy, as they were in a place like the US, where card and card acceptance online are high, it never would have happened. If the market dynamics are different, the model doesn’t work.

Secondly, there is an inherent tension in bundling too much. Combining a dozen different services into one app creates meaningful challenges around user experience, brand, regulation, organizational structure, etc. Companies may realize the most straightforward path forward is doing a few things well rather than being a jack of all trades.

Thirdly, the financial industry is fickle. New trends constantly usurp the industry narrative; the latest is embedded finance. Embedded finance presents the potential of seamlessly integrating financial services into all sorts of consumer apps and experiences. In a sense, rather than a single do-everything super app, the future may be all our apps having built-in payments, lending, insurance, and so on. Companies are increasingly focused on these embedded finance opportunities.

Finally, locally tailored solutions. Consumers gravitate to the best solutions for their specific needs and cultural context. What has worked in China or Indonesia won’t necessarily translate to Nigeria, Brazil, or the US. Homegrown players deeply attuned to local conditions likely have an advantage over copy-and-paste super app imports.

The Super App Is Dead, Long Live The Super App

To be clear, I’m not pronouncing the super app model dead or saying we’ll never see successful super apps emerge beyond Asia…or maybe I am. The fundamental premise of making consumers’ lives more convenient by bundling many services together remains attractive. And in the right circumstances, with the proper execution, it may prove a winning strategy in other markets.

But the reality is that building a super app is brutally hard, requiring a rare combination of local market insight, long-term focus, deep pockets, and impeccable execution across many domains simultaneously. The unbridled enthusiasm of a few years ago has given way to a more sober recognition of these challenges. The dream of super apps conquering the globe was perhaps always overblown – the future is likely to be more nuanced, with a range of approaches succeeding in different markets based on their specific dynamics and needs. Super apps will undoubtedly play a role but are unlikely to be the universal endgame some had prophesied.