FB Pixel no scriptSuper apps: nothing much super about them | KrASIA
MENU
KrASIA
Opinion

Super apps: nothing much super about them

Written by Contributor Published on   8 mins read

Share
Super apps exist for selfish reasons, not for a better user experience.

This article is part of KrASIA’s contributor opinion series where experts share their views on technology and innovation in Southeast Asia. It was first published by Sheji Ho on his Medium page.

Recently, an impressive report by the South China Morning Post called ‘China Internet Report 2019’ made the rounds of the internet. In it, the report heralded the rise of China as a technology and innovation superpower, with companies like WeChat and ByteDance leading the way with new concepts like ‘super app’ and ‘Social+’ (latter referring to group buying and live video in ecommerce).

Touting China’s influence, the report shows examples of how companies outside of China have increasingly adopted these new concepts. In Southeast Asia, Grab and Gojek now also happily consider themselves ‘super apps’. In the US, Amazon has launched Amazon Live, its own version of live streaming, while Facebook came up with Lasso, a short video app inspired by ByteDance’s TikTok.

(Full disclosure: SCMP is owned by Alibaba, whose business models and products are obviously featured in the report as well.)

‘China Internet Report 2019’, South China Morning Post.

Most of the report rings true and comes at a time when many tech companies are increasingly looking to China for ‘inspiration’ and business models to copy. In fact, in Southeast Asia where I’ve spent the last 6 years after leaving China, the term “Copy-from-China” is becoming more and more popular among startups.

‘Chinese Internet Giants in Southeast Asia’, Nomura China Investor Forum 2018, Author’s slides

Whereas a decade ago people would still look for US models to copy, nowadays people are increasingly searching for Chinese business models to import. That said, while the report provides an extensive overview, unfortunately most of it is descriptive. There’s very little analysis as to the “why” these concepts originated in China.

In this article, I’ll dig deeper into the ‘super app’ concept because it’s becoming increasingly popular in Southeast Asia. There’s a lot of media hype and noise around this topic but very little fundamental analysis behind it.

China didn’t invent ‘super apps’

Let me start by dispelling the myth that China pioneered the super app. If you’re as old as I am, you should have seen super apps before. History always repeats itself.

Please have a look at the below 3 company descriptions (from Wikipedia). Names are obviously disguised (scroll down to the very end of this article to find out who these companies are).

“Company A was an online service from 1984 to 2001 that offered its subscribers access to a broad range of networked services, including news, weather, shopping, bulletin boards, games, polls, expert columns, banking, stocks, travel, and a variety of other features.”

“Company B’s product is a mobile internet (distinct from wireless internet) service popular in Country B. Unlike Wireless Application Protocol, Company B’s product encompasses a wider variety of internet standards, including web access, email, and the packet-switched network that delivers the data. Company B’s users have access to various services such as email, sports results, weather forecast, games, financial services, and ticket booking. Content is provided by specialized services, typically from the mobile carrier, which allows them to have tighter control over billing.”

“Company C provides or provided a Web portal, search engine, and related services, including a directory, email, news, financial services, group discussions, questions and answers, advertising, online mapping, video sharing, fantasy sports, and a social media website. At its height it was one of the most popular sites in the United States.”

From reading these descriptions, all three sound like your typical super app and the truth is, they are. super apps have been around for ages because they are nothing but an old trick out of the business strategy playbook.

Super apps are here purely for selfish reasons, not for a better user experience

For a while, I’ve been trying to wrap my head around the super app concept. With super apps allegedly being pioneered in China, I was trying to understand if this was another case of unique local Chinese user behavior.

Back in the mid 2000s, there was always this discussion about Chinese internet users being different. Just a quick comparison of Chinese versus US websites from back in the days would make one think there was actually some difference in user behavior. All this was — and still is, unfortunately — exacerbated by agencies looking to charge international brands a fortune for UX consulting and localization.

‘Why Do Chinese Websites Seem So Cluttered’, Sampi.com

I am guilty here too, having spent countless hours on conference calls with US headquarters to argue for resources to change our local product “because Chinese users behave differently.” (They don’t. It only appears they do because markets are at different stages of development.)

Chinese and ‘Western’ website designs eventually converged because deep down, fundamental user behavior isn’t much different across cultures or markets. Regardless of origin, users want to find information easily and quickly, want websites and apps to load quickly, look for social proof, etc.¹

“When it comes to defining noticeable differences between Eastern and Western cultures, it’s safer not to assume anything. We sometimes hear that, for example, mainland Chinese users like busier home pages or have a higher tolerance for poor design,” says Daniel Szuc, founder of Hong Kong-based UX research consultancy Apogee.

“This is largely a myth, and in our research we have discovered that Chinese users appreciate simple, goal-driven design as much as Western users do. We have also noticed that mainland Chinese users are receptive to playing with or hacking technology to get to what they need. They may be willing to spend more time doing this to achieve their goal, but does it mean they are happy about it? Probably not, but they do seem to demonstrate more patience around poor product delivery,” added Szuc.

There’s a good reason why portals like Yahoo and AOL eventually got unbundled into vertical media, the same reason why that famous Craigslist unbundling chart exists. It’s difficult to try to do so many things and still be able to provide the best and consistent user experience across all products and services. This is the very same reason big companies grow, get bloated, and eventually lose (parts of their business) to startups. Schumpeter’s creative destruction in full effect here.

‘Unbundling Craigslist’, Andrew Parker, Spark Capital

Alibaba’s Taobao was the original ecommerce super app, yet it had to unbundle itself by splitting out Tmall from Taobao so the latter could focus on a more premium audience. In the last few years both Taobao and Tmall have lost ground to the likes of Xiaohongshu (premium, female users) and Pinduoduo (lower-end, bargain hunter users). The latter two upstarts were able to win by focusing on doing a few targeted things very well.

@BrianNorgard (ex-Chief Product Officer, Tinder)

All this makes it really hard to understand why the super app of today even exists, until you ask yourself what if actually super apps are not here to provide a better user experience but solely for selfish business reasons?

The modern super app did originate from China, but not for the reasons you think

China’s internet ecosystem is unique in many ways but most notably for its lack of customer acquisition and online distribution channels.² The whole topic warrants its own separate discussion but basically boils down to the following:

  1. There’s no ‘long-tail’ distributionThere’s a lack of ad networks (read this article as to why)
  2. ‘Big head’ distribution is an oligopolyTwo portals (Sina and Sohu) along with ByteDance, Tencent and Baidu own most of the online media channels
  3. Baidu doesn’t act like Google (The art of Search Engine Optimization or SEO in China died a long time ago)No free lunch (organic SEO traffic)

Given the above 3 drivers, tech companies are left with very few if not zero options to scale their businesses online in China. Hence, it shouldn’t be a big surprise that one of the largest and most popular customer acquisition channels in China is just to give out free money (via subsidies):

  • WeChat -> Hongbao / red envelopes
  • Didi -> Driver and rider subsidies
  • Ofo/Mobike -> Rider subsidies

Giving out free cash is an expensive and risky customer acquisition strategy (to which Ofo can certainly attest). Once successfully done, Chinese companies are motivated to make the most of their freshly acquired user base. The last thing they want to do is to start throwing cash at people again for them to download another app.

This is where the super app strategy comes into play. Give out free cash -> get users to download app -> introduce users to new services and products within the same app -> “App-in-App” / “Mini-Apps”. Basically, the “parent app” itself becomes a new distribution channel for the company.

If you think Chinese users enjoy going 10 layers deep into an app to consume a certain service then you’re too naive. This is all done so companies can make more money by paying less for customer acquisition.

After clicking through yet another pop-up in the Grab app, the last thing someone wants is to jump through a few more pop-ups in the GrabFood app-in-app.

Super app strategy could work in emerging Southeast Asia, but not elsewhere

Emerging Southeast Asia (that is, SEA excluding Singapore, Malaysia and the Philippines) is the new China.³ There are no decent ad networks. Local portals combined with Facebook and Google dominate online media.

This is why ‘super apps’ like Grab and Gojek are replicating the Chinese super app strategy, building out their own customer acquisition channels.

That said, this is only part of the story. With Uber and Lyft’s struggles and scrutiny post-IPO, the likes of Grab and Gojek have been pivoting towards the super app narrative as they prepare for their eventual IPOs.

Next 10–20 years: unbundling of super apps

Chinese — and Southeast Asian — super apps are supply-driven (push), not demand-driven (pull). In other words, the super app concept purely exists because it serves a business goal, not because it’s something that users demand. Users prefer the best possible experience and this is only possible by reducing the scope instead of trying to do everything on the planet.

Super apps are just like boom and bust cycles, and as we go into the next few decades of internet growth, we may see history repeat itself again and witness the modern super app being unbundled as users become more sophisticated and discerning.

About the Author: Sheji Ho is a marketing professional based in Bangkok. He was Group CMO at ACommerce and is now co-founder and CEO of his own startup, which is still in stealth mode.

===

The super app “OGs”

Company A: Prodigy (https://en.wikipedia.org/wiki/Prodigy_(online_service))

Company B: I-mode (https://en.wikipedia.org/wiki/I-mode)

Company C: Yahoo (https://en.wikipedia.org/wiki/Yahoo!)

Footnotes

[1] Some good resources on Chinese UX: http://ub.triviumchina.comhttp://www.thepixellary.com, and https://www.zcool.com.cn

[2] China’s lack of online distribution channels is also why “growth hacking” or the profession of online user acquisition never took off, compared to Silicon Valley, Europe or to a lesser extent, Southeast Asia.

[3] Singapore, Malaysia and the Philippines are majority English speaking and users in these markets consume global, English media. Therefore, companies in these markets have access to ad networks and distribution channels that reach a global, English speaking audience. Singapore also developed much earlier and is an outlier in many ways in Southeast Asia.

Share

Auto loading next article...

Loading...