Much has been written about the so-called “Super Apps” in China such as WeChat and Alipay, including in Mercator member research. These apps began life as communication platforms, expanded into payments and then allowed millions of mini apps to exist within their ecosystem to manage any digital activity you can think of. Forbes published an article, Elon Musk And The Super Alluring Dream for a ‘Super App,’ outlining Elon Musk’s interest in building super-app capabilities around Twitter, should he buy the company. It’s an interesting idea and given his large following, the strength of Twitter and the connection to sister company Square, Musk might be able to pull this off. Although, super apps here in the U.S. do not have as robust an ecosystem as those in China. Here’s an excerpt from the Forbes article:
For Elon Musk’s acquisition of Twitter to work out as he’d like, Musk must find some way to supersize the company. Its business is long-undersized compared to the platform’s presence in culture and politics.
As a model, Musk has set at least some sights on the original so-called “super app,” WeChat, which is owned by China-based Tencent. In Musk’s first town hall meeting with Twitter employees last week, he directly mentioned WeChat, indicating that building something like it would further his broader goal of nearly quintupling Twitter’s user base to 1 billion people. “There’s no WeChat equivalent out of China,” he said at the meeting. “There’s a real opportunity to create that.”
So why isn’t Facebook or Snap a super app already? Largely, the U.S. companies have struggled to tie in the payments part of WeChat’s ecosystem to their own. They have tried, and the desire remains. Facebook tried and failed with a cryptocurrency, Project Libra, but is reportedly working on adding other virtual coins and lending services. Last year, Pinterest considered selling itself to PayPal for $45 billion, a deal grounded in the same mindset. And Instagram has made great hay out of its expanded shopping tools, including the ability to check out directly through its app. Again, same mindset: Payments, media, messaging.
A simple factor may be what’s holding them all back from achieving super app status. U.S. adoption of mobile payments has significantly lagged China’s. More than 80% of adults in China use mobile payments. In America, the figure is likely less than a third. So even if Instagram, Facebook and Snap had attractive payments features, they’d still face the lackluster demand for mobile payments, which amount to no small part of WeChat’s rise.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group