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The question “Why do super apps exist in China, but not the West?” came up recently within the @reforge community.
@onecaseman and @crystalwidjaja were kind enough to leave their thoughts
@onecaseman and @crystalwidjaja were kind enough to leave their thoughts
@onecaseman main hypothesis is a lack of competition.
1. Lack of competition due to to protection of the Chinese government. Wechat is not as powerful if Facebook, Pinterest, Twitter, etc. are allowed to operate within China
1. Lack of competition due to to protection of the Chinese government. Wechat is not as powerful if Facebook, Pinterest, Twitter, etc. are allowed to operate within China
2. The internet largely started with mobile in China so there wasn’t an entrenched the group of incumbents transitioning their successful web business into mobile apps.
3. Facebook, the company best positioned to build a super app in the West, was slow to adopt a mobile native strategy — instead they made a big investment in mobile web. They had also made a big bet on a web-based platform right before mobile smart phone adoption soared in the US
4. Chinese development talent was not as sought after, nor as expensive, as American developers so a couple companies hired thousands of engineers very quickly and networks effects formed around the products those engineers built
5. Lack of entertainment infrastructure in China led to faster adoption of mobile use cases than in the US...
5 (...cont). Movie Theaters, chain restaurants, bars, etc. had been around for decades in the US, but none of that infrastructure existed in most Chinese cities, which had recently urbanized. So mobile internet took all those use cases
While this did not replicate in the U.S., it did replicate in other markets that experienced the rapid rise in population, urbanization, and internet access similar to China, like Gojek in Indonesia and Rappi in Colombia
It’s also interesting to note that the in the West we can actually observe an active unbundling of super apps. Facebook split off messenger and arguably put distance between FB and Instagram by removing links back to Instagram. Uber also unbundled Eats from the main Uber app.
Casey’s thesis is that FB is a super app in different communication use cases (Groups, Marketplace, Dating, Facebook Watch, Gaming, Events) instead of transactional use cases. And since they did not build the mini-program model of WeChat, the app kept getting bigger and bigger.
As FB tried to grow in markets that had slower and slower internet and smaller and smaller space on the devices, unbundling allowed them to have higher conversion rates in those markets.
This starts to merge with @crystalwidjaja’s main hypotheses that mobile device restrictions in size, bandwidth, and data usage give super apps an advantage for consumer adoption in places like Indonesia, China, and Colombia
1. Less storage space means more application competition: The most common devices in these countries hold everything Americans would typically save in a laptop. If one app can do the same thing as 5 other applications, most people will delete the 5 and keep the super app
2. Data usage is still expensive in SEA — while super apps can build partnerships with telco companies to subsidize usage for their customers, single-play applications will not see a strong ROI given the user's limited spend on their platforms.
2 (...cont). On the other hand, Gojek partnerships with telcos were high ROI and Gojek could provide its services to users who would have otherwise had no internet access while it also became the defacto solution for in-app services like mobile topup recharge.
3. Lastly, SEA consumers are less critical of a single company having access to a wide dimension of consumer data. People are familiar with conglomerates operating in many industries. In the US, people seem more skeptical of companies that compile data across industries <end>
