Summary.    Over the last decade, super-apps like WeChat, Alipay, and LINE have taken Asian markets by storm. Could similar platforms soon be coming to the U.S.? Elon Musk, Mark Zuckerberg, and other Western tech leaders have vocally shared aspirations of creating...

For more than a decade, the Asian tech ecosystem has been dominated by “super-apps:” platforms such as WeChat, Alipay, and Meituan that offer an enormous network of services all in one integrated app. In contrast, analogous services in the U.S. have remained largely distributed, with a larger array of apps and websites each offering users a smaller subset of functionalities.

Yet recent trends suggest this distinction may be shifting. When Elon Musk bought Twitter, he vocally argued that the move would accelerate the development of an “everything app” and even explicitly suggested that Twitter could become a “WeChat equivalent.” Mark Zuckerberg has shared similar aspirations for Meta and WhatsApp, describing a “super app–like vision” of an integrated marketplace and chat platform.

Given the scale of these platforms’ growth in Asia — WeChat, for example, boasts more than a billion active monthly users and more than a million “mini-programs” on its app — it’s hardly surprising that U.S. tech leaders are eager to replicate their success. But of course, the U.S. market is very different from those in which super-apps have developed, and it is defined by very different growth paths and market positions, as well as regulatory, technological, and cultural contexts. In light of these factors, it’s possible that the U.S. will develop some form of super-app…but it’ll likely be more super-ish than truly super.

What are super-apps?

A super-app is a single application, accessible by mobile device or web browser, that offers multiple diversified services for everyday personal or commercial life, relies on a common financial transaction platform, leverages intra-app data to tailor offerings, and is widely adopted.

These services range from social media and messaging to bookings for transportation, travel, and doctors’ appointments to food delivery to wealth management to e-commerce marketplaces to video games and countless other products and services. Organizing multiple offerings within a consolidated customer journey can boost user engagement, as well as create strong network effects and switching costs that lock in users, sellers, and advertisers.

The super-app model also provides companies with unparalleled access to a wide array of user data, all gathered within the app’s walled gardens. This data can then be algorithmically analyzed to triangulate consumer preferences; target ads; personalize recommendations, discounts, prices, and loyalty rewards; and facilitate cross-selling — all of which can create significant value.

Interestingly, different super-app services often don’t contribute equally to a company’s bottom line. For example, Meituan earns most of its profit through hotel and travel bookings, but the majority of its user traffic comes from food delivery services. Similarly, Alipay earns most of its profits from micro-loans, but it acquires most of its users through cheap or even free payment services. The super-app model enables platforms to strategically combine complementary services to create and capture value, often through substantial loss-leader offerings.

Super-apps have swept Asia — but not the U.S.

Over the last decade, super-apps have taken East, Southeast, and parts of West Asia by storm. Many of these apps started in countries with lower incomes: WeChat, Alipay, and Meituan in China; PayTM and Tata Neu in India; GoTo GoJek in Indonesia; and Zalo in Vietnam. But richer countries in Asia have also launched super-apps. South Korea’s Kakao Talk was founded in 2010 (a year before WeChat) and boasts an active user base of 87% of the country’s population. LINE, whose roots are in South Korea but is headquartered in Tokyo, is widely used in Japan. Grab, founded in Malaysia, is headquartered and widely used in Singapore.

Meanwhile, functionally similar discrete services are available through many apps outside of Asia, but consolidated super-app platforms have yet to emerge in the U.S. So why haven’t Asian-style super-apps found success in the American market? There are a number of factors at play:

Different growth paths and market positions

In the U.S., many leading tech companies started out before the widespread adoption of smartphones, offering narrow, web-only services on personal computers, such as search (Google), social media (Facebook), e-commerce (Amazon), and others. These companies later developed mobile apps, but each still offered only limited services on each app. This approach, while largely meeting U.S. customers’ needs to date, has fragmented the U.S. app market. Partially because of these legacies, a large number of U.S. tech companies have continued to offer apps with a single service or just a few services.

Concerns about user experience and technical issues have further cemented this trend. Many U.S. tech leaders have feared feature bloat: a phenomenon in which the addition of too many features makes an app slow to load, introduces frictions that impede user engagement, and potentially relegates some functions to being “second class” in consumers’ minds.

As a result, big players that might seem to have the potential to become super-apps have long avoided doing so. For example, we’ve talked to Google engineers who’ve indicated that the company’s larger apps, such as Google Maps, are already bumping up against infrastructure limitations, making them hesitant to further expand those apps’ functionality. Back in 2014, Facebook even intentionally spun off its Messenger app from its main app. And Uber kept Uber Eats separate from its ride-hailing app for years.

There are also organizational and financial reasons why super-apps haven’t taken off in the U.S. When each app can serve as a channel for advertising, companies may be reluctant to consolidate multiple app services into a single offering because doing so might cannibalize ad revenues. Also, development teams that have built an identity around one app may be reluctant to change that identity by combining with other app teams. Broader financing issues may also be at play: Research has shown that the U.S. stock market tends to react poorly to “unrelated” diversification — which may somewhat disincentivize the kind of activities necessary to create a super-app.

In contrast, the Asian tech landscape was not built on a foundation of fragmented, desktop-first businesses. Instead, many Asian consumers’ first experience with the Internet was with mobile platforms that were designed as super-app ecosystems from the ground up. Because these consumers weren’t already locked into a diverse array of separate apps, Asia’s early tech players were able to quickly grow their user bases as they incrementally bolted on new services spanning a wide range of everyday needs.

Another driving factor centers around payment systems. In the U.S., a legacy of reliance on credit and debit card payment systems has stymied the adoption of mobile fintech innovations. But in many Asian markets, credit and debit cards never became widespread, leaving room for the mobile payment systems that underpin many super-app ecosystems. In particular, many merchants in China have long been reluctant to accept debit and credit cards because of transaction fees and infrastructure requirements. Services like WeChat Pay and Alipay meet these needs by offering a largely free system for transacting and storing digital funds, all with limited need for infrastructure. And in markets such as Vietnam and Indonesia, large unbanked populations have boosted demand for digital wallets in super-apps.

Different regulatory environments

Of course, these different growth trajectories are closely intertwined with differences between the regulatory environments in the U.S. and Asia, especially China. Early on, some of China’s super-apps took advantage of limited government regulation related to data privacy protection and largely avoided anti-trust penalties. Both WeChat Pay and Alipay also owe some of their success to their underregulated use of customer funds stored in their digital wallets to invest in overnight funds and interest-bearing accounts, as well as to their facilitation of underregulated P2P lending. These apps were also not required to share important financial transaction data with regulators or implement robust systems to prevent money laundering and other illicit transactions.

These approaches to raising capital and expanding user bases would not have been possible in more tightly regulated markets. Indeed, Chinese regulators themselves have since cracked down on companies’ use of consumer funds as well as anticompetitive practices and data privacy. As such, neither WeChat’s nor Alipay’s early business models would likely work in China today — let alone in other, more regulated markets.

At the same time, the ways in which China regulates foreign apps more strictly than other countries also contributed to the growth of its super-app economy. While framed as necessary to maintain national security and social and moral order, China’s decision to block foreign platforms such as Kakao Talk and LINE, as well as Facebook, Google, Twitter, YouTube, Snapchat, and many other U.S. mobile and web app providers, also served to shield indigenous infant apps like WeChat from foreign competition. This regulatory stance afforded Chinese apps time and space to grow, making local app markets less likely to become fragmented.

Cultural differences

Finally, while culture is subjective and constantly transforming, differences in how the tech industry has developed around the world have been driven in part by substantial cultural differences between Asian and other markets. At a broad level, surveys from KPMG, Bain, and the World Bank have all shown that Asian consumers tend to be more willing to adopt new digital technologies, including super-apps, than their American counterparts.

Beyond these broad trends, there are also specific aspects of Asian culture that may have lent themselves better to super-app ecosystems. For example, a much more widespread culture of monetary gift-giving in China has been critical to the growth of WeChat’s digital payment system, which enables users to send digital “red envelope” money transfers to friends and family. A greater reliance on user-driven innovation, as well as consumers’ more collectivist culture and preferences, may have also helped super-apps to take hold in China. In addition, Asian consumers are generally more comfortable with large conglomerates that dominate many aspects of everyday life, which may have facilitated their greater acceptance of massive super-app companies. In contrast, Americans tend to view large corporations with suspicion, whether due to a simple distaste for excessively powerful companies or concerns about privacy and trust.

Shifting tides: Are super-apps coming to the U.S.?

Despite these differences, there are still reasons to think that something like Asia’s super-apps are coming to the U.S. Certainly the demand is there: A 2022 consumer survey found that 72% of U.S. respondents would be interested in using a super-app.

In fact, many tech companies outside Asia appear to be increasingly diversifying their offerings into more super-app-like ecosystems. Facebook’s main app now includes Meta Pay, Marketplace, Gaming, Dating, and Podcasts, and some reports suggest that the company is considering reintegrating Messenger back into the Facebook app. Similarly, Amazon’s app now includes medical consultation services, pharmacy services, grocery delivery, and content streaming. Spotify now offers not just music, but also podcasts, audiobooks, and video streaming. Uber now offers not just car rides, but Charter (for buses), Transit (for public transportation), Travel (for booking reservations), restaurant delivery, grocery delivery, and package delivery. Snapchat has expanded beyond image messaging to include movie ticket bookings, flashcards, and even a meditation tool. Hopper, a Canadian company with a growing U.S. user base, offers flight and hotel bookings, home and car rentals, and travel-related financial products.

Meanwhile, companies like Apple and Google appear obstinate in their choices to avoid app consolidation. But they are still gatekeepers of their massive quasi-super-apps: their app store ecosystems.

Considering all this, it’s increasingly clear that American interest in super-apps is more than romanticization by a few tech leaders. Moreover, there are several recent trends that may push the U.S. further toward the development and adoption of super-app-like products:

Regulatory pressures

Between the EU’s GDPR and a slew of U.S. data privacy laws, Western companies are facing increasing pressure to secure their users’ data. These regulations make it harder for tech companies to profit from acquiring user data from third parties or from sharing their own data with other companies. Amidst this changing regulatory climate, Apple recently made it more difficult for third-party iOS apps to share data for ads with other companies, and Google is planning a similar approach for Android. All these regulations may push other companies to work harder to keep user data within their own apps — essentially incentivizing app consolidation.

At the same time, the U.S. Federal Trade Commission has expanded its investigations into possible anti-trust violations among tech giants such as Alphabet, Amazon, Apple, Facebook, and Microsoft, and is ramping up its capacity for future investigations. Lawmakers have also proposed a variety of stricter anti-trust laws targeting Big Tech, all of which could make expansion via M&A increasingly risky for these companies. This anti-trust pressure might push platforms to try to lock in current customers even more securely to their own apps, driving further internal investment into diversified digital services.

Changing demographics

On average, younger Americans are more interested in mobile gaming, new social media, and other digital services that fit well within super-apps. They are also more trusting of large tech companies, and less averse to sharing their data with these platforms. As these generations of consumers grow larger and represent greater purchasing power, they’re likely to drive demand for super-apps, with companies such as Meta already explicitly targeting young people as the early adopters of their new products.

At the same time, older consumers are also increasingly interested in engaging with digital platforms. A 2022 study from the Pew Research Center found that Americans over 64 are more interested in adopting new digital technologies, and more likely to own a smartphone, than ever before. The report also found that older Americans’ presence on social media grew about fourfold since 2010, with nearly half of respondents saying they use social media sites like Facebook, Twitter, or Instagram. These trends suggest the U.S. market for consolidated super-apps is increasing — and is likely to continue to do so.

App overload

Another factor driving interest in super-apps among American consumers is app overload. From booking a haircut to paying phone bills, it can seem like even the simplest activities now require consumers to download a dedicated app. While these apps may add value in some cases, downloading, setting up, using, and updating so many different apps can be incredibly frustrating.

App overload can also create accessibility issues. Some people have smartphones with enough storage space to accommodate the increasingly massive data demands associated with so many apps — but not everyone does. As app overload becomes more and more untenable, consolidated super-apps begin to look increasingly attractive.

Technological change

Finally, while today’s super-apps can largely be defined as smartphone-based app ecosystems, new technologies may spark entirely new kinds of super-apps. Generative AI tools such as ChatGPT, DALL-E, and Google’s Bard offer new possibilities for how we access information and create content. Blockchain and stablecoins have the potential to safely reduce frictions across the global financial system, and the U.S. Federal Reserve is even developing a sovereign digital currency that could further accelerate fintech innovation. Virtual worlds like Meta’s Horizon Worlds may be marred by challenges, but it isn’t hard to imagine immersive products like these “out-supering” today’s super-apps. In short, foundational technologies in AI, blockchain, VR, and other fields may create opportunities to develop complementary tools and super-app-like ecosystems that build on, share, and commercialize their outputs.

At the same time, the Web3 movement may complicate this optimistic outlook for Big Tech seeking to build the next big super-apps. The movement, which has seen users increasingly interested in connecting via decentralized networks rather than on established, centralized platforms, may push some people away from a Big Tech, for-profit super-app.

Get ready for apps that are super-ish

So is Elon Musk going to make Twitter the new WeChat? It depends on how one interprets that ambition. On one hand, the most literal interpretation seems unlikely to pan out, as the next wave of apps in the U.S. will probably not look the same as those that have dominated Asia. The differences in growth paths and market positions, regulatory environments, and culture that have kept super-apps from taking off outside Asia will continue to influence the development of new platforms. This will likely limit U.S. companies’ ability to achieve the same product diversity and user bases that typify the big-name Asian super-apps.

On the other hand, shifting regulatory pressures, changing demographics, app overload, and technological changes are already pushing American tech companies toward potentially creating their own “lite” versions of the super-app. So while the biggest super-apps may be limited to the Asian market, super-ish apps may indeed soon be coming to the U.S.