In recent times, the once-popular super-app business model, popularized by Asia’s success stories, such as WeChat and Alipay, has come under increased scrutiny from regulators and funders. The concept of bundling various services into a single platform to create stickiness and generate profits seemed like a surefire strategy, but many companies have struggled to replicate the success seen in China. The initial hype around expanding the super app model globally has waned, with companies shifting their focus towards other trends, such as embedded finance.
One of the key lessons learned from the rise and fall of the super app model is the importance of market dynamics. China’s success with super apps was fueled by unique conditions, such as mobile-first consumer behavior, a lack of legacy infrastructure, and opportunities to build consumer trust. Companies outside of China have found it challenging to replicate this success due to different market dynamics, ultimately leading to the model’s lackluster performance in other regions.
Another challenge with the super app model is the inherent tension that arises from bundling too many services into one platform. Companies face significant challenges in terms of user experience, brand management, regulation, organizational structure, and more when attempting to combine a wide range of services into a single app. Some companies have realized that focusing on doing a few things well may be a more viable strategy than trying to be a jack of all trades.
The financial industry’s ever-changing landscape has also played a role in the decline of the super app model’s popularity. The emergence of embedded finance, which involves integrating financial services into various consumer apps and experiences, has diverted attention away from the all-encompassing super app model. Companies are increasingly exploring opportunities in embedded finance rather than pursuing the super app strategy.
Moreover, the importance of locally tailored solutions cannot be overstated. What works in one market may not necessarily work in another due to differing consumer needs, cultural contexts, and regulatory environments. Homegrown players that are deeply attuned to local conditions often have an advantage over imported super apps that may not resonate with consumers in a particular market.
While the super app model may not be completely dead, it has certainly faced significant challenges that have forced companies to reevaluate their strategies. Building a successful super app requires a rare combination of local market insights, long-term focus, financial resources, and impeccable execution across multiple domains simultaneously. As the industry shifts towards more nuanced approaches tailored to specific markets, super apps will likely continue to play a role but may not be the universal endgame that was once envisioned.