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Visa Navigate

January 2021


4 - 5 Minutes  (click play to watch the video)

The secret to SuperApp success

In most of the world, smartphone users switch between apps dozens of times a day, chatting to friends, shopping and banking online and booking services such as cabs. Not so in China, where the WeChat SuperApp accounts for as much as one third of all screen time, offering a range of services under one roof.

"They decided they wanted to surround the user with their app and their services, so that instead of going to five different apps in five different places, they should have five services within the ecosystem that you use," says Akshay Chopra, Vice President, Innovation and Design, Visa's VP Innovation and Design, Central Europe, the Middle East and Africa (CEMEA).

And WeChat has become a fundamental part of life in China: according to a recent survey1 from SP Global's Kagan research unit, it's currently used by 97 per cent of Chinese consumers, with 87 per cent using it for mobile payments and 78 per cent using it to book services.

Diverse origins & evolving offers

Outside Asia Pacific, SuperApps have been slower to take off but are making steady strides and emerging in a variety of sectors. In CEMEA, banks, Mobile Network Operators (MNOs) and others are launching new services that keep their users within their ecosystem. The UAE's Careem started out as a ride share company, but now offers everything from shopping and food delivery to financial services. Users can pay for bookings and purchases and send money to family, all without leaving the app. With COVID-19 putting pressure on cash flow, Careem now also offers drivers access to their earnings in near-real time.

"Drivers can be under a lot of financial pressure and didn’t previously have immediate access to money they had earned," says Will Dowling, Engagement Manager, Innovation & Design, CEMEA, Visa. "The recent partnership with Visa means that drivers can instantly pull funds from their Careem account to their Visa card."

In Ukraine, meanwhile, PrivatBank operates services including shopping and travel tickets, as well as financing, cards and insurance. Launched in 2001 as an internet banking system, its Privat24 SuperApp now has 12 million users – that’s 30 per cent of the Ukrainian population2.

The secrets to success

According to Chopra, businesses that are best placed to build SuperApps have three things in common. A large userbase, technical expertise in building apps with great user experience (UX) and they enjoy high levels of trust. In addition to operating in this so-called ‘SuperApp sweet spot’, Chopra also identifies three main factors in how successful SuperApps are developed.

"If you look at the evolution of successful SuperApps, one notable observation is that modular interoperable platforms scale fast," he says. "Modular means you don't necessarily try to build a SuperApp in one go. You develop and add new services over time in adjacent areas. And you don’t even have to get it right straight away. If you look at Alipay and WeChat, they launch so many services that they actually sunset later. The typical Alipay game has a time limit of a couple of weeks, so the ability to build things in modules means sunsetting is no problem."

Also key to swift scaling is to create the SuperApp as a platform on which other organisations can offer applications. "With Privat, for example, one of the reasons they succeeded was that you can go and buy their competitors' products from them," says Chopra. Similarly, while WeChat made steady progress from the outset, it was only when it opened up its platform to outside developers in 2017 that the app started to achieve its current dominance, topping a billion active monthly users in early 2018. And, says Dowling, the third factor behind successful scaling is interoperability. While many apps start with a closed-loop payment system, virtually all successful SuperApps move to open-loop payment services provided by a card scheme as a foundation for other services such as online marketplaces or ride share.

"Many of the world’s leading ecosystems and SuperApps eventually decide to partner with a network like Visa for scale" he says. "This can have a catalytic effect for these SuperApps and allow them to quickly build on the millions of merchant acceptance points, payment capabilities, cross-border functionalities, and security that a network brings to the table. We’ve seen this partnership trend play out globally with SuperApps like Rappi, Careem, and GoJek.”

Trust matters

While Asian SuperApps like WeChat or Alipay are all-singing, all-dancing environments containing dozens of disparate mini-apps, Chopra advises would-be players to start by adding services that have a good fit with their core business. "You have to think about fit. It’s unlikely that people would want to access something like TikTok on a bank app," he says. "There are certain kinds of services that people would be more comfortable with a bank providing than a messaging platform. A more natural route would be to offer financial products like cards and credit, insurance - for all the serious stuff, people are much more comfortable going to a bank than to a social media company."

A recent report3 from Genesys found that global consumers trusted banks more than any other organisation when it comes to data protection. And, says Dowling, "Today’s consumers are increasingly mindful of security and how their data is being used. If they trust the entity launching the SuperApp - whether it's a bank or another institution that they have a lot of trust in - they're much more likely to use the other services in the SuperApp."

How ‘super’ will future apps be?

Chopra concedes it is hard to predict where the next SuperApp in the CEMEA region will come from and exactly how big it might grow. “Mobile networks are well placed and can benefit from reaching the bottom of the pyramid but there are also inherent advantages for banks and messaging services,” he says.

Rather than replicating the breadth of the offer on WeChat, he argues that the next generation of SuperApps could provide services around a specific niche: “Reflecting consumer preferences and trust levels, you could well find that in the future, SuperApps serve a particular market – for example I can envisage ‘high trust’ apps on which banking and financial services are carried out and a second, practical SuperApp offering grocery, food, rideshare etc. A potential third niche would be a ‘fun’ SuperApp that includes social, chat and marketplaces for niche goods”.

While many unknowns remain, Chopra believes three things are clear: “First, COVID-19 has certainly made the SuperApp opportunity in CEMEA more apparent. The pandemic has moved so much commerce online and it has become clear that activity is scattered across too many apps - there is a clear demand. Second, the winners will be those businesses that adopt a modular, interoperable platform approach. And finally, experience tells us that SuperApps that integrate open-loop payments systems come out on top. I fully expect that to remain a key trend”.

If you would like to speak to Visa’s Innovation & Design team in Europe about SuperApps, please contact Michael Hoffman, Head of Visa Design Services, at innovation.europe@visa.com.

Originally published on Visa Navigate CEMEA

1 "2020 China online consumer survey", Kagan: https://www.spglobal.com/marketintelligence/en/news-insights/research/china-2020-survey-summary-covid19-crisis-accelerated-media-and-tech-trends

2 Provided to Visa by Privatbank

3 "Genesys Consumer Survey 2020", Genesys: https://www.genesys.com/collateral/genesys-consumer-survey-2020

All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

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