American internet companies that think they can win at monopoly have shown up much too late to the game.
Tencent’s WeChat app in China is the classic example of a super app, integrating messaging, payments and many other services all in one. Users can play games, order food, hail a ride, send each other cash and book travel—all without leaving the WeChat app.
It is easy to see why this model would be appealing to tech entrepreneurs in the West. Why corner one market if you can corner them all at once?
“Buying Twitter is an accelerant to creating X, the everything app,” Elon Musk tweeted this week after agreeing yet again to acquire Twitter. His plans are vague, but he has suggested that Twitter could marry information with entertainment and that it could grow to over a billion users in five to 10 years if he is successful.
He isn’t alone. Earlier this year, Zillow co-founder Rich Barton teased plans for Zillow’s next frontier as a “housing super app” that “turns dreams into transactors.” That vision entails a single platform connecting all of the fragmented pieces of the moving process.
Meanwhile, having expanded into delivery though Eats, Uber Technologies is now adding taxi and other travel bookings to its platform.
Even those pursuing this strategy know it has limits. After failing to profitably build automated “iBuying” into its platform, Zillow is now partnering with Opendoor in automated home flipping, basically funneling business to a competitor in an effort to keep its own customers coming.
Uber’s move, meanwhile, comes less than a year after Chief Executive Officer Dara Khosrowshahi called super apps “more of an Asia strategy” at a travel-industry conference, adding that—at least at the time—“separate apps for consumers is the right way to go,” as reported by travel industry news site Skift.
Separate, it seems, has been more of the American way: We use Venmo to pay friends, Snapchat to share pictures, Uber to get a ride, DoorDash to order food, and Twitter to share news with strangers.
By contrast, WeChat’s super-app model arose from a unique set of conditions in China. The internet landscape and payments infrastructure were much less established when the first smartphones arrived. China was a largely cash-driven economy, with very few Chinese even using credit cards. When Alibaba and Tencent introduced online payments, they leapfrogged over cards to quickly become a ubiquitous payment method.
On top of this was the high concentration of market power in the hands of just a few internet companies, including Tencent and Alibaba. This has been somewhat reversed by the tech crackdown of the past couple of years; but for a long time these companies were scooping up minority or controlling stakes in virtually every promising internet venture in China. These partners helped WeChat provide a steady stream of services and offerings, while access to rivals’ services from within the app was blocked. Many in Asia have tried to follow suit, including South Korea’s Kakao, Japan’s Line or Grab in Southeast Asia, though never with the same level of dominance.
In the U.S., the model will be very difficult to replicate not only due to regulatory scrutiny, but also because competitors in payments, gaming, e-commerce and so on are already so well established. Building an “everything app” in the U.S. now would mean taking all of those companies on, instead of co-opting them as Tencent did.
Bonds of trust between people who already knew each other in the real world and used WeChat to communicate facilitated its rise as a payments platform: One early application was to send friends and relatives virtual “red envelopes” of cash for the Lunar New Year.
Mark Zuckerberg seemed to be thinking of something similar when Facebook acquired WhatsApp in 2014, but today that app remains largely focused on messaging, still mostly siloed from the broader Meta family.
Meta has tried many times to inject payment services into its ecosystem, with very limited impact. There was, of course, the ill-fated Libra cryptocurrency project. But well before that in 2014, Facebook hired a top PayPal executive to run its Messenger service, and subsequently added the ability to pay another person on Messenger in 2015. It later launched its payments into a broader service, called Facebook Pay, which could be used to shop on its platforms. Unlike other payment buttons such as Apple Pay or PayPal, it couldn’t be used to pay outside Facebook’s platforms until last year. This year, the service was rebranded as Meta Pay.
Now the metaverse could provide another chance. Much the way Mr. Musk said consumers “basically live on WeChat” in China, Mr. Zuckerberg’s dream is for consumers to live, work, pay and play in his ‘verse. As an entirely new market, and with Meta’s commanding share of present-day virtual-reality hardware, the metaverse presents perhaps the best shot for a super-app model to take hold in Western markets.
But only if regulators and competitors allow it to commandeer that virtual corner first.
—Telis Demos contributed to this article.