The superapp race is on!

April 16, 2024
Renier Kriel
Renier Kriel

One app to rule them all. Extreme power, extremer revenue. Who will become SA's first super app?

A few weeks ago we reported how you can buy doughnut vouchers using a credit line in your Vodacom app. Well, you can now also buy an on-demand security subscription with your DSTV. Has the world gone mad? No, everyone is just trying to be a SuperApp. Let us explain

Youre not getting it

Thats what Elon Musk said to a Twitter employee who asked questions about his planned SuperApp, just called X. The reason people arent getting it, is that they think X will simply be a neobank or allow paymentsa new form of PayPal if you will.

Meetings at Twitter HQ are getting rather uncomfortable.

But theres more to SuperApps than simply adding features or adding payments. The SuperApp philosophy is about attention conversion. How do you convert time spent at a specific place (in this case, in an app) into more revenue?

The concept isnt novel.

Shopping malls are built on the same premise. Modern malls are massive, designed to make it hard for you to find your exit, and offer an array of attractions and distractions to keep you there. The longer you linger, the likelier you are to spend more money.

Thats what a SuperApp is meant to be. And, just like the mall doesnt own all the stores in it, so too the SuperApp simply facilitates engagement with various services.

South Africas first SuperApp

You might be surprised it already came and went.

Back in 2003, a small services company in Stellenbosch under Herman Heunis started playing around with an app for cheaper messaging than SMS. At the time, an SMS cost 75 cents for 160 characters. Mxit officially launched in 2005, offering messaging at a fraction of the cost.

Soon, Mxit was everywhere and people were spending an enormous amount of time on the app. So Mxit brought in other apps, games and third-party applications. Eventually a peripheral would catch your attention, just like in a shopping mall.

Now, Mxit went bust after selling to World of Avatar in 2011, just after WhatsApp launched (2009), and they soon learnt the magic of Mxit was never the side services, it was the initial promise of cheaper messaging.

Lesson learnt. But its worthwhile noting not even Meta has fully capitalised WhatsApp yet. But its Chinese Tencent equivalent has

WeChats Rise to SuperApp Status

When WeChat launched back in 2011, Chinese language keyboards werent well developed. So the app offered voice notes long before WhatsApp. And, just like Mxit, WeChat quickly captured a massive market share and, unlike Mxit, kept developing the apps core function, to keep it modern and fresh.

With a little help from the Chinese government in keeping out international competitors, WeChat soon became the app where most Chinese people spent their time on their phones. Now the peripheral services started, essentially creating a one-stop app for everything you want to do in China.

And we mean everything

So its WhatsApp, Facebook, Google, Insta, TikTok and your bank all in one

But WeChat failed in SA?

WeChat threw everything at making it work in SA. We had SnapScan integration, and they gave away thousands of rands to users to start using it. But when the free money dried up, so did the active users. The same problem Mxit had, if the users arent spending time there already, they arent going to use the peripheral services.

The Open Letter Guide to Building a SuperApp

Step 1: Find something that is super sticky, I mean really sticky. As in 10 times cheaper or better than the current alternative sticky. And grow a user base.

Step 2: Introduce payments that work seamlessly for your user base.

Step 3: Make it super easy for third parties to integrate and sell services to your user base.

Step 4: Make sure step 1 stays relevant and sticky.

Now youre getting it.

Elon didnt buy Twitter to irritate the left. He bought it because it's sticky and has the potential to be even more so. And he realised the only way this user base will grow and continue to be relevant (step 1) is by making it more balanced.

It's working, user numbers are up every month. And payments and third-party are likely to follow.

Whats not clear to us is why someone hasnt called Zuck out of the Metaverse sooner to come and help Whatsapp dominate this battle. Theyve been making SuperApp moves, WhatsApp business generated $5 billion in revenue in 2020, but with a staff contingent of 55-odd, a CEO sidetracked by a failing passion project and Musk as an opponent, this might soon become a one-horse race.

This article originally featured on The Open Letter's weekly newsletter. To sign up visit theopenletter.io

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