SuperApps: why they’re hot, when they’re cool— and when they’re not. (1/2)
Much has been written in recent months about SuperApps. These types of mobile applications seem to be the ‘hot talk in town’, as many organizations are tempted and triggered to see how they can build these ‘closed digital ecosystem’, in which users can do multiple things, rather than just focus on one particular task.
“A SuperApp is a closed ecosystem of many apps that people would use every day because they offer such a seamless, integrated, contextualized and efficient experience.”
(Quote from: Mike Lazaridis, founder of Research in Motion (RIM) and SuperApp ‘inventor’)
This article will not explain what a SuperApp is (for that, I’d like to refer to: ‘Let me Google that for you’). Instead, I’ll be talking a bit about why companies should, or should not, choose to build a SuperApp.
I think it’s important highlight the both sides of the isle, as there is an inherent danger in wanting something just because it’s a trend. Recently, I have seen companies flirting with the idea of launching their own SuperApp, but not always for good reasons and in fact running the danger of a SuperApp potentially being detrimental to overall brand positioning and brand value.
And we’ve seen it over and over: companies jumping on new technologies, just because they can: when Blockchain came along, or when NFTs were the talk of the day, or when the Metaverse was going to revolutionize our world. However, more often than not, companies are better off not jumping on those technologies and trends, rather than wanting to implement something they hardly understand. And the same goes for SuperApps.
“… companies are better off not jumping on those technologies and trends, rather than wanting to implement something they hardly understand”
There is one important difference with aforementioned trends and SuperApps: blockchain, the Metaverse and even AR/VR can be executed as pilots and Proof of Concepts at the edges of the organizations, whereas SuperApps almost by definition hit your core business: their value lies exactly in combining multiple key offerings into one. So, tread lightly! As long as you’ve worked to build up a strong brand, just as quickly can you damage it.
Why are SuperApps a trend?
SuperApps are hot and happening. This is caused by the success of the lucky few that we can identify in this area: WeChat (China), Rappi (Mid and South America), Uber One (Global), Careem, AliPay and Grab (Middle East & Asia).
These companies have proven that you can build a (very) strong digital, closed ecosystem that enables two main things:
- Reduction of customer acquisition costs (CAC)
By Lowering the barrier of entry for your clients to try and enjoy other services you offer, as people can easily switch to other services inside your app, without them needing to download anything. - Increase of Total Customer Value (TCV).
By having your customers try and enjoy those other services, you generate more revenue across a wider company portfolio (e.g.: ride share, food orders and grocery deliveries).
This is the overarching and main reason why companies want to be build SuperApps: to create a true lock-in for customers by offering a solution that doesn’t require them to leave the app — because everything they want, is already there.
The best examples of this are WeChat, AliPay, Grab and Rappi. Their gigantic successes have triggered companies around the world to explore the possibilities of creating their own SuperApp, hoping to achieve a similar level of success and finally get users to STAY in their apps. As you all know, we live in an attention economy and so every additional second someone can spend inside your app, counts.
To SuperApp, or not to SuperApp
I get the temptation and curiosity to desire and develop a SuperApp. However, creating a SuperApp is not always a good idea. It really depends on your brand, goals and product offering. So let’s look at specific, concrete reasons why — or why not — a SuperApp is a good idea.
In what cases is a SuperApp a good idea?
In general, I believe there are 4 reasons why. Let’s list them and give a clarifying example per argument:
When you want to extend your ‘main’ customer journey with adjacent, value adding services
This is the most practical and easy to understand reason to make a SuperApp. Uber is the best example: for years, they focused on ride sharing only, but with the introduction of UberEats, they instantly extended their customer journey from ‘getting a ride home’, to: ‘getting a ride home and enjoying a meal after arrival’.
Later, with the acquisition of Cornershop (among others), they extended the journey even more by also letting you order groceries. Typical examples of extending your customer journey in logical and sensible ways.
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When you want to offer multiple, substitute services in the same category
Another strong reason to create a SuperApp is when you have multiple services in the same category. For example, let’s say you have a company that organizes events. You currently have stand-alone 3 event apps: a Sports app, a Music app and a Game Event app, each with their own events and service offering.
These services are substitutes for one another: on a Saturday evening, you might want to view a sports match, a musical concert or do some laser gaming with your family. As such, they serve the same user goals, intent and tasks and fall in the same category (e.g.: ‘entertainment’). This lends itself well to be packaged in a SuperApp. The mental concept of ‘entertainment’ binds the these services together and create a strong association for your users.
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When you want to rebrand your existing product portfolio into one, overarching product offering
Companies with many separated product offerings under one or multiple brands, might want to develop a SuperApp that integrates these separate products under one shared brand. This might strengthen overall market position and perception.
For example, Virgin offers Atlantic, Balloon flights, Galactic travel and many other things, but all in separate places. Although Virgin does have a strong overall brand, having one central place for (most of) Virgin’s content and services, will enable cross-selling in effective and simple way.
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When you want an integrated, cross-product loyalty program to be the focus of your experience
Uber actively pushes for their new ‘UberOne program’ quite a bit (at least here in Mexico they do). This monthly loyalty/subscription program provides you with discounts in Uber and UberEats.
For SaaS companies, ARR and MRR are very important metrics, and monthly, ongoing subscriptions like UberOne, contribute greatly in increasing these metrics.
As such, it makes sense to offer a SuperApp that puts loyalty front and center and lets users enjoy benefits for multiple services — all from one central place. This enables cross-brand usage, loyalty and gives Uber the tools to expand on its strategy in an easier way.
Note: other reasons to SuperApp
Of course there are more reasons to make a SuperApp, for example when you want to streamline and optimize operations. Centralizing your call and help center, logistics, inventory and optimizing supply chain might all be very valid reasons to consider one, cross-service platform. However, in this article I focus on CX and UX reasons, primarily.
In Part 2 of 2, we will have a look why SuperApps are NOT a good idea. Exciting stuff, let the drama begin…
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This is part 1 of 2 of this article. Part 2 of 2 will be published next week.
This article was written by Frank van de Ven, CXO at Umvel.com.
Get in touch with me on LinkedIn here.
