‘Super app’ – The phenomenon of business is emerging across Asia: Make a person spend 20% of their monthly income to do everything essential from eating, vacation, playing through a single app

Michael Xu is feeling very excited. Shortly after visiting relatives in China in 2017. The Toronto game developer decided to take a half-earth flight once again to learn how to create games for the WeChat app.

“WeChat is huge in China,” Xu told Nikkei. The 28-year-old Canadian-Chinese businessman is impressed by the way his relatives use the same software to do everything from paying bills to chatting with friends and ordering food. “My 88-year-old grandfather also uses WeChat well. He uses it to call me and share good photos or articles.”

So when he came back to join the Chinese video game market last year, Xu’s first step was to take a WeChat programming course in Shanghai. “Everyone in China uses WeChat. It will be much easier for them to play our games on WeChat, instead of forcing users to download another application.”

WeChat is now a unit of Internet giant Tencent Holdings – accounting for more than 1.1 billion users, mostly in China. Imagine all US applications like WhatsApp, Apple Pay or Uber and Facebook combined with WeChat only. And their success inspired companies across Asia to build a ” super application “, making it a phenomenon across the continent.

Some outstanding super applications in Asia.

In exchange for such convenience, the cost is not small. Experts warn that the emergence of these applications will threaten competition and innovation.

Although no one has accurately calculated the number of super applications in Asia, they are emerging everywhere including the most remote areas.

Myanmar – a country that has only been accessing the internet since 2000, has appeared a Vietnamese application called Zalo – with a chat tool and it will soon be integrated with online shopping and payment functions. In India, giant Reliance announced earlier this year that it will launch the app with 100 services in it.

“Super apps become a way of doing business in Asia,” says Vishal Harnal – Partner at 500 Startups.

This phenomenon is triggered in developing economies as smartphones are becoming more and more prevalent. Millions of people in emerging Asian markets who have missed the era of personal computers now take the leap to smartphones and use their applications very fluently.

At the same time, the billion dollar application market has created tremendous competition. In China alone, there are more than 4 million applications and this number is growing even further. Super apps that attract users and keep them in there.

Amalia Ayuningtyas – a consultant in Jakarta is proving that these data are true. Initially she downloaded Go-Jek – an Indonesian app that was just for ride-hailing. She just wanted to make it easier for her to travel around the city during peak hours, but the 27-year-old girl eventually turned to other app functions after seeing countless attractive Go- Jek shows up.

Currently, Ayuningtyas is using the GoPay mobile wallet to pay car picks, order food on GoFood and send documents via GoSend. Occasionally, she would call a masseuse through GoMassage and find someone to move through GoClean. When the credit card expired, she switched to GoPulsa.

“I’m a Go-Jek addict,” Ayuningtyas – admitted. She further shared that she spent 20% of her monthly income to spend on this app.

Ajey Gore – Chief Technology Officer of GoJek said at a recent conference in Hong Kong that his company’s platform is currently handling 2.5 million user requests at any time thanks to the development. up to 21 services. “When you reach this range, you can do anything.”

Providing a variety of services on one platform will help reduce prices, making it difficult for competitors to stand firm in the game. Foodpanda, a large food delivery company based in Germany, had to close its operations in Indonesia in 2016 after Go-Jek and Grab expanded into the field.

Earlier this year, Singapore-based company Honestbee decided to stop food delivery. Honestbee seems to be trying to sell its operations to Grab or Go-Jek but the company declined to comment on the matter.

Investors are very interested in this issue. “Chinese venture capitalists often joke that having a simple application on the 4G platform is not worth your attention.”

“They will not be able to survive the competition with WeChat and Alipay,” the investors said. “The giants are in control of many areas and they are getting stronger and stronger.”

Consumers are sometimes forced to use super apps. In Hangzhou, the home town of Alipay – a variety of restaurants, coffee shops and supermarkets only offer online payment. Similarly, a few people who come to China to work are forced to add another type of card, WeChat.

With impressive statistics, 2 in 3 Chinese people use WeChat, the app is “extremely popular,” and it becomes “public gadget,” according to Matthew Brennan, manager at China Channel, a consulting firm. “WeChat is like a phone number, water, gas or electricity.”

Such popularity, but WeChat is constantly expanding. Tencent has given companies and developers attractive offers: They can build a small app on cheaper WeChat that is faster and more convenient.

“It usually takes a week to build an application if there is a full team. However with the mini programming program, only 1 or 2 people will make 1 application, in 1 day.” Additional functions such as payment and messaging also make the process easier.

Tencent founder Pony Ma said last year that more than 1 million mini applications have been created on WeChat since 2017. Alipay launched its own mini-app platform last year, attracting more than 100,000 apps. in the first months, about 850 days.

Jeffrey Towson, an investment professor at Peking University in Beijing, compared super applications as a valuable real estate block. “The question is whether super applications can kill competition as we see many other companies do,” said Jason Davis, a professor at the Insead business school.

Currently, developers and analysts say that Tencent and Alibaba still set quite open rules. Both allow anyone to be part of the mini-app ecosystem and charge a nominal fee. However, there are still hidden rules.

For example, online stores operated by WeChat cannot accept payments through Alipay and vice versa. In addition, mini application operating units often do not compete with the managing unit. Last year, Tencent made headlines when it stopped a series of short video apps including its major competitor, TikTok on WeChat.

Mobile economy in the Asia Pacific region in 2018.

In general, many people are concerned that super applications will not kill competitors in the traditional way businesses do. “I wish it were so simple,” said Hian Goh, co-founder of Openspace Ventures.

Goh feared that super-applications could make the market uncompetitive: “The ability to create competition is even more open in the digital era. I don’t support this idea because super-applications are dominating.” value, then innovation will be lost. ”

Despite this, despite what WeChat did with TikTok, in January, this video app surpassed Facebook and Instagram in terms of downloads. ByteDance – their parent company, which replaced WeWork, Airbnb and SpaceX to become the world’s most valuable startup, at US $ 75 billion.

Meanwhile, if Didi Chuxing used to rely on WeChat to attract customers, Didi currently receives 90% of the orders through their own applications.

“Users want direct access. Otherwise it is very risky.”

Xu, the game developer mentioned in the beginning of the article, is still planning to build mini games on WeChat. However, he had a plan B.

“We will also have game apps on the Apple Store, Google Play and many other platforms. WeChat is a great potential platform but we will not depend on it all.”