Beyond Features: The X-Factors of Wildly Successful Super Apps
I can only agree with Sangeet Choudary`s statement [1] that whenever people claim they want to become the next WeChat, this stems from an utter lack of understanding of the unique circumstances that made WeChat what it is today.
Having said that I confess that I have no idea how many of the wannabee SuperApp X employees are actually developers and focused on R&D. To my knowledge Tencent, the parent company of WeChat, has had over two-thirds of its employees in R&D. Maybe Elon Musk is actually hiring people in significant numbers from Alipay, Meituan, or WeChat to bring the cultural business mindset that made the Chinese Super Apps what they are.
An online seminar entitled “Can the All-in-One App be Replicated?” was hosted by the Technology and Management Centre for Development (TMCD) at the University of Oxford on December 2023. The Technology and Management Centre for Development (TMCD) is an interdisciplinary research center of the Oxford Department of International Development (ODID) at the University of Oxford.
TMCD Director, Xiaolan Fu, introduced the findings of their research based on facts and interviews. The core message I took away was this obsessive approach to researching customer needs. It felt to me like that Wechat researchers are like mad, obsessive scientists who keep asking questions to get to the bottom of the customer needs. As a result, product innovation has a high probability of becoming a sustainable part of the ecosystem.
At the same time, cooptetion between groups internally is a normal and fosters what I think of as `breakthrough` innovation on top of incremental innovation.
These are important business cultural ingredients and organizational structures that are invisible to most. Lots of business people, business journalists, and consultants think that the big success of these Super Apps came just from the lack of a mature financial services sector, the lack of strict financial and privacy regulation, and the ease of gathering loads of granular data. While these factors have contributed to this business model's success, they are less than half the recipe.
A significant part of the SuperApp success is the scaling and success of Mini-programs. The founder Pony Ma, came up with the concept which is a perfect union of the lightness of a website with the flexibility and complexity of the functionalities of an app. Kevin Shimota, the CMO of WeChat and author of the Book `The First Super App`, came up with the name `mini-programs` as his job was to differentiate it from websites and apps. This was extremely important for established businesses that already had websites and apps. Why would Nike launch a mini-program on the Wechat ecosystem? When I spoke to Kevin Shimota on Conversations & Insights he explained that the evolution of mini-programs (like all innovations) was not straightforward or evident. In the beginning, it was similar to launching a business page on Facebook which has very limited functionality (you can follow, like, share). It later evolved into today`s mini-programs as businesses started using them for specific outreach — e.g. Nike wants to sell a new shoe line — and developers added functionalities (order, buy, pay).
The success came as Wechat already had 800 to 900 million users spending about 80 minutes a day, which is two or three times the average of people using Facebook. Because of the existing high engagement on the platform, the innovative lightweight `business pages` coined `mini-programs` started being successful. Wechat attracted 1 million mini-program developers and shared 50/50 the revenues of mini-programs. This resembles more the way the ios and Android developer community functions but not focused on developing apps and without a central depository of mini-programs (like the App Store or the Google Play Store).
After established businesses found value in launching mini-programs, Wechat developed templated mini-programs for SMEs and even for mom-and-pop stores.
Wannabe SuperApps shouldn’t confuse the business model with closed platforms or platform-based ecosystems with lots of functionalities.
The SuperApp recipe is based on an interconnected business model involving and empowering three communities: Users, Businesses, Developers. The mini-programs are the flywheels that enable interactivity between these three communities. The scale and network effects of this design are remarkable and keep evolving.
Data as of Jan 2022:
- The number of Mini Program Developers has exceeded 3 million.
- The daily active users on WeChat Mini Programs reached 450 million according to WeChat official data in January 2022.
- WeChat Pay has over 10 million merchants and more than 1800 banks and Payment institutions.
In Conclusion
Adding features like Revolut does, is not going to create the engagement of the interconnected business model powered by mini-programs. Revolut mobile has over 600 features while most neobanks have 200 features. Embedding non-financial services, like travel booking, eSim cards for traveler subscribers, and online shopping, has very limited potential (if any) to involve millions of businesses and merchants, millions of developers that will compete and create an evolving and sustainable (in the sense of long term business growth) flywheel effect.
In the developed world, we only have marketplaces like Shopify with successful business models whose recipe includes two essential communities: Businesses and Developers. Users are also Businesses in this case.
Can Elon Musk design a business model with a breakthrough ingredient (not mini-programs) that is invisible and serves a deep user need for the three communities: Users, Businesses, and Developers?
I assume he has thought about launching it from scratch but decided that he needs the user base and engagement of a social media platform, much like Wechat leveraged its large user base before launching the experimental mini-programs in early 2017.
Wannabe SuperApps shouldn’t confuse the business model with closed platforms or platform-based ecosystems with lots of functionalities.
The SuperApp recipe is based on an interconnected business model involving and empowering three communities: Users, Businesses, and Developers. The mini-programs are the flywheels that enable interactivity between these three communities. The scale and network effects of this design are remarkable and keep evolving.
- The “secret sauce” goes far beyond just having many features or an existing user base.
- WeChat’s obsessive focus on understanding user needs drives sustainable innovation.
- Internal competition and autonomous teams enable breakthrough and incremental innovations.
- The mini-programs model powers an interconnected ecosystem of Users, Businesses, and Developers.
Fun fact: What does Pony Ma (whose actual name is Ma Huateng), Elon Musk, and Mark Zuckerberg, have in common beyond being wealthy entrepreneurs?
They were all born in 1971.
[1] Elon Musk’s improbable path to making X an “everything app”
X must do more than tack on new features if it wants WeChat’s success.
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