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Great apps are coming, and they’ll never let you go

Suppose you want to see Japanese Breakfast play Sacramento next week with a few friends. The checkout process requires jumping between at least a few apps – you can coordinate plans on WhatsApp, buy your tickets from Ticketmaster, book a ride through Uber, and refund yourself for drinks on Venmo.

But what if all this activity takes place in one app on your phone?

Over the next few years, I predict that the world’s biggest social media companies will become super apps, acting as gatekeepers for a wider range of things people do online. While they started out as a way to primarily stay in touch with friends and family or for entertainment, these social networks – Facebook, Snap, and TikTok, for example – will become increasingly important ways for people to do their shopping, banking and entertainment. Some of those companies that started in the US, like Snapchat, are already starting to look like awesome apps, even though they’re still mostly seen as social media.

The idea for the super app first gained popularity in China with WeChat, the messaging app that basically serves as a platform to make life easier online in the world’s most populous country. WeChat doesn’t just let you send messages to your friends and see their updates in a feed; it can also be used to take out a loan to buy your next car. Trade done through mini-apps that WeChat allows other developers to build on its platform reached $ 240 billion last year alone, more than double the previous year.

In the Western world, social media companies are catching up. They’re transforming from single-use or dual-use apps – messaging friends or browsing content streams – to increasingly encompass what people do online. Last year, Facebook started adding shopping features that prevent users from having to make purchases elsewhere. The Instagram manager, who is part of the Facebook family of apps, recently made headlines when he said the app was no longer primarily about sharing photos.

WhatsApp, which is also part of Facebook, recently added a directory in South America for users to find local businesses, and in India, it is testing banking products like loans. Twitter started out as a text-based SMS service, but now it allows users to natively host audio rooms and newsletters and place their tweets behind a paywall. TikTok recently added an in-app shopping experience and introduced a platform for developers to create their own app experiences in its main video stream.

Of all the big non-Chinese social media companies, Snapchat is perhaps the most advanced in becoming a great app. A few years ago, he introduced mini-apps from other developers that allow people to do things like play games together, mediate, or book movie tickets, all without leaving the app. . There are now more than two dozen mini-apps in Snapchat, although the company has yet to disclose their overall use.

In a crowded app landscape, becoming a super app is all about integrating more into people’s lives and keeping their attention, whether it’s an endless stream of short videos or a medium easy to find clothes to buy.

“Any business that has an app, you’re really focused on being a homescreen app,” said Nicole Quinn, investor at Lightspeed Venture Partners who supported the Calm and Cameo mental health app. , an app that lets you book celebrity screams.

A tectonic shift in how the ad-supported app economy works is also driving the rise of super apps. Social media companies that have largely thrived on tracking users across different sites can no longer be sure that their ads will lead someone to buy something elsewhere. This data sharing has historically made it possible for apps to easily track users as they roam the internet, giving advertisers a strong signal about the types of ads specific people will respond to.

Apple recently made it harder for third-party iOS apps to share data with other companies for advertising purposes, with a new prompt that is now displayed to users. Google is considering a similar approach for Android and has already announced the end of third-party cookies in its Chrome browser. Regulators around the world, especially in the European Union, are also considering laws that would further restrict the sharing of user data between different companies.

Simply put, if ad platforms like Facebook can’t keep up with how people interact with other apps, they will work harder to keep people in their apps as much as possible, especially for money-related activities. like shopping. Eric Seufert, an influential analyst and consultant in the advertising industry, calls this phenomenon the rise of “content strongholds”.

Since these changes made by Apple and regulators don’t largely limit how apps collect data about their own users, that first-party data is now more valuable. If a Facebook user makes a purchase without leaving and completing it in another app or website, Facebook can provide this information to the advertiser who paid for the ad that led to the purchase. Advertisers, in turn, pay more money when they know their ads are working.

WeChat, on the other hand, has been decidedly slow to build an advertising business, opting instead for some of the transactions made through its app and native payment service. Its parent company Tencent derives most of its money from other areas, such as its many gaming divisions.

Pressure on Apple – which controls the most lucrative and second-largest mobile app platform – is also contributing to this super app trend – to loosen its grip on what apps are allowed to do on devices. iOS. Apple’s rules currently prohibit third-party developers from hosting app stores in their apps, and they are, for the most part, not allowed to accept purchases in their apps without paying Apple 30%. Thanks to legal pressure, this is starting to change. And if Apple’s rule that bans app stores in third-party iOS apps is rescinded, social networks like Facebook could be released to host app stores on their own, making it easier for people to discover mini. -applications or web games in their applications.

The biggest risk for companies with super apps – or who aspire to become a super app – is scrutiny of the power of the tech industry. Regulators in the United States and Europe are increasingly critical of the largest internet platforms. Even China has, in recent weeks, started forcing WeChat and other local businesses to open up their platforms to competitors. It’s a sign that the country where super apps first rose to prominence now sees them as having too much power.

For now, the biggest super apps are still in China, and they’re way ahead in terms of developer activity. There are around three million mini apps in WeChat and around 1 million in Alipay, the second most popular super app in China. Users in China and other non-Western countries have flocked to super apps in recent years, but it remains to be seen whether the concept will take hold on people elsewhere who are already used to downloading lots of apps for any purpose. different.

The main contenders for super apps are apps that integrate payments, according to Kaniyet Rayev, CEO of a new startup called Appboxo that is building tools to allow businesses to easily build mini-app platforms in their apps. He started the business after taking a trip to China several years ago with his co-founder Nursultan Keneshbekov, where they observed how much time locals spent using WeChat. Appboxo is now working with companies in Southwest Asia, India, Japan and other parts of the world to help them build development platforms in their applications, Rayev said.

“We are betting on the whole ecosystem becoming big.”

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