Why It's So Hard for Meta, PayPal and X to Build a Super App Like WeChat | WSJ

Summary

The video explores the concept of super apps, using China's WeChat as an example of an all-in-one platform for messaging, payments, shopping, and more. In contrast, the U.S. app landscape is fragmented, with different apps handling separate tasks. Attempts to create a super app in the U.S. have struggled due to regulatory challenges, user behavior, and privacy concerns. The future of super apps in the U.S. may focus on specific verticals, such as healthcare, rather than a single app dominating all digital services.

Takeaways

• 📱 The US relies on multiple apps for simple tasks, while in China, super apps like WeChat handle everything in one platform.
• 🧾 WeChat is a super app that combines social media, payments, shopping, healthcare, and more, making it a one-stop solution.
• 💡 Super apps allow users to seamlessly move between different services, making life easier by reducing the need to switch between apps.
• 📊 Companies are drawn to super apps because they can collect extensive data across multiple user activities in one place.
• 🇺🇸 Creating a super app in the US faces challenges due to the large number of existing apps and consumer habits.
• 🔗 Previous attempts by companies like Facebook to create super app functionalities were rejected due to app clutter and complexity.
• 💰 Integrating a payment system into a super app is critical for its success, but this is challenging due to regulations in the US.
• 🚨 Regulatory concerns about financial services, data privacy, and potential abuse have slowed down the development of super apps in the US.
• 🕵️‍♂️ There's public distrust towards big tech companies consolidating control over too many aspects of users' digital lives.
• 🏥 Experts suggest that the future of super apps in the US may be specialized by industry, like healthcare, rather than a single app for everything.

Q & A

What is a super app, and how is it different from regular apps?

A super app is a platform that integrates multiple services, such as messaging, payments, shopping, and healthcare, into one app. Unlike regular apps, which serve a single function or a few related functions, a super app allows users to move seamlessly between various tasks without needing to switch between different applications.

Why is WeChat considered a successful super app?

WeChat is considered successful because it integrates multiple services, including messaging, payments, shopping, and more, all in one platform. With 1.3 billion active users and revenue of about $81 billion by 2022, its ease of use and ability to gather data across its various functions makes it highly popular and profitable.

Why hasn't a super app emerged in the US?

A super app has not emerged in the US due to several factors, including competition from thousands of specialized apps, difficulties in changing consumer behavior, regulatory challenges, concerns about data privacy, and complications with integrating payment systems.

What challenges do US companies face when trying to create a super app?

US companies face challenges such as navigating consumer preferences for specialized apps, integrating a secure payment system, dealing with strict regulations around data privacy and financial services, and overcoming public distrust of big tech consolidating control over digital services.

How does WeChat benefit from collecting data across different functions?

WeChat benefits from collecting data across its many functions because it gives the company a comprehensive understanding of user behavior. This data can be used to improve services, target advertising, and provide valuable insights to businesses and governments, making it more than just a convenience for users.

What are some examples of failed attempts at creating a super app in the US?

Examples include Facebook Messenger's attempt to add features like games, which was later simplified due to user rejection, and Snap's Snapcash, a payment system that shut down after four years. Additionally, Facebook's attempt to integrate a cryptocurrency payment system faced regulatory hurdles and failed.

What role does payment integration play in the success of a super app?

Payment integration is critical to the success of a super app because it simplifies transactions, makes the app 'stickier,' and can help control transaction costs. A well-integrated payment system encourages users to stay within the app for financial transactions, which can also lead to scalability and higher profit margins.

Why are US consumers hesitant about super apps?

US consumers are hesitant about super apps due to concerns about privacy and distrust of big tech companies. Many people are uncomfortable with the idea of a single company managing multiple aspects of their digital lives, such as payments, health records, and personal data, fearing potential misuse or security breaches.

How might super apps develop in the US in the future?

Super apps in the US may evolve around specific verticals rather than trying to offer everything in one app. For instance, a healthcare super app could manage medical records, appointments, and payments in one place, catering to a specialized sector rather than trying to cover all aspects of digital life.

What are the regulatory challenges for creating a super app in the US?

Creating a super app in the US is complicated by regulatory challenges, especially around financial services. Laws around data privacy, payment systems, and concerns about illegal activities make it difficult for tech companies to fully integrate financial services into their platforms, as seen with the failure of Facebook's cryptocurrency initiative.