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Rise of super apps

MeElon Musk Tired of town squares yet? A month after he completed the acquisition of Twitter, his iconoclastic gaze seems to be all over the city. Musk wants to build a super app. Whether it’s called “Twitter 2.0,” “all apps,” or “X,” his plans are still very vague. A series of sparse slides tweeted on Nov. 26 did not reveal his plans. Tencent’s reference to his WeChat offers some clues. Earlier this year, Musk described China’s super app as “Twitter, and he’s PayPal, and a bunch of other stuff, but he’s really rolled into one with a great interface.” . What is clear is that there are obstacles in Mr. Musk’s path.

Twitter’s super app will add to the growing area. His WeChat, launched in 2011, rode the wave of smartphone adoption in China. Today, it boasts 1.3 billion users and incredible ubiquity. The addition of payment, e-commerce and gaming features to the messaging platform has made the app extremely popular. The launch in 2017 of WeChat-specific internal millions of third-party his applications, “mini-programs,” cemented the platform as the veritable operating system of the Chinese Internet. There is no shortage of building super apps in other developing countries. In Southeast Asia, GoTo and Grab, formed by partnerships with ride-hailing giant Gojek and his online marketplace Tokopedia, compete. Both have lost more than half of their market value this year, but the concept remains resilient. India’s richest man, Gautam Adani, also recently indicated plans to join the act.

This idea is not new. The super-app ambition has been a staple of American corporate executives’ conversations for years. Even Walmart advertised plans to develop it. In most cases, you should incorporate as many closely related services as possible within the same app. His PayPal, a payments giant, and his Uber, a ride-hailing and delivery company, have attempted to build champions in a narrower sector than their WeChat counterparts. These limits are not always voluntarily imposed. Investors are reluctant to try to push the boundaries even further. Last year, when details of PayPal’s talks to buy another marketplace, Pinterest, that would bring him $45 billion into e-commerce leaked, the company’s stock plummeted and talks were quickly halted. rice field. Such conglomerate building activities would be even less acceptable to today’s shareholders. Musk, who has taken Twitter private, won’t let public market investors cut his wings, but if he wants to seriously pursue a super-app strategy, he’ll have a more fundamental challenge. will face

The biggest obstacle to superapps is, of course, the app store. Apple, which makes more than half of America’s smartphones, is the country’s premier gatekeeper. It defends this position jealously and for good reason. The total amount of fees it collects from app stores has not been disclosed, but it is believed to be a large part of the services segment, which generates $78 billion in annual revenue. With remarkable success in the payment business since the launch of his Apple Pay in 2014, this infrastructure is the closest America has come to being a true super app.

Mr. Musk has already hit his head on this ceiling. In November, he used the controversy over his Apple ads on his site to slash the fees Apple collects from apps doing business in its own ecosystem — what he called a “secret complained about his 30% tax”). Musk isn’t the first mogul to complain about the skimming, but it’s going to especially weigh on the profit margins of Twitter’s new subscription-based model. After meeting with Apple boss Tim Cook at the company’s Cupertino headquarters, Musk calmly walked away. But the skirmish is unlikely to be the last one if Mr. Musk puts his plan into action. Attempts to expand Twitter to integrate payment systems or create a platform of “mini-programs” that run within the app will ignite more fundamental conflicts. But it’s a battle that Mr. Musk is likely to lose. Before Twitter can command rulemakers, it needs to be bigger. By contrast, it is unlikely that a WeChat user would abandon the app if it was removed from his iPhone in his Apple in China.

Bigger platforms can become super apps and stand up to Apple.according to information, news sites, Microsoft is considering building its own super app. It’s a platform that combines shopping, messaging, and his web search, and as business customers spend less, it’s going to eat more into consumers’ wallets. Even if investors call for a halt to his Metaverse ambitions, Meta may be able to rise to the challenge. The logic behind that was probably to bypass the Apple ecosystem in the first place. Facebook’s parent company has begun integrating its social media properties, while messaging his WhatsApp, his service, is rolling out payment services in India and Brazil. A sprawling real estate consolidation like this could be a quicker route to super app success than the organic approach Mr. Musk must take, given his company’s crippling debt burden. Highly sexual

trust me

Another obstacle is trust. The centralization inherent in the super-app model requires trust from regulators, consumers, and developers who choose to run their businesses within the platform. Regulators may welcome Musk’s iconoclastic approach to big tech and the creation of new large-scale platforms. It will be harder for consumers to win. Of all the possible cornerstones of a digital life, Musk’s Twitter isn’t a compelling prospect. It’s not as expansive as Meta, nor as solid as Microsoft.

Convincing companies to partner with Twitter or participate in a “mini-program” platform that Mr. Musk may create could be even more difficult. Musk’s acquisition of Twitter has so far resulted in plenty of drama and volatile policy decisions that have briefly spooked big advertisers. If Musk goes from rule-breaker to rule-maker, he will have to defy both the business challenges of super-app ambitions and the expectations of what he will do as an app boss.

Read the article by Schumpeter, a columnist on global business.
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https://www.economist.com/business/2022/12/08/the-rise-of-the-super-app Rise of super apps

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