The Super App Strategy: Business Model & Examples

The world’s most valuable real estate is not located in New York or Singapore. In fact, it’s the home screen on the smartphone that you and I carry with us every day.

The average smartphone owner has over 80 apps installed on their device. And while not all of them are in constant usage, the ones that do capture our attention tend to become some of the world’s most valuable companies.

A special breed of app has since emerged in hopes of capturing even more eyeballs. Dubbed super apps, these platforms try to seize our attention by providing anything from food delivery to pet insurance. 

In this article, we will define what super apps are, how their business models are structured, what pros and cons they possess, as well as reveal the biggest super app platforms out there.

What Is a Super App?

A super app is a unified application that combines several distinct products and features into one single entity.

The term was initially coined by BlackBerry founder Mike Lazaridis in 2010. He defined it as “a closed ecosystem of many apps that people would use every day because forward they offer such a seamless, integrated, contextualised and efficient experience.”

You can think of it as the virtual equivalent of a large shopping mall that features all kinds of products and services, ranging from clothing to food.

As such, super apps can take shape in almost every category imaginable. We have covered the business models of over a dozen super apps on this site and have identified two distinct types:

  • Horizontal super apps: offering products in a multitude of categories 
  • Vertical super apps: focusing on one distinct category/industry

For example, a horizontal super app like China-based WeChat allows consumers to book anything from taxis to massage services in one single application.

Meanwhile, Revolut, a neobank out of London, offers a set of different products in one vertical (finance) including savings accounts, insurances, crypto or stock investing, the ability to get paid earlier, cashback rewards, and so much more.

China, in particular, became a fertile ground for super apps as the country’s leaders decided to ban Google, Facebook, and many other Big Tech companies from competing locally. Additional factors included the lack of data privacy laws, the availability of venture capital, and the obsession of its citizen with mobile phones.

The lagging access to computers and said mobile affinity has been the same reason why consumers across (Southeast) Asia have flocked to super apps as well. Western companies are increasingly adopting super app strategies of their own, too.

According to Statista, 67 percent of consumers in the United States expressed their interest to use a super app. And since they spend over 4 hours on their phone per day on average, it certainly appears that users would be enticed to try them out.

Money is certainly a big motivator as to why an increasing number of companies adopt a super app strategy. But how do those platforms actually generate income?  

The Business Model of Super Apps

WeChat, China’s supper app powerhouse, allegedly recorded $17.49 billion in annual revenue during the fiscal year 2021. Transactions worth $400+ billion were facilitated on the platform throughout that year.

Many other super app examples, which we’ll detail further below, have also become multi-billion-dollar money printers. It’s safe to say that the business and economic model of super apps is enticing at the very least.

Super apps possess many of the same dynamics that are akin to online marketplaces. They often match consumers (= demand) with people offering a service (= supply) such as grocery delivery.

Those services are then monetized by imposing a percentage-based commission. For instance, if you book a ride, then the driver is charged a portion of his earnings. Similarly, food delivery platforms make money by receiving commissions from restaurants.

Financial super apps have adopted a similar business model whenever they recommend a product such as insurances. They also drive revenue through various fees, for instance from crypto and stock trading as well as interchange fees from debit cards.

Advertising is another significant revenue source. Brands can promote their products and services and normally pay for every click that they generate through the ad. Impression-based compensation is sometimes utilized as well.

The key is therefore to motivate users to return to the app as often as possible. The more they transact with it, the higher the chance of deriving revenue from those interactions. Multi-use functionalities minimize the cognitive dissonance, which is prevalent when users have to constantly switch between apps.

It also makes it easier for the super app to introduce new services and drive instant demand to those. All it takes is to promote a new service through hacks like push notifications, in-app banners, trial discounts, and so forth.

In some instances, like WeChat, super app operators utilize social features to keep users engaged and create habits around daily logins. And those use cases can then be monetized as well, for example by allowing users to purchase stickers and similar digital items.

Advantages of the Super App Model

As previously eluded to, one of the key advantages of super apps is their ability to cross-sell users into other services. All it often takes is to send push or other types of notifications to raise awareness.

Being able to cross-sell users into newly launched services also significantly diminishes the marketing cost that a company incurs. Meanwhile, the lifetime value of each user is enhanced since they transact through a variety of services.

The one-for-all approach is also beneficial to users as they do not have to add payment and other types of information to every new service they sign up for.

And the more those users transact on the platform, the more data is being collected, which in turn can be utilized to launch more accurate offerings. For example, the Indian FinTech app Paytm allows merchants to source loans. Those loans can be priced substantially more efficiently because Paytm has first-party data on how much money those businesses generate in the first place.

Similarly, social platforms like Instagram have made similar inroads in keeping users engaged on the app and monetizing the first-party data they generate. Data about purchases a user makes on Instagram is funneled back directly to advertisers on the platform, which allow them to target users more precisely. They are thus incentivized to spend more on the platform.

Additionally, super apps can oftentimes command a higher valuation since their totally addressable markets are substantially larger. This, in turn, enables them to raise more money. Super app Grab, for instance, managed to raise over $11 billion in venture funding before going public in late 2021.

Another reason why they are able to amass greater valuations is that those platforms can be monetized in a variety of ways (as described above). Most of the revenue comes from commissions for the various services that others provide. Additional income sources include advertising, subscriptions, in-app sales, and more.

And if a user is subscribed to the platform, he or she tends to be even more engaged to make up for the monthly fee they spend and take advantage of the benefits said subscription provides.

Lastly, super apps that compete in categories such as messaging, food delivery, and ride-hailing can amass network effects that make them harder to dethrone. Indonesian super app Gojek claims to have 900,000 merchant partners on its platform alone. It would take potential competitors years to catch up to that level (on top of having to spend billions of dollars) while Gojek itself continues to expand those networks.

Merchant relationships, in particular, are very sticky. Many super app platforms also provide merchants with tablet-based terminals to accept payments on their behalf. And since most merchants are likely only using one or two terminals, there simply isn’t much more ground to cover for new entrants.

Disadvantages of the Super App Model

The largest disadvantage to creating a thriving super app is the cost associated with building the business.

Many of them operate quasi-online marketplaces within each of the segments available on the app. For example, Latin American Rappi allows you to order restaurant food, everyday items, and groceries from other supermarkets and its own shops.

It, therefore, takes substantial amounts of money to attract enough riders for each of those services and then market them to consumers accordingly. In the case of Rappi, it also does rapid grocery delivery, which means it needs to invest in warehouses, picking technology, workers, and more.

Working on multiple businesses at the same time can also lead to a lack of focus and thus make each vertical more prone to disruption. The added complexity of running several businesses at the same time can also not be underestimated.

Another factor that cannot be overstated is that creating an enjoyable user experience in a sea of services is really hard. For instance, some users began to complain about Spotify’s ambitions in audio and the fact that the home screen was enriched by podcasts and other distracting features.

One way in which super apps solve the feature overload issue is by personalizing the experience. In this scenario, each user will be presented with an individual collection of features that are akin to his or her browsing behavior.

Western companies, in particular, will have to invest substantial resources into teaching users how to navigate feature-rich apps. Consumers in the United States, for example, use 46 different apps every month.

This likely means that companies with super app ambitions have to ease users into the experience. Instead of offering dozens of different services and products right away, it is advised to slowly expand the platform’s functionality over time.

The last potential disadvantage that may arise is the increased scrutiny that certain tech monopolies in the Western hemisphere attract. Future legislation may even render the operation of a super app impossible in some markets.  

Examples of Super Apps

As previously stated, super apps originated in Asia. Companies in China have been a key influence in particular.

However, Western technology firms have since begun to adopt similar strategies – although none of them are as sophisticated as their Asian counterparts.

Here are 10 examples of prominent super apps from Asia all the way to America.

WeChat

WeChat has become synonymous with the super app term. Initially launched as a communications platform by Chinese technology giant Tencent, it has since grown into an all-encompassing platform offering anything from digital payments to ride-hailing.

With over 1.28 billion monthly active users, over 90 percent of China’s citizens are now frequently using the app. Part of the reason why WeChat rose to prominence was the fact that services like WhatsApp have been prohibited from operating in China.

That doesn’t mean it doesn’t take advantage of the popularity of Western brands. In 2017, it launched ‘mini programs’ within its app, allowing other developers to create their own stores. Playing by WeChat’s rules is how platforms like Airbnb can continue to operate in China.

Its popularity has also highlighted the dark side of super apps. Users that are banned from the service are essentially cut out of society as almost all public services are connected to the app. Critics of the Chinese government are regularly silenced as well.

Those concerns haven’t stopped other platforms from copying WeChat’s super app model. Elon Musk allegedly even plans to turn Twitter into a super app called X that would entail payments, communication, commerce, and more.

Alipay

While WeChat is always touted as the world’s leading super app, it is Alipay that has been going at it the longest. Launched in 2004 as a subsidiary of Alibaba, Alipay began life as an escrow service that would enable the marketplace to safely collect payments.

Its super app ambitions became evident in 2008 when it introduced the ability for customers to pay electricity, water, and phone bills. Today, Alipay and WeChat combined account for 95 percent of all online payments made in China.

For instance, Alipay utilizes information from other social channels, the payments its users make, and more, to create one of the world’s most sophisticated credit-rating systems for merchants and consumers, allowing it to issue loans to them.

Alipay now even offers its own white-label solution that enables any firm to become a super app. It does so by allowing 3rd-party developers to build so-called Mini Programs on it. Alipay conveniently generates income on those 3rd-party transactions as well.  

Line

Line, much like WeChat, is a communications platform that allows its users to text, call, and video chat with each other. In fact, Line’s stated mission is “to bring people, information and services closer together” while becoming the “life infrastructure” for its users.

Its functionality has since been extended to food delivery, a thriving creator market where users can purchase stickers and other digital goods, NFTs, games, free P2P payments, medical appointments, music streaming, and so much more.

Interestingly, Line has not adopted a singular app approach. Instead, many of its products and services, such as live streaming or ticket purchases, are also offered via individual apps. This only applies to the most popular products, though.

Grab

Grab started out as a ride-hailing platform, which remains core to its business across the 8 countries in Southeast Asia it operates in. Interestingly, Grab eventually acquired Uber’s Southeast Asia business, granting the latter an ownership stake of 27.5 percent.

Ever since, the company has expanded into all kinds of categories including food and grocery delivery, payments, sending packages, insurance comparison, and more. Its mobile app is even dubbed the Grab Superapp.

Its super app strategy has certainly translated to big revenue figures as well. In 2021, it generated $675 million in revenue. However, with losses of $3.6 billion, it highlighted just how expensive it is to create a super app.

  • You can find our case study on Grab here.

Gojek

Gojek is another Southeast Asian super app that began life as a ride-hailing platform. Initially launched in Indonesia, it now offers various payment products, food and grocery delivery, the option to rent cars or send packages, and even allows users to stream movies.

The firm’s super app ambitions were propelled to another level after it merged with marketplace giant Tokopedia to form the GoTo Group.

Interestingly, those ambitions also stretch beyond its own platform. In July 2021, GoTo sold its Thailand business to low-cost airline AirAsia in exchange for a 4.75 percent stake in its super app business division.

Paytm

Paytm adopted a common strategy among other super apps, namely expanding from one single use case, mobile prepaid recharging, to be exact, to all kinds of services including loans, free P2P payments, and so forth.

In fact, over 11 percent of all Indians have used the app to some extent. The country, where many citizens have a hard time getting access to a banking account, certainly proved to be a fertile breeding ground.

Today Paytm covers all kinds of financial needs both individuals and businesses might have. Individuals can pay for rent and utility bills, book movie and event tickets, assess their bank account balance and make transfers, check credit scores, pay online and offline stores, and more.

Simultaneously, Paytm caters to businesses as well, enabling them to accept payments for their goods and services, apply for loans, and so forth. As a result, close to 80 million people use at least one of Paytm’s services every month.

Shopee

Shopee is the Southeast Asian equivalent of eBay. Its core marketplace product connects sellers with tens of millions of buyers who want to shop for all kinds of items.

At first, Shopee’s features were simply an extension of its marketplace product. In 2019, Shopee introduced a payment product that allowed users to pay merchants (either online or within the store).

Not only has Shopee extended its payment product by introducing cashback rewards but has since expanded into categories such as grocery and food delivery. Those delivery businesses are still being ramped across various markets as we speak.

  • You can find our case study on Shopee here.

Revolut

Revolut is a digital bank that enables its users to open accounts without the visit of a branch. Much like Paytm, its goal is to cover all potential aspects of the financial lives of its users – whether that’s individuals or businesses.

The platform now offers dozens and dozens of different products such as stock trading, gifting, travel and pet insurance, budgeting and analytics, premium memberships, POS hardware, payroll services, allowing businesses to accept crypto, and so much more. 

Revolut, with over 20 million retail customers and availability in 25+ countries, remains the most promising and ambitious super app project coming out of the European continent.

  • Our business model case study on Revolut can be found here.

The Cash App

The Cash App, developed and maintained by Block Inc. (formerly known as Square), is a financial super app out of the United States.

What started out as a service that allowed people to transfer money between each other at no cost has sprawled into a thriving ecosystem of associated products.

Today, Cash App users can purchase and sell bitcoin as well as stocks, apply for a debit card, receive salary payments up to 2 days faster, and file tax returns.

Block continues to invest heavily in launching new products, which it sometimes does in the form of acquisitions. Its free tax filing product was introduced after it purchased Credit Karma’s tax filing software (which it had to give up due to being acquired by Intuit, which owns TurboTax).

In August 2021, Block also acquired BNPL provider Afterpay for a whopping $29 billion. It currently works on integrating those services into the cash app as well – with many more to come in the future.

  • Read our case study on The Cash App and its super app strategy here.

Uber

Now, you might be surprised to see Uber on this list. After all, the company still operates two distinct apps, namely for ride-hailing (Uber Ride) and delivery (Uber Eats).

However, Uber has since revised its strategy and is actively pushing towards becoming a super app. In November 2021, it introduced a subscription called One.

The subscription program, apart from providing customers with various discounts, enables them to earn points. Said points can then be redeemed across its different services.

For example, if you order food through Uber Eats and thus collect points, you can use those very same points to get a discount on your next ride.

But the firm’s super ambitions didn’t stop there. Six months later, in April 2022, it introduced trains, buses, planes, and car rentals to its U.K. app.

The trial phase, once deemed successful, would then be extended across all of its 70+ markets across the globe.

Uber’s goal is to become the world’s biggest travel super app on which users can fulfill all their travel needs.

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.