Inside the rise of the super appJune 8, 2022 | By Marilyne Chew
As digital commerce has become a mainstay in the retail customer journey, brands and merchants have tried it all — learning to sell directly through their websites, via marketplaces and, of course, through apps. After all, mobile has continued to dominate consumers’ time in the digital world.
Apps offer brands and merchants a single platform on which to market their products and services and to complete the customer journey through payment and fulfillment. Once they achieve the preferred customer experience, they can expand across multiple use cases to solve a variety of consumer needs via their mobile devices.
A one-stop portal for numerous consumer journeys may seem like a tall order in an ecosystem of more than two million apps (more if you’re using Android). Yet we are seeing apps progressively expand beyond their core offerings to offer complementary services as they seek continuous engagement with their customer base.
Super apps or marketplaces?
There has been debate over the super-app model and whether this is the best way for apps and brands to grow. Some super apps, like WeChat and Grab, launched with a single service before extending their fulfillment capabilities and bringing in third-party providers. Other apps, like Tencent, Alibaba, and Amazon, began as marketplaces matching buyers and sellers before venturing into new categories or services.
Major brands have also made efforts to go direct to consumer. While some brands use their super apps and marketplaces to reach customers, others have invested in improving their websites, launching apps or creating “official online stores,” even within other e-marketplaces.
In emerging markets, where we find low market maturity and few established players in any category, early movers have been more adept at leveraging technology and pushing hyper-localized offerings than many e-marketplaces in more developed markets. Whether apps expand through their dominance of a particular category or via a marketplace platform, they usually share a need to operate and function smoothly as a mobile-first, all-in-one offering. The market research company eMarketer reported that smartphone users in the U.S. spent four hours on the internet per day in 2020, with 88% on apps, not browsers.
This focus on time spent in-app is crucial for super apps as brands seek to extend their engagement with consumers, regardless of whether it adopted the strategy of a single provider fulfilling all categories or as a tech-enabled marketplace convening various sellers.
The social media phenomenon
Consumers’ attachment to social media channels also contributed to the focus on apps. While adoption and comfort with social media have been rising across ages and segments, we witnessed a noticeable uptick during the pandemic. This usage led to an increase in social media’s influence on digital commerce.
Industry definitions tend to place social commerce within the larger e-commerce umbrella — even though some social commerce transactions take place offline. Most agree that a given transaction is tagged as social commerce if social media tools were utilized via one or more interaction points during the journey. As social media platforms increasingly focus on the monetization of their audiences, there is a clear runway for brands to engage with shoppers in meaningful new ways.
Incorporating social media throughout commerce
Social commerce is often catalyzed by online relationships, whether with friends, family, influencers or business. Social media can strongly influence purchasing decisions, because the interaction is more personal and can be tailored and individualized. It is no wonder that a recent poll showed more than 70% of businesses surveyed rely on social media for engagements.
Another aspect of social commerce driving the super-app trend is the circular nature of the buyer’s journey — a good purchase experience typically builds trust and encourages return business. With increased reliance on the overall customer experience, apps can expand their relevance across multiple customer journeys that target consumers — from transport and travel to shopping and groceries.
The app revolution
Consider super apps the modern-day equivalent of the ancient bazaar. These self-contained platforms provide multiple services, including payment and financial transaction processing. With the growing adoption of open banking and the technologies that enabled its application, super apps are now exploring how they can better embed financing options into non-traditional channels to complete the journey.Read more in the latest edition of Mastercard Signals