The rise of Chinese ‘super applications’ that even Apple is beginning to copy

The rise of Chinese 'super applications' that even Apple is beginning to copy
Photo: Reuters.

Alipay or WeChat have become operating systems that nest programs that cover all the needs of users. Apple has already started copying them.

Imagine that WhatsApp not only served to communicate. Imagine that, without leaving the app, you could order a taxi, buy a plane ticket and products from Amazon, book a restaurant or order food at home, pay the electricity bills and pay taxes, make an appointment with the doctor and even invest the savings in funds. It seems like science fiction, but in China, it has been a reality for a long time: welcome to the era of super applications.

Alipay, Alibaba’s electronic payments service, opened the door. And now it’s a Swiss razor that serves to move through all the constellations of Chinese cyberspace. The original application was limited to generating QR codes to make payments in shops and vending machines, as well as to processing free transfers to other users. But, little by little, it was integrating other services of the e-commerce giant and then opened up to companies not linked to the group.

The latter have their own individual applications, but Alipay has integrated slightly reduced versions in its ‘superapp’, so it is not necessary to download anything to order a taxi with Didi, use a shared Hellobike bicycle, purchase products on Taobao, split payments with Huawei’s financial services, or even watching Youku videos. Without a doubt, an extra incentive to use them is that they do not require registering for each service, since the user’s data is shared directly, such as when one registers using the Facebook or Google account.

WeChat’s response

And when it seemed that Alipay would be hegemonic in China, in 2017 WeChat – the WhatsApp launched by the rival Tencent in 2011 – stood up with its mini-programs, reduced versions of the applications that work within the ‘superapp’. In the first year of existence, a million were designed that added 100 million users; Last year, these ‘software pills’ closed 1.1 billion transactions worth 100 billion euros, and their number is expected to exceed 3 million by 2020 and attract 1 billion users.

Any company can design one of them. There are multinationals like Carrefour, Starbucks or Zara, and even from gigantic e-commerce platforms like JD. Tesla has one for its users to find charging stations. But the bulk is made up of small businesses. “I pay an annual fee to use a template developed by a company, in the style of WordPress or Shopify, and I sell my products there,” says Hu Yuan, a young woman from Nanjing who trades in accessories and costume jewellery.

The operation is simple: your customers can search for the name of their store and enter the mini-program, which runs directly in the application. “It is linked to the brand’s official account, which they can also follow to be aware of news and have faster access. Inside they find all the products and can buy them without leaving WeChat,” Hu explains.

Zara or Starbucks are some of the multinationals that have joined

These super applications have revolutionized the Chinese Internet. “Mobile Apps take up a lot of space on any device. And device users may not want to download a brand or company App because it inhibits, for example, the number of photos they can store on the device. What’s more, irregular or occasional customers will be even less likely to download a storage hungry App from a brand or supplier – why have a rarely used App sitting on the device that impairs the performance of the rest of the device? So ‘mini-Apps’ – or programs – take up less space, are more convenient and also often faster than native Apps.” consultancy Melchers explains in a report.

Apple also likes the idea

survey conducted by Tencent last year concluded that 40% of Chinese Internet users believe that this model will end up replacing classic applications and that only 30% of those who use the nested services in WeChat are willing to download the individual application. “They are a wonderful solution,” says Germán Torrado, data specialist and head in China of the Genetsis E-commerce consultancy. “It makes it easy to find any service and users can satisfy 80% of their needs in the ‘super-app’,” he adds. In addition, Torrado believes that “they offer a higher degree of privacy and security than individual applications,

It seems evident that these ‘super apps’ mark the future of mobile services, but they have not penetrated the West. It is true that more and more social networks integrate services and sales channels —Torrado points out the WhatsApp Pay initiative—, but only Apple has copied the Chinese model in the latest version of iOS, which releases App Clips. It is not the same, but it is similar. The system allows, by scanning a QR code or using the NFC chip, to immediately access a limited version of the app – almost as a preview of it – to use a specific service without opening it. And they have an advantage over Alipay or WeChat: as App Clips are directly integrated into the operating system – and not in an application – it is not necessary to open the super application and search for the mini-program to use them. In times of the coronavirus, with an increasing number of businesses using virtual services based on QR codes – such as restaurant menus – this seems like a particularly practical initiative.

Torrado also has an impact on other elements that make it difficult to implement ‘superapps’ outside China. “The fact that countries are much smaller and governed by different regulations makes it difficult for countries to thrive. And then there’s also the user’s own profile. Chinese is always willing to try new things and has a blind faith that the government protects its interests, while the Westerner is more reluctant to give its data and always suspects,” he explains.

Luis Galán, founder of e-commerce consultancy 2Open in China, also does not believe that ‘superapps’ will go to be followed in the West. And it points to social and cultural aspects as the main stumbling blocks for it. “For example, in the West, we always have the ‘garage myth’ at the highest level: anyone with an idea, talent and winning can create a disruptive product quickly and effectively. In this regard, there are meetings of programmers, ‘hackathons’ and other events that aim to define and launch in hours a viable minimum product. When you have this ‘bottom-up’ culture tucked into the DNA of society itself, it’s what you promote: launching independent, autonomous projects, with an independent profit and loss account, which leads to the disintegration of functionalities in different companies and projects.”

The danger of the ‘superapps’

In China, Galan points out, a ‘top-down’ culture prevails that facilitates the acceptance of macro-enterprises that eat it all “as if they were a comet or a private soviet.” And then there are the development of standards and application interoperability, as well as legal issues related to privacy. “In a Western regulatory environment, where the user is defined as the owner of their data, it will be more difficult to accumulate so much information and power in specific players. This also favours dispersion. In my opinion, we will not see these meta-applications, or at least not in the short term, and I believe it is good for the consumer and for freedom,” ads Galan.

Their main risk is that these platforms end up being closed ecosystems

Not surprisingly, a foreign engineer from Tencent, who prefers to remain anonymous, acknowledges that the Chinese giants accumulate much more power than their American counterparts and that this carries risks. “Super applications can end up becoming closed ecosystems that Internet giants use to wage war,” he says. And he points to WeChat itself, which blocks the applications of rival Alibaba and even prevents its users from opening links on the Taobao platform that reach them through chat. “Nor can they be published in the Moments section of social media. It’s almost like Google doesn’t allow you to open a Facebook link that reaches Gmail because they’re rival companies,” he says.

In addition, Alibaba and Tencent – which has just surpassed Facebook to become the highest-value social media company – lead the system’s drift towards an oligopoly that may end up being counterproductive for entrepreneurs and consumers. “But this is a global trend that we see in the operating systems themselves with the Windows / Mac duopoly. In any case, if they have so much power, it is because they have many users. And that means that they respond satisfactorily to a demand,” Torrado argues. “In Addition, in China, there is still enough space and dynamism for new giants like Pinduoduo to grow—E-commerce— or Bytedance —developer of TikTok”. In any case, it is evident that the ‘superapps’ increasingly distance the Chinese Internet from the Western one, although they also demonstrate the Chinese innovation capacity.