Super App, the 'Poisoned Holy Grail' Everyone Wants [Tech Talk]

Super App Adding Payment, Shopping, etc. on SNS
Big Profits if Successful... Raises Monopoly Concerns
Musk Also Eyeing It Through 'X'

It has been over a year since Tesla founder Elon Musk acquired Twitter for $44 billion. During this time, CEO Musk has added multiple monetization options to the platform, changed its name to X, and plans to add fintech and dating application features.

In short, Musk's goal is to turn X into a "super app." A super app is a platform that integrates various functions within a single app, encompassing users' social and financial activities. Any entrepreneur owning an IT platform aspires to create a super app.

Why do internet entrepreneurs want super apps?

Elon Musk, CEO of Tesla, and the X logo [Image source=AP Yonhap News]

The representative company that has truly achieved a "super app" is China's WeChat. WeChat is a messenger app commonly used in China, with 9 out of 10 citizens communicating through it.

Initially just a simple messenger, WeChat evolved into a super app by adding financial, mobility, shopping, and SNS services. Now, Chinese users chat, book taxis, shop, and manage their accounts all within WeChat.

The advantage of a super app is very clear. Users within one platform can easily move to new services. From the consumer's perspective, since they already have an account on the same platform, the addition of new features presents no entry barriers.

WeChat is China's national messenger as well as a payment, video streaming, shopping, and fintech app.
[Image source=Yonhap News]

From a company's standpoint, it reduces the costs needed for initial scale-up (business expansion) and, most importantly, allows complete control over consumer data within a single company.

Tencent, which owns WeChat, has now become China's largest IT conglomerate, with a market capitalization exceeding 500 trillion won. This is an example of how a platform that achieves super app status can elevate a company.

However, the fatal drawback of WeChat is that it is a "Chinese company." It was developed for the very unique environment of China, which makes exporting it very difficult. In other words, there is an opportunity for other countries to benchmark WeChat and build their own super apps.

In fact, many developed countries with advanced IT industries have one or two businesses claiming to be super apps. Korea's representative super app is undoubtedly Kakao. In the United States, there is Meta.

In Europe, the UK fintech company Revolut harbors ambitions to become a super app. Although relatively unknown domestically, this company wields considerable influence in Europe. Starting as a mobile remittance service, it has steadily followed the super app path by adding features such as overseas travel booking and chat functions.

Big success if achieved, but risks are high... 'Poisoned chalice'

The fintech startup Revolut, established in the UK, is the only case that started with internet banking and grew into a super app.
[Image source=Reuters Yonhap News]

However, not all platforms succeed in becoming super apps. Moreover, maintaining the position of a super app is much more difficult. This is why super apps are regarded as a "poisoned chalice."

The biggest controversy is that super apps inherently raise antitrust concerns. This dilemma is especially pronounced in the West, where there is high sensitivity to anti-competitive issues.

In the past, Mark Zuckerberg's Meta launched an independent cryptocurrency project called Libra but had to withdraw due to opposition from governments and banks worldwide. Regulators likely found it unacceptable for Meta, already a giant SNS, to operate payment and remittance services without banks.

The super app transformation of mature platforms raises concerns about driving out startups and small businesses, as well as potential infringement on so-called "local markets," where low-income workers are mainly employed. Kakao, which began expanding through a super app strategy, has personally experienced these growing pains, and the challenges continue.

President Yoon Suk-yeol is listening to citizens' remarks at the 21st Emergency Economic and Livelihood Meeting held at a cafe in Mapo-gu, Seoul on the 1st. [Image source=Yonhap News]

On the 1st, President Yoon Suk-yeol emphasized regarding Kakao's mobility service that "the abuse of monopoly power is severe," responding to a taxi driver's request, and stated, "The government must regulate immoral behavior using predatory pricing."

Even in China, the super app paradise, maintaining the super app position is not easy. Jack Ma, founder of Alibaba, which has an ecosystem including e-commerce, fintech, and its own payment system, experienced the cancellation of Ant Group's IPO due to direct regulatory pressure from Chinese authorities.

Despite witnessing the antitrust issues and political conflicts faced by other companies, many still crave super apps because the rewards are enormous.

Especially for Musk, owning a super app has been one of his lifelong aspirations. He has praised WeChat multiple times in the past, and the dating and payment features he plans to add to X are similar to WeChat's growth model. However, whether his challenge will bear fruit remains uncertain.

This content was produced with the assistance of AI translation services.