Could it be that Elon Musk is already bored with his “public forum”? Almost two months after buying Twitter, now the businessman seems to point his irreverent gaze at the entire world. Musk wants to develop a super app. Whether he ends up calling it “Twitter 2.0″ or “The All-in-One App” or “X”, his plans are still in the super nebula. And the series of slides he tweeted on November 26 contained almost no information and shed no light on his plans. His vague references to Tencent’s WeChat might provide some clues: Earlier this year, Musk described the Chinese superapp as “Twitter + PayPal + a bunch of other stuff, and all packed into one great interface.” What is clear is that Musk will face obstacles in his path.
An eventual Twitter superapp would add to a growing list of apps with aspirations of omnipotence. Launched in 2011, WeChat fueled the mass adoption of smartphones in China, and today it can boast 1.3 billion users and an astonishing ubiquity in Chinese everyday life. The addition of a payment platform, e-commerce, and games over a messaging service made it an amazingly popular application. In 2017, with the launch of “mini programs”—millions of third-party apps that exist within WeChat itself—they cemented their position as China’s true Internet operating system. And in the rest of the emerging economies there are also attempts to build a superapp. In Southeast Asia, Grab competes with GoTo, formed by a partnership between transport network giant Gojek and online shopping site Tokopedia. Both companies have lost more than half their market value this year, but the concept that brought them together continues to prove resilient, to the point that India’s richest man, Gautam Adani, recently said he also plans to join the race.
The idea is not new. The ambition to develop a super application has been a common element in all the presentations of North American companies for many years. Even Walmart announced plans to develop its own. Most of those plans involve packing as many closely related services as possible into one app. PayPal and Uber have made attempts to build industry-leading apps, rather than WeChat equivalents. Those limits have not always been self-imposed: it was investors who resisted pushing that line much further. Last year, when details of PayPal’s talks to make the leap to e-commerce via its $45 billion purchase of Pinterest leaked, shares of the company plummeted and the issue was quickly dismissed. And in today’s business climate, any such attempt would be even less palatable to shareholders. Having taken Twitter private, Musk will have no shareholders trying to clip his wings, but he will face even more crucial challenges if he really wants to go down the super-app path.
The biggest impediment superapps have is, to no surprise, the app stores. Apple, which makes more than half of the cell phones in the United States, is the official gatekeeper of what Americans see or don’t see. Apple guards its position very closely, and for excellent reason. The company does not disclose actual revenue figures from its app store, but it is estimated to represent a significant portion of its services segment, which bills $78 billion a year. That infrastructure, including the remarkable success of its Apple Pay payments platform, launched in 2014, is as close to a true superapp as there is in the United States.
Musk has already hit that ceiling more than once. In November, he used a dispute over Apple’s ads on his site to complain about the fees Apple charges apps that do business in its ecosystem, “a 30% secret tax,” in Musk’s own words. . He’s not the first mogul to complain about the cut, but the fee will mean a nasty squeeze on the profit margins of Twitter’s new subscription-based business model. After meeting with Apple boss Tim Cook at the company’s headquarters in Cupertino, Musk emerged calmer. But if Musk goes ahead with his plans, that skirmish will most likely not be the last: Any attempt to expand Twitter to incorporate a payment system or create a platform for “mini-programs” to run within the app would spark a war. more background. And it’s a battle Musk would likely lose. To be able to start giving orders to regulators, Twitter would have to be even bigger. By contrast, he finds it hard to imagine WeChat users abandoning the app if it’s removed from Apple iPhones in China.
The ones in the best position to become super apps and to take on Apple are the biggest platforms. According to the news portal The Information, Microsoft has considered creating its own super app, a platform that would combine shopping, messaging and web search, and that would reach consumers’ wallets as business customers reduce their advertising spend. . Perhaps Meta can also rise to the challenge, even though its investors are currently demanding that the company put a stop to its ambitious Metaverse, whose logic was presumably to be able to bypass the Apple ecosystem. Facebook’s parent company has begun integrating the company’s social media properties, and messaging service WhatsApp is adding payment services in India and Brazil. Equity consolidation is likely to be a quicker path to super-app success than the organic approach Musk would have to take given his company’s crippling debt load.
have faith in me
Another obstacle is trust. The concentration implicit in the super-app model requires the trust of regulators, consumers, and developers who choose to operate their businesses within one platform. Regulators might celebrate Musk’s irreverent approach to Big Tech and the creation of another great platform, but earning consumer trust will be more difficult for him. Of all the potential cornerstones of a digitized future life, Musk’s Twitter doesn’t offer a very compelling prospect: It’s not as big as Meta and not as serious as Microsoft.
And convincing companies to partner with Twitter or participate in whatever “mini-show” platforms Musk can create could be even more difficult. So far, Musk’s landing on the birdie network has been accompanied by a lot of drama and erratic politics, which for several weeks has even scared off big advertisers. If Musk wants to transition from rule breaker to rule maker, he will need to not only resolve the business challenges that stand in the way of his ambition to develop a super app, but also alter expectations of what he might do if He becomes the owner of one of them.