Mary Meeker understands the power of the super app.
Her highly anticipated 2019 Internet Trends Report is, as usual, a sprawling snapshot of the state of the commercial applications of the internet. This year’s report devotes a sizable section to the rise of China. She notes a number of trends, such as robust digital usage growth primarily driven by short-form video (something we blogged about recently in a post about short-form video app Douyin). But what really jumps out at me is her discussion about super apps.
Her report cites how local services are morphing into super apps that fuel usage at scale. Meituan, for example, is an on-demand delivery platform that services 412 million annual transacting users, growing at 26 percent year over year.
Alibaba’s Alipay has become a super app that supports payments for more than 1 billion users.
In addition, super apps are influencing apps such as Rappi and Uber, which are incorporating their features in order to service customers at scale.
Why Super Apps Matter
China is obviously a tempting market for global businesses because of its sheer size alone. But China can be an enormously difficult market to crack. As I discussed recently on our blog, even the mighty Amazon cannot figure out how to succeed in China. We believe that understanding super apps is a fundamental requirement for having any chance of succeeding in China. We have been blogging about super apps for some time, as in the post “The Rise of the Super App in China” from February 2018. Super apps not only service a huge number of customers – they also operate as powerful walled gardens. In China, consumers live on super apps such as WeChat and Alipay. Super apps act as all-in-one Swiss Army Knife managing a consumer’s needs in one place, ranging from communicating with friends to getting taxi service. And each app creates self-contained ecosystems to keep their customers living on their platforms.
Western brands need to tap into these super apps to provide meaningful experiences. But building experiences from one ecosystem to the next can be challenging. In addition, Western brands need to understand the mindset of the Chinese consumer as they live inside these apps. WeChat isn’t just for completing tasks, searching for products, and buying things with the brutal efficiency of an Amazon. No, WeChat is where consumers hang out, play games, interact with celebrities, and live their lives. WeChat is an experience.
The BAT Framework
The three companies dominating the super app landscape are Baidu, Alibaba, and Tencent (BAT). If you don’t figure out how to thrive in their ecosystems, you might as well not bother trying to do business in China. BAT operate as complex commerce and lifestyle ecosystems, and it’s not always easy for a business to navigate them. For example, Tencent owns WeChat, keeping users inside WeChat to find everything they need and shut out of Alibaba-owned Tmall.
To make sense of how to approach super apps, we suggest you view them through the lens of the BAT Framework, which helps you understand how each super app from the big three in China align with your people, processes, and platforms; It covers questions such as:
- People:in which ecosystems are my most enthusiastic customers?
- Process:what is the role each ecosystem plays in my customer’s journey?
- Platform:in which platform does my product have the greatest traction?
The BAT Framework will get you started organizing your approach for how you’ll work with super apps. You want to achieve successes as Oreo has. Last year, we blogged about how Oreo has been launching new products and building its brand in China through the power of BAT. For example, Oreo and Alipay worked together to launch an AR game to let users play with the cookies. As reported in Walk the Chat, users just need to take an Oreo cookie and scan it with Alipay’s AR tab. By using AR to catch falling Oreos in a cup of milk, users can win a coupon for in-store purchases. This is a great campaign to let customers interact with the product while providing coupons to incentivize in-store purchase.
For more insight into how to succeed in China, contact us. We have extensive experience helping businesses understand China. As part of global China-based Pactera, we have access to resources to help you succeed on the ground.