This is the full transcript for season 5, episode 3 of the Quartz Obsession podcast on superapps.
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Scott: Toward the end of the 2000s, it seemed like every commercial on American television was for Apple. There were iPod commercials set to catchy tunes. The ones with Justin Long and John Hodgman.
Justin Long in Apple ad: Hello, I’m a Mac.
John Hodgman in Apple ad: And I’m a PC. [sneezes three times]
Justin Long in Apple ad: Gesundheit. Are you OK?
John Hodgman in Apple ad: No. I’m not OK. I have that virus that’s going around.
Scott: And of course there was “There’s an app for that.”
Voiceover from Apple ad: What’s great about the iPhone is that if you want to check snow conditions on the mountain, there’s an app for that. If you want to check how many calories are in your lunch, there’s an app for that.
Scott: The app store was the selling point for the second generation iPhone.
Voiceover from Apple ad: You know when you don’t know what song is playing and it’s driving you crazy with the Shazam app…
Scott: There’s no denying that the original iPhone was beautiful and had some pretty useful built-in apps. But the introduction of the App Store seemed to answer the big question, “Why do I even need a smartphone?”
Voiceover from Apple ad: That’s the iPhone—solving life’s dilemmas, one app at a time.
Scott: And a few years later, smartphones came to China, and there was an app for that. Just one app. One app to rule them all.
WeChat, a superapp. In China, you can do almost anything on WeChat. You can work, message your friends, order food, scroll on social media, and pay your bills. So why isn’t there a superapp in the US, and why have so many efforts to build one here failed? What are these two parallel paths at the App Store and the superapp tell us about where we’re heading.
My name is Scott Nover and this is the Quartz Obsession in this episode: superapps.
So joining me here is Ananya. Ananya, please introduce yourself.
Ananya: Yeah, my name’s Ananya Bhattacharya. I’ve been with Quartz since 2016, and I mostly covered India Tech, and then now I do global breaking news, which is also a lot of tech.
Scott: No shortage of breaking news around the tech world. I know that well as a fellow tech reporter, and you are very good at staying on top of all of the news that is coming out of China tech scene, India tech scene, US tech scene, Europe, and today we’re going to kind of compare two different tech ecosystems in the US and China. And you are kind of in the middle in India.
Scott: So what is WeChat?
What do people use WeChat for?
Ananya: So WeChat is a superapp, which WeChat called itself, where basically you get a bunch of services that you would need sort of for your daily life and you would have everything in one place.
So whether it’s like you want to book a movie ticket, you want to book a flight, you want to book some dinner, you want to order food in or book a cab, all of that is kind of in one place, and you also pay for it through the app itself. So it’s just an ecosystem where you’re sort of locked in.
Scott: Walk me through one day in the life of a WeChat user in China.
Ananya: So I don’t even know if an average Chinese user would shut that app at all, because on your way to work, you’re probably chatting with somebody on it. You’re sending videos and gifs. You get to your office, you know, you’ll need to probably use it to scan into the workplace as well. Same thing happens at lunch, even if you’ve gone out, when it comes time to pay, you’d want to scan your WeChat QR code and pay instead of taking out your credit card. Same thing when you’re heading back home, you know, you want to watch videos on your way back, you want to watch content… that’s all in that app. So I think the unique thing about WeChat and, like, China is that we’re doing all the things that anybody with a smartphone does, but we’re doing it all in one place, probably without exiting it.
So that in-app use time is just through the roof.
Scott: Let’s say you’re a normal WeChat user, could you spend a day without it on your phone?
Ananya: I mean, you could, if you want to be cut off from a lot of things, I think. If you don’t want to talk to people or if you don’t want to pay for things easily, sure. But I wouldn’t recommend it.
Ananya: There are not many competitive apps. We don’t have bigger Western apps that would compete with a WeChat, so it automatically becomes the default option because you don’t have anywhere else to go. And then if you are also going to download, say, a food delivery app, you can just do all of that in one place.
So you could get the separate apps, but the system is just so convenient that everyone just kind of uses it. But if it’s, like, a Sunday and you’re just, like, strolling and not trying to get much done, then you could carry cash and you could kind of get by. If you’re local and you have a local SIM and you can make calls instead of texting and things, but it will get difficult over time, I think.
Scott: Over a week or a month, it might be harder to avoid this app, right?
Ananya: Yeah. Then you just have to befriend somebody who does everything for you.
Scott: Right, exactly. It’s all of the people I know—they’ll never have Venmo, but their husband or their wife does, and that’s how they get by.
Ananya: Yeah. It’s a communal app-sharing.
Scott: Exactly. What makes it super, why is it more than, I mean, Facebook does a lot of different things. Instagram does a lot of different things. Why is WeChat a superapp?
Why is WeChat a superapp?
Ananya: So I think there’s two main kind of components to it. One is that you have, like, apps within apps. So for instance, if I want to order Starbucks, I don’t need to go to a separate app and kind of order that. I can do it within WeChat because all these businesses partner with them. And the other thing is also, like, the ability to be able to pay without leaving that app.
Scott: So it’s the main mediator between a lot of businesses and the Chinese population. Is that right?
Ananya: Correct. It’s often the only one.
Scott: I think it’s hard for people outside of China to understand just how important WeChat is to basically everything in China, explain it to an American or someone that doesn’t understand how central WeChat is.
Ananya: You know, for small transactions there are merchants that won’t accept anything else, they won’t accept cards and things. And obviously cash is an option and it always has been, but nowadays you’ll hear of people kind of not having change and not being receptive to it. The other thing is that WeChat was kind of made off the back of QQ.
So Tencent, the parent company, used to have a social networking app called QQ, and they managed to kind of use that network effect and migrate everybody over by giving them free WeChat accounts when it first started out. And so immediately there were, like, billions of people joining the app. It has a Facebook kind of newsfeed situation that was curated by algorithms, but also it gave the state sort of power to disseminate their messaging. So just everything kind of worked in favor to keep everyone within the app.
Scott: How did the Chinese app ecosystem form this way?
China’s mobile app ecosystem
Ananya: So I think a lot of it has to do with the kind of devices that they have. The smartphones were really underpowered. They really were low on space, and I think just having those multiple apps was just expensive and people didn’t have the devices to afford it. So that was a big part of it.
In China, it was just a lot of people coming online, smartphone-first, they were not used to desktops, they were not used to websites. They kind of just had their phone and then they had this app, and it was just a very natural sort of rapid progression from there.
Scott: Right. And can you just explain the Chinese internet in basic terms to maybe our Western listeners who don’t fully understand how separate everything is?
Ananya: Yeah, it’s very closed off. It’s very domestic-heavy. Like you won’t find an Uber or an Airbnb or a Google or a Facebook there. All of those mainstream apps are blocked out. So you do have local companies and you do have local apps kind of substituting for them.
Scott: And the Chinese population is so enormous that it’s pretty viable to just have a domestic internet business, right?
Ananya: Correct. Especially because it’s sort of homogenous. Like, if you talk about India, we have a lot of different languages. We have a lot of different cultures, we have a lot of different economic classes, everything, compared to China, which obviously they also have different stratas, but generally it’s a more homogenous population.
Also because the regime—like if you have an authoritarian regime versus a democracy—it makes a difference in how sort of technology and information is disseminated. So I think those conditions also helped.
Scott: Are there other superapps in China?
Are there other superapps in China?
Ananya: So I think the one that comes closest would be Alipay, which is Jack Ma’s Alibaba’s payment app, which initially started off kind of like an Amazon pay where you just pay on the e-commerce site.
But now it’s gotten bigger. It allows international cards as well. It lets you pay different merchants, but it doesn’t come with all the features that WeChat has.
Scott: And is it the case that as you get more and more rural in China, WeChat maybe becomes less central? Or is it pretty pervasive throughout the entire country?
Ananya: It’s actually pretty pervasive because what we were discussing just earlier about most people having the smartphone, even if it’s the cheapest one, and the fact that vendors, they have bank accounts. A lot of the populations tend to be unbanked, but China’s not one of them.
Scott: Right. Does WeChat kind of play a gatekeeper role in the Chinese tech ecosystem in a similar way that Apple and Google do with their app marketplaces in the West?
Comparing the US and Chinese tech ecosystems
Ananya: So I think what’s important to remember about Apple’s App Store is that it’s very driven by kind of having control of what other developers are doing on the platform. So, for instance, the reason you don’t allow a plugin or the reason that you don’t allow payments to go through without the in-app purchase is essentially a way of monitoring and surveillance.
But when it comes to WeChat and Tencent, I think it does, yes, lock people in, but it’s not like it’s cherry-picking in terms of who can be on it—domestic vendors or international vendors. The idea with WeChat is more to have everybody there.
Scott: Yeah. It’s funny that you mentioned surveillance and privacy when I bring up Apple, because one of the first things I think about with WeChat is its proximity to the Chinese government and kind of the expectation that there is not a ton of wiggle room between that company and the government. Is that a fair evaluation? Are WeChat communications being monitored closely by the Chinese government?
Ananya: So of course WeChat will say otherwise, you know, WeChat won’t agree that they are being monitored, or they won’t explicitly say it. But there have been times when, yes, it has been a point of concern. Like, there was a 2017 report by Toronto Citizen Lab, which found that, in a chat, if it said “human rights lawyer,” whether it was in Chinese or English, it would get retracted.
Like the person wouldn’t receive that message, but the sender didn’t know why that was happening at all. But Amnesty International ranked it 0 out of 100 in terms of, like, any kind of transparency.
Scott: Yeah, 0 out of 100 is not a great score. I realize I never asked you a really important question. How does WeChat make money?
How does WeChat make money?
Ananya: Oh, so WeChat makes money the same way that a lot of apps do, where they will, you know, charge merchants for putting their storefronts on the app, take a cut out of certain services that they provide. So it’s the same way that a lot of apps make money: It starts off free and then there are things built into it that own commission for the app.
Scott: Does WeChat make money off of advertising too?
Ananya: Yes, it does.
Scott: Before we move on, I want to ask about some of the things we were kind of hinting about earlier between WeChat status in India and the United States. What happened with WeChat in India? Why can’t users access it anymore?
What happened with WeChat in India and the US?
Ananya: So in June, 2021, there was a standoff at the India-China border. And in retaliation, the government, citing national security concerns, blocked a bunch of apps, I think over 100 or closer to 200 apps. And among them you had Weibo, you had WeChat, you had TikTok. So WeChat was kind of a casualty in that.
Scott: What happened with WeChat in the US?
Ananya: So WeChat launched in the US, and it intended to do what it did for China, but the network effects just didn’t exist, there was no existing base. So that’s kind of your first hurdle, that you’re not getting people to get their friends and family on, because no one’s really using it.
The second thing is, you know, even when they made it in China, using the user data from QQ and kind of developing it to suit those users, the rules are not as tight around data and privacy, so Tencent could kind of tailor the app to service the Chinese consumer a lot better than they could in the US or elsewhere in the European Union.
Ananya: And then also, like when you have an app, you can’t always launch with everything. So up until 2016 you couldn’t book an Uber, you couldn’t get food delivery, so it was like a pared down version of the app that China had already been using for yours and it just didn’t catch on because the usual American consumer already had apps for everything and sometimes multiple, like if you have the New York Times app and also the Quartz app, two kind of food delivery apps. So WeChat took too long to kind of fill that gap and become the app for everything.
Scott: And there was some politics at play, too. Trump wasn’t super happy with WeChat. What happened there?
Ananya: Yeah, so with WeChat, I think it’s the same data privacy issues that we’re talking about, and just the fact that they are so close to the—or at least they appear—so close to the Chinese government. I think there was concern, uh, about, you know, even things like: the algorithmic feed would kind of give you information that wasn’t maybe what the global news organizations were telling you about Hong Kong or about what’s going on in China.
And so it did feel like there was some kind of manufacturing. There was some kind of state getting involved and I think Trump was, like other governments, referring to national security concerns.
Scott: Right. What’s interesting is that a judge in the United States said that, because banning WeChat was interrupting the free communication of people that were trying to talk to their friends and family back home in China, and even though that was a small population, that was a big enough First Amendment problem here in the United States to halt that WeChat ban.
Ananya: Yeah, 100%. I think even now in conversation, when you see Biden or somebody from his administration speak, they talk about how China doesn’t let you know a Facebook or a Google in, but “we let TikTok stay. We let WeChat stay,” you know?
And because there is a huge immigrant population, you hear stories of people talking to their grandparents back home, people who have established so many business contacts, and WeChat is one of those apps which lets you only locally store data so they don’t have backup servers and things. So essentially, if you’re a business person in America and you have, like, 500 contacts in China, if we ban it one day and you didn’t have time to back it up, that’s it. They’re gone. So it is a valid concern.
Scott: Right, and it would be difficult to sustain those business relationships without WeChat and do business from America to China. Is WeChat more powerful than the phone-makers itself?
The relationship between WeChat and smartphone manufacturers
Ananya: Yeah, I think when Apple started out, it tried to behave the way it does in all markets and it wanted to be, kind of, you know, the authority, but it quickly realized that China has its own set of rules. And you kind of have to play by them to stay in there because they would kick anybody out.
They’ve kicked Google out. They’ve kicked Facebook out. So there is a lot of pacifying that kind of goes into that relationship as well. And just allowing WeChat, which technically does not comply with all their rules—like having an interface separately or allowing payments without making the in-app purchase, which gives Apple a cut—all of those do violate the rules, but it’s still an exception that’s made. So Apple is a little flexible in that market.
Scott: So let’s go back to 2009. Apple is introducing its App Store for the first time. Why was that an important moment in the history of the mobile phone?
How Apple’s App Store changed mobile phones
Ananya: So I think Apple kind of set the tone for what that phone was going to be used like, and who the people were who were going to give you the services that you wanted.
And I think a big part of that was established in creating the Apple App Store and kind of deciding how many developers would be on it, what kind of developers would be on it, what kind of vetting processes Apple puts in place, and, you know, what the motivations behind that are
Scott: And why did Apple open itself up and allow third party developers to join the app store and to sell their products?
Ananya: Yeah, so I think that with Apple, you wouldn’t have imagined doing it all because the market is so different to the Chinese market. So you’re not striving for a WeChat. What you’re striving to do is still be that ecosystem that houses a WeChat and other things.
So I think Apple decided to kind of let the developers in, create a sense of, you know, competition and drive more innovation, which is kind of the pillar that the Federal Trade Commission also stands on today, right? Like, they want you to not have so many integrations, and they want things to be separate so that there can be more competition and more innovation. And I think that’s why they opened it up.
Scott: There’s a stronger antitrust authority in the United States that wants to separate the people who own the platform from the people who are providing services on it.
Ananya: Absolutely, because that way you can’t tell people what they should be using. You give people the choice of what they want to use.
Scott: I remember very vividly watching early Apple commercials and seeing the tagline “There’s an app for that,” and they would show Pandora radio, and this app called Urban Spoon was always on the, the commercials and it just looked enchanting to see the mobile internet in a new way at the time. And it was just a great marketing tool for Apple.
Ananya: You know, they sort of sold the phone as something that can give you everything without having to do the sort of heavy lifting that you’d have to do if you were to create all of these individual apps. And I think, you know, when I was talking to Phillip Shoemaker who co-wrote the guidelines on the Apple Store with Steve Jobs, he was basically talking about how Apple never really had an issue with having an app that can do multiple things.
The issue that they had was more that they wanted to build an app culture where the user was getting just what they wanted. It was a way of kind of controlling what the user is paying for, right? So it’s part taking control and part also taking responsibility.
Scott: And what was that original Apple business model? How did Apple and then later Google make money?
Ananya: So I think they quickly realized that, uh, it’s great to have people come on your store and, you know, give services to people, but somewhere you have to figure out a way to take a cut as well. That’s where your plugins in your in-app purchases and things come in where they can take a slice of that. And that also kind of serves as a filter, right? So if apps are not willing to do that, then they’re restricted in the services that they can provide. And eventually the ones that end up doing well are the ones that can give more services, and Apple gets a cut out of it as well. And it’s the same with the Google Play Store.
Scott: And what was Apple’s cut?
Ananya: So as of right now, apple’s cut is 30%.
Scott: Right, there are some exceptions. Smaller cuts for small businesses. Some apps are exempted entirely. But ultimately Apple has made an enormous amount of money off of taking a pretty decent-sized cut from mobile developers as kind of the only game in town.
Ananya: Correct. And I think the backlash has also been pretty big because of that.
Scott: Coming up, we’ll talk about whether or not a superapp will take over the Western market and who might build it. But first, a quick break.
OK we’re back with Quartz’s Ananya Bhattacharya. And Ananya, my big question is when am I going to get a superapp? Why isn’t there one in the US?
Why is there no superapp in the US?
Ananya: So I think the answer is kind of two-pronged. One is just, you know, simple consumer habits. People were already used to having separate apps, having phones with a lot of storage, and having, you know, easy access to the internet.
So it just didn’t occur. And just regulation, just building this app itself, like who is going to take charge and build this app and kind of deal with scrutiny that comes with ride hailing and also with fintech, and also with food delivery. It just seems like a task.
Scott: Right. I feel like Americans get a bad rap for just, like, taking the easy way out of everything. But it’s funny that our consumer habits are just being used to using a different app for every single thing. You know, paying on Venmo and ride hailing with Uber or Lyft, there is still an app for that. Even, you know, 15 years later.
Ananya: Right, but you could argue that that’s the lazy part, right? That you’re not changing the habits.
Scott: Right. There’s always that. Is there an argument to be made that one of the big US tech giants does have a superapp? I’m thinking about Facebook in particular.
Ananya: in particular. Yeah, I was just going to say, so Facebook—Meta, now—is definitely a player that’s been trying, and we also know that they’ve tried asking the Apple App Store to kind of allow that sort of an ecosystem and it doesn’t happen, you know?
And I think Facebook has tried to build it all into one, and then they’ve kind of just splintered off and it hasn’t worked. So they put payments in Facebook Messenger and also in WhatsApp. And the demographics that you’re dealing with with these apps are also very different. So it’s not for lack of trying, I just don’t think they’ve been successful.
Scott: So Meta owns Facebook. It owns Instagram, which it bought. It owns WhatsApp, which it bought, and then it spun off Messenger, which was originally part of Facebook into a separate app. So it has these big four apps, but it keeps them increasingly separate. Why is it doing that?
Ananya: Yeah. I have a feeling that it’s not their choice entirely. It might just be regulation consolidation is harder in the US. There’s an app in South Korea called Kakao, which is essentially another superapp, and they have 187 affiliates to help you do different things. And there is criticism in that country now about how they’ve grown so big and they are kind of getting unstable. They’re not able to handle it. That was a network outage that was huge, you know, late last year. So I suspect that technical aspect might also be a kind of behind the scenes issue for even a Meta or a Facebook, you know, to handle all of that. It’s not just about wanting to do it, it’s also about being able to do it.
Scott: But there are a lot of things that you can do within Facebook. There’s Facebook Marketplace where you can buy and sell goods. There’s still social media, there’s payments, there’s Stories, there’s calendars, birthdays, lots of different things. But I guess it pales in comparison to something like WeChat, where you can literally live your entire life on that app.
Ananya: Correct. And I think you can do without Facebook as well. Like I don’t remember the last time I logged on. I do use WhatsApp and Instagram, but I don’t know when I used my Facebook profile. You know when you have a superapp, you really mean that in every sense. Like it has to have everything. I think there are apps that will try to do some of the things ,and then you can call them like, “complementary apps,” like, “adjacent services apps.”
So if an Uber kind of gives you a ride, it also gives you food, right? So they’re trying, but I see the future of superapps kind of being more just industry-specific. So maybe you have, like, you know, a car owner’s app or you can sell your car, service your car, rent your car out for drivers, or whatever.
But it’ll just be, you know, limited to that if anything were to come up in America, or, like you have a parenting app so you can book a nanny, you can buy diapers, do whatever, you know, but you won’t have the diapers and the kind of, uh, car selling in the same app.
Scott: I think Facebook should get into diapers.
Ananya: It’s a big market.
Scott: That’s the next big market, yeah. So a lot of this talk has fizzled down, but last year Facebook changed its same to Meta. They promised to bring the metaverse online, which was a virtual reality, immersive internet. That was something new. And we’re not talking as much about it these days because there hasn’t been a ton of progress on it or consumer adoption of Meta’s VR devices, but how much do you think that was in response to Apple’s choke hold on the app marketplaces and Facebook’s inability to do anything about that.
Ananya: Yeah, I think it’s interesting you bring up the metaverse because it’s not like Meta was the only one working on it, but, like, we were talking about having different revenue streams. So if you get, like, NFTs and now I’m buying shoes in the metaverse, and I’m doing other things that don’t require the oversight of an Apple, it opens up a revenue stream for sure, but I think metaverse is also an easier conversation to kill because it is so technology driven. And when you see, you know, avatars with no legs or you see things glitching, maybe it’s easier to say, “OK, we’re not ready for this.”
But a superapp is so vague to some extent that you can still believe that everyone’s building it, right? You won’t actually end up stifling that conversation just because we think that Apple does have some dominance right now, you just think someone will circumvent it.
Scott: And the public and regulatory scrutiny is so tight around Silicon Valley right now that…
Scott: … it feels like the only place that they can go is just some brand new market that no one’s in.
Scott: And maybe own an app store and dominate it in the Metaverse.
Ananya: Yeah, that’s farfetched. But good luck?
Scott: What do you mean that Apple won’t allow Facebook to make a super app?
Ananya: So Apple’s store’s guidelines specifically don’t allow a couple of things. One of them is creating an interface that’ll work as kind of a second home stream, which is what WeChat is to people in China.
And the other one is to not allow in-app payments that are not with Apple’s cut, right? So the moment you make a superapp where the appmaker is kind of controlling all of these things, it already violates the guidelines, and Apple just won’t allow it.
Scott: Is there an argument that Amazon is a superapp?
Ananya: I think it started off trying to be one, if I’m not wrong, their tagline also said something about selling everything. But I think it’s very limited to commerce and content. Right? I think we don’t see Amazon kind of veering into, say, chatting and the fact that it was kind of coined for WeChat makes WeChat the benchmark.
So if you’re not offering almost as much as WeChat is, then you’re not there. Sorry, Amazon.
Scott: Amazon does own Twitch though.
Ananya: That is true.
Scott: So maybe there’s a future in which we’re just watching everything on livestream and buying stuff that way, and…
Ananya: And then next time Jeff Bezos can probably sell us a seat on a spaceship on Amazon as well. That’s some kind of ride hailing.
Scott: Yeah. What’s going to be the superapp of space? That’s the real question, which brings me naturally to Elon Musk.
Scott: For better or worse, we have to talk about Elon Musk. Elon Musk is probably the most recent of a long line of people in the United States to kind of promise a superapp to American consumers. What happened with Musk and his promises to turn Twitter into a superapp.
Will Elon Musk turn Twitter into a superapp?
Ananya: Well, I think firstly, he lost a lot of money and then he got a lot of it back, and we got distracted by him being the world’s richest man and then not being one and then being one…but also Musk says a lot of things that don’t happen. Like, he was supposed to bring Tesla to India, I guess, like, five, six years ago now, and I don’t even think that’s happening at all anymore. And I think the superapp thing is a little more nuanced. He wanted to make this app called X for everything. He said he bought Twitter so he could sort of build it ground up from there.
Which you know, in theory makes sense cuz if we chat started from QQ, that was a social networking chatting app. Like, why can’t you do it from Twitter? But I think you can’t do it from Twitter, because if you see it in his handling of how he’s kind of taken over Twitter, you know, he brought over some people from Tesla to work on the engineering side. He fired a bunch of people, and the vision is kind of just not there. So he had the intention, but he’s still kind of struggling to make Twitter, Twitter. So I don’t know how he’s going to make it the Everything App.
Scott: Yeah. He seems to be taking the opposite approach. He’s taking every single part of Twitter and trying to change or monetize it, as opposed to bringing more things and more features and more third party companies into the fold and making some money off of that.
Ananya: Yeah, because I think he’s realized what Mark Zuckerberg realized with his companies and he was like, “Let me just keep it separate, and maybe that works out better.” And I also think some of Musk’s stock does act as a deterrent. If he is working on a superapp and he has this vision, it’s a big deal, right? You need a big company to kind of come in and do it, or you need someone with, like, deep pockets to build something like this.
It was the same in China, like, a decade ago as well. So if Musk kind of takes charge of that conversation, he can shape it. So whether or not it happens is different, but if it happens, will he play a big part in it? Probably. If
Scott: So if you wanted to build a superapp, why buy Twitter first? Because it seems like it’d be easier to just make one from scratch.
Ananya: I actually do think so as well. I do think that retrofitting Twitter into a superapp or like morphing it into something else is just…it makes no sense to me. And also it’s Twitter. It’s not like he bought WhatsApp, right? Or like something that was as ubiquitous. Because Twitter doesn’t have that big a reach.
It is a very specific type of person who uses Twitter, if we place it in the global context. So yeah, I don’t know what he was thinking.
Scott: I don’t think he was thinking.
Ananya: That’s true.
Scott: It’s a signal of ambition
Scott: And it’s a lot easier to be ambitious about going to space or creating electric, autonomous vehicles…
Scott: ….than Twitter.
Scott: It’s funny because the prospect of an American company making an Everything App is limited by the fact that most big tech companies can’t just buy their way into it. There is enough antitrust scrutiny that Facebook, for the most part, has to be done buying huge companies.
Any one that it does is going to get antitrust scrutiny, not only from US regulators, but also from abroad.
Scott: The UK blocked its deal to buy Giphy!
Scott: There’s not a lot of wiggle room, so any American company that wants to make a superapp has to make it themselves essentially.
Ananya: Yeah. And then what’s your incentive, right? Because at the end of the day, if everyone, like, the point of business is to make money, and then if you’re competing, even if you make a superapp, but you’re ending up competing with Instagram or Facebook and not getting the kind of advertisers and things, then what’s the payoff? You know?
Scott: Right. How important is antitrust regulation to this conversation? Is that really the reason that we haven’t gotten a superapp outside of China and the reason that we won’t have one in the future?
Ananya: Yeah, I think it is part of the problem because WeChat was “right time, right place, right people.” So you had obviously the regulation. Even in China today is a little bit, you know, the scrutiny is a little bit higher than it used to be.
The government did help at the time. They did even use the platform, and they didn’t kind of get in the way and create roadblocks, which is a blessing in itself, right, for WeChat. Whereas today when you see the way the FTC functions and the way you know, just the regulatory oversight in the US is, even if it’s something like, you know, Microsoft buying Activision, a big tech company buying a gaming company, it’s not really a vertical integration.
You wouldn’t think it’s such a big deal, but it is, right? So now when you come down to locking people into an ecosystem in, say, Facebook’s, that will have a huge repercussion, right? So I think it is a big part of the conversation today, even in China and more so in the US.
Scott: Why do you think tech entrepreneurs are still, to this day, promising to build a superapp? Even if it just seems completely unlikely that the consumer behavior isn’t there and the antitrust scrutiny is just too high.
Ananya: I have a one-word answer and that answer is “money,” because it’s the fact that you are getting everyone to do everything in one place. So if you can figure it out, then you can have the multiple advertising streams within that one app. You can take a cut from different services all in one app versus doing it just in one. So the promise is big. I just don’t know if there’s a way to actually make it happen, but if it does happen, it’s definitely going to be bigger than any single app that exists today.
Scott: Do you think anyone in the US actually wants a superapp?
Ananya: So there was a survey that PayPal did where they surveyed, I think, over 9,000 people in Australia, Germany, the UK, the US… and overwhelmingly most people were slightly interested in a superapp. About a quarter of them were “very” or “extremely” interested. So if we’re going to take that as a benchmark, then people sort of kind of want a superapp?
Ananya: I think they also don’t know why they would need one, you know? Because at the end of the day, the superapp is not bringing something new. It’s just consolidating things.
Scott: It’s also the posturing that you want to build a superapp the point. Is that just good marketing and a good way to boost a stock price?
Ananya: I think it shows some kind of sense of security, right? You’re kind of saying that I’ve achieved all that I can achieve and now I want to do the next big thing. It’s that confidence that you inspire.
Scott: So why does it matter that China has a superapp and the rest of the world really doesn’t, because ultimately what you’re doing is either opening your phone and seeing a bevy of services or opening your phone and then opening an app and seeing a bevy of services.
Ananya: So I actually think the superapp conversation should be more concentrated, not in the sort of Western or developed economies. South Asian markets, or even India for that matter. Those are the markets where it still matters, because you still have underpowered smartphones, you still have people who are, like, unbanked, whose primary habit is not to swipe their card, you know?
So I think having a conversation about “Why do we need a superapp in the US?”—that’s more about ambition and about, you know, who’s going to take control and if people are going to take to it. But in other parts of the world, I think the conversation is about “How do we get the most out of this phone for the least amount of money?” Still.
Scott: If Apple and Google’s monopoly power is eroded, do you think that could pave the way for a superapp in the United States or elsewhere?
Ananya: In theory, yes. And especially at the beginning, like I think when you’re just getting used to them, maybe, you know, if they get rid of the 30% fee or if like, “OK, you can now, you know, use plugins or you can now accept payments within the app without informing us,” it will start that. But eventually, I think if it ran rampant and if, you know, there were issues, if consumers started complaining that someone’s fleeing them or something’s not working… maybe those safeguards kind of come back, or maybe other people start regulating it. So I don’t think we can say blanketly that yes, it will happen. I think it’ll also wreak a lot of havoc before it’s figured out.
Scott: Ananya, thank you so much.
Ananya: Thank you! This was so much fun. I had a great time.
Scott: Ananya Bhattacharya covers technology and global breaking news for Quartz.
The Quartz Obsession is produced by Rachel Ward with additional support from executive editor Susan Howson and platform strategist Shivank Taksali. Our theme music is by Taka Yasuzawa and Alex Suguira. This episode was recorded by Eric Wojahn at Solid Sound in Ann Arbor, Michigan, and also at Octavia Studios in Mumbai.
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Michelle Cheng: I think it’s important to remember that sometimes these models just don’t know the answer. You know, they’re not well trained to know whether they know something or don’t know something. You know, humans are better at knowing what they don’t know.
Scott: I’m Scott Nover. Thanks for listening.
I think that was in an Apple commercial, right? [sings] 1, 2, 3, doo doo doo. That’s not a bad song. Eric! That song… good or bad? OK. He said he won’t change the channel, but he won’t sing along.