Can Elon Musk's X Succeed Where Others Failed?

Introduction

In the world of technology and mobile apps, a quiet but significant divide has emerged on the global stage. On one side, we have countries in Asia, primarily led by China, where the concept of "super apps" has taken hold and thrived. These super apps, like WeChat, Alipay, Gojek, and Grab, have become integral parts of people's daily lives, offering a wide range of services from messaging to payments and more, all within a single app. In these countries, super apps reign supreme and have even managed to dominate entire industries.

However, on the other side of the divide, we find Western countries and most of the rest of the world, where the super app model has struggled to gain traction. Even tech giants like Facebook, Uber, and Snapchat have attempted to build super apps at various points, but all have fallen short of replicating the success seen in Asia. Now, in a surprising turn of events, Elon Musk has announced his intention to try once again with his revamped Twitter, now called "X," which he believes could potentially take over a significant portion of the global financial system.

In this article, we will delve into the reasons why super apps succeeded in some regions but not in others, and we'll explore Elon Musk's ambitious endeavor to turn X into a Western super app. Can X succeed where others have failed? Let's find out.

The Rise of Super Apps in Asia

The story of super apps began in China, with WeChat leading the charge. WeChat's innovative integration of messaging and payments, combined with the introduction of mini-programs in 2017, allowed users to access a wide array of services and third-party apps directly within the WeChat platform. This move made WeChat the go-to app for everything from ordering takeout and booking taxis to making peer-to-peer payments and shopping online. WeChat quickly became a central part of daily life for billions of users in China.

Alipay, a formidable competitor, followed suit and replicated the super app model, offering similar services to WeChat. Other domestic and international companies joined the super app race, creating a landscape where users could perform countless tasks within a single app.

The key to the success of super apps in China and other Asian countries was their ability to integrate a broad range of services and cater to the unique needs of their users. This was made possible by a lack of centralized control by companies like Google and Apple over the Android ecosystem in China, which created an opening for a centralized platform like WeChat to flourish.

Super App Models Around the World

In contrast to Asia, the super app model has struggled to gain a foothold in Western countries. Tech giants like Facebook, Google, and Uber have all made attempts at building super apps, but these efforts have not yielded the same level of success seen in Asia.

One of the key reasons for this disparity is the different approach to app ecosystems. In Western countries, users have grown accustomed to using specialized apps for various tasks, and there is a preference for focused apps that excel in their specific functions. When a feature becomes successful within a particular app, it often leads to the creation of a standalone app dedicated to that feature. For example, Facebook separated its messaging service from its core social media app, while Google split its messaging and video calling features into multiple apps.

The Three Super App Models

To understand why super apps have succeeded in some regions and not in others, it's important to categorize them into three distinct models:

1. The True Super App: This model, exemplified by WeChat and Alipay, features an open third-party ecosystem of downloadable mini-programs within the app. These mini-programs offer a wide range of services, creating a comprehensive digital ecosystem.

2. The Local Services Model: Super apps like Grab, Gojek, and Meituan focus on offering various local services, including ride-hailing, food delivery, and more, all within a single app. These services are typically provided directly by the company or its affiliates, catering to the specific needs of densely populated urban areas.

3. The Payments App: This model, best represented by India's Paytm, centers on digital wallets and payments. These apps offer a range of payment options, from peer-to-peer transactions to utility bill payments, and often integrate with various service providers.

Elon Musk's Ambitious Vision for X

Elon Musk has made it clear that he aims to turn X into a Western super app, with a specific focus on payments. Given his prior experience with PayPal and X.com, Musk appears to be uniquely positioned to lead such an endeavor. However, several challenges lie ahead.

In contrast to China and India, where successful super apps were built around core payments use cases (peer-to-peer transactions, online shopping, etc.), X faces the challenge of creating a core payments use case from within the app itself. Musk's strategy involves adding various transactional features within X, including paid subscriptions, exclusive content, and advertising revenue share models.

While this approach may form the foundation of a payments ecosystem within X, it has faced hurdles, with initial user adoption of paid features proving lackluster. Additionally, convincing X users to transition to a social media app for payments presents a significant challenge.

Possible Paths Forward

One potential path for X is to build a wallet for low-frequency payments, such as airline tickets, utility bills, and other infrequent transactions. However, this would require X to rely on backend integrations with other companies, similar to India's Paytm model.

Conclusion

The concept of a Western super app is not inherently flawed, and Elon Musk's ambition to create one should not be dismissed outright. However, Musk's decision to transform Twitter into X and pursue this goal presents significant challenges and risks. Twitter's core social media business is already facing stiff competition, and diverting resources to build a payments app could further complicate matters.

While Musk's vision is undeniably ambitious, there are alternative routes to achieving the same goal, potentially more efficiently and with fewer complications. As technology enthusiasts, we can only watch with fascination as Musk embarks on this improbable journey. Regardless of the outcome, the quest for a Western super app continues, and the world eagerly awaits to see if Elon Musk can succeed where others have struggled.