FinTech Super App - Challenges in the US Market and Elon Musk's Next Move

I am not talking about an app like WeChat that lets you buy groceries, book travel, as well as every other thing you could think of.

I believe only one thing underpins the emergence of “super-apps”.

That’s lending (the finance, and core, components of a super app).

Today, we cover:

• What is a super app?

• Fintech Super App, Not Banks

• Challenges of Super-app Adoption in the US Market

• Elon Musk next move? Super Apps?

What is a Super-App?

Everything! A single application that offers diversified services for your personal/commercial life.

Think for a minute.

All “super-apps” started offering one unique service as their core competency, and all of them then pivoted to relying on one service to make money.

A Payments Platform!

WhatsApp: Started with messages, but now, you can transfer money.

Instagram: Started with sharing posts, but now, you can shop.

WeChat: Started with messages, but now, does everything and anything.

Companies need customers to move capital through their apps.

That requires trust. Or being a monopoly (which WeChat is).

FinTech Super Apps, Not Banks

FinTech Industry has been more adept at both, providing customers with unique value propositions and unlocking returns from ecosystem models.

They have also been at the forefront at offering creative lending solutions (buy now, pay later) to create a purchasing environment for the consumer.

Market data shows that price-earnings (PE) ratios of publicly traded FinTech firms have grown 16% annually since 2017.

Over the same period, the banking trends shows that their PE ratios have declined slightly.

Why do you think that is? The adoption of an ecosystem.

The best on earth: Apple Ecosystem! They look more robust than ever to bring in a super-app. Though, it looks like they already have (in the form of their business ecosystem).

The nature of the ecosystem and its unique positioning in messaging, payments, and banking make it ripe for play. What better user base for distribution than the iPhone?

Challenges of Super-app Adoption in US Market

• Super-Apps have taken Asia by storm.

• WeChat and Alipay in China.

• PayTM and TataNeu in India.

• GoTo, GoJek in Indonesia.

• Kakao in South Korea.

Why not the US?

Fragmented App Market (Google for search, Amazon for e-commcerce and Facebook for socials)

Multiple Apps By Each Tech-Giant (Google search - Google maps, Uber Eats - Uber)

Different Regulatory Environment!

Elon Musk's next move? A Super-App?

Elon Musk's next move is attempting to create space in a crowded tech market. He is essentially willing to go to war with Paypal, Meta, Amazon, and Venmo.

Is he too late for the game? WeChat began a decade ago when China’s population was growing, and the digital space lacked a major power player.

Uber and Lyft were just getting started a decade ago, and Facebook hadn’t even acquired Instagram yet.

Twitter is fundamentally different from WeChat, and so is its audience.

My view is that it won’t be a winner-takes-all market, and there could potentially be 3–4 super-apps with overlapping features.

What do you think?

See you next week!