Apps are like people - they tend to come together for convenience.
Today, every smartphone user has many apps installed on their device to meet their unique needs. That's why total app revenue is spread across a variety of labels. Between Google's predictive information services and the prevalence of artificial intelligence assistants like Siri, mobile app users expect their phones to provide everything they need.
A new concept has emerged: Mega apps are attracting multifaceted business giants and financially strong tech giants to build the Mega app business model and capture the largest share of the growing digital revenue.
Today, in this post, we'll learn what a Mega app is and how app developers can learn from the business model.
What is a Mega app?
A Mega app provides a single platform where users can do multiple unrelated things, such as ordering food or hailing a cab, under the same app.
Let's take an example to understand it better. Think of the Mega app as a shopping mall that provides retail space for a variety of brands and stores across different businesses and verticals.
This is achieved off-platform by "applets" developed specifically for the Mega app platform or "Progressive Web Apps" (PWAs) that open in the Mega app's in-app browser. The concept originated in China and Southeast Asia. WeChat, Paytm, GoJek and Grab have since analyzed their customer base, needs and preferences and added more products for their customers to become Mega apps. These apps are now valued in billions of dollars. We believe Mega Apps is an idea whose time has come.
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Benefits of developing Mega Apps
Though it takes time and money on Mega app, it still has benefits for developers like:
- Provide all available organizational information resources quickly and easily from one place.
- Avoid users having to download large amounts of irrelevant content.
- Enables users to quickly and easily access the specific information they need
- Minimize maintenance and hosting costs. The cost of a single Mega app includes the maintenance and hosting of all the component toolkits.
- Accelerate the creation of new apps. Building new apps as toolkits within larger apps means no need to publish new apps to the app store.
Examples of Mega apps
Western apps are not that different from each other. WhatsApp basically offers the same suite of services as its less popular competitors, Viber and Kik - the only real motivation for downloading an app is the number of friends using it. This is not the same as many popular apps in Asian countries.
Alipay is the mobile and online payment platform of e-commerce giant Alibaba. As a standalone app, it allows third-party services (usually Alibaba-invested companies) in addition to several finance-related apps, with other services including buying movie tickets, hailing a cab, finding bike sharing, ordering food, shopping, booking hotels and more. On top of that, Alipay has launched a wider range of its own mini-applications this year. There are more than 200 Mio transactions per day, with over 500 active Mio users.
WeChat is often seen as the "everything app" for China's nearly 800 million smartphone users: it's a gaming machine, a bank, and even a gateway to China's carpooling giants, food delivery and frugal shopping. It's also available in other regions, giving WeChat a monthly active user base of more than 1 billion.
Because of its ubiquity and dominance, WeChat has been a coveted and seemingly impossible product for social media companies to replicate. As a do-everything app, it has displaced device makers like Apple, Samsung and Xiaomi, acting as a virtual replacement for operating systems like iOS and Android. Nothing in China can compete with WeChat, including Apple's iMessage or Facebook's Messenger, or even the encryption-friendly WhatsApp.
What WeChat does is embed a constant stream of new services and features on their platform, especially the introduction of Mini Program and its collaboration with other in-app features. The new features leverage the powerful network effect that WeChat already has as the de facto messaging platform in China," said Willy Shih, professor of management practice at Harvard Business School. By constantly adding services, WeChat will only become an integral part of everyday life and therefore harder to abandon. "It's convenient for everything: paying, getting information, ordering things," he adds.
Tencent is bringing huge amounts of traffic to the Mini Programs, while also making it less difficult to develop. Mini Programs are particularly supportive of B2C (business-to-customer) cases, as they easily maintain users based on the WeChat infrastructure. WeChat also saves the cost of acquiring new users compared to traditional forms of online advertising.
Korean companies Samsung and LG are two of the country's three most popular handset makers, and Kaokao Talk, developed by Seoul-based Kakao Inc, ends up being used by 93 percent of Korean smartphone users.
And for good reason, too, as the app is one of the world's most powerful messengers. In addition to the standard messaging and voice calling features, the app is open-source, allowing users to make creative and unique themes for themselves and others.
Another simple but very rare feature is the ability to create events from within the app. Coordinating events with friends is an important part of Facebook's appeal and the reason many people struggle to get off social networks.
Another social media-like feature of KakaoTalk is the ability to buy real-world gifts for your friends. You can purchase vouchers for food, services and products from partner companies, and the list is steadily growing as the app becomes more popular.
Gojek is a true one-stop Mega app in Indonesia, worth $10.5B, offering a multitude of services such as cabs, bike cabs, food delivery, shopping, payments, daily needs and news/entertainment. The company was born during the app boom in 2010 when WeChat and Grab also launched. They entered the game early and offered high-frequency products such as car hailing, bike cabs and messaging platforms. In time, these companies will offer more products to their customers to create stickiness that cannot be dissipated.
Advertising and monetization models for Mega apps - taking WeChat as an example
WeChat is feature-rich, has a large community and has accumulated a large amount of user data. In marketing, this can mean very valuable information for paid media campaigns. In fact, many companies in China started their digital presence on WeChat before launching their own websites or apps.
In this case, advertising can help companies achieve their goals: download on the app, attract new followers, generate leads or registrations, drive traffic to the official website or applets, increase offline traffic and sales. The WeChat platform offers 3 advertising spaces.
WeChat Moments Ads
WeChat Moments Ads are sponsored content in users' WeChat Moments feeds in their community posts. Both Chinese registered companies and foreign companies can advertise under a minimum investment of 50 RMB/day (bidding) or 50.000 RMB/event (booking). Such ads typically contain the brand name, profile picture, ad description, link to a site hosted on Tencent's servers and up to 6 photos or short videos between 6 and 15 seconds.
WeChat Article Banner Ads
WeChat Article Banner Ads appear in the middle or at the end of the public article. This type of ad has 3 components: an article written by WeChat Public; a banner with a logo, account name, and promotional headline; and a call-to-action phrase for the landing page.
WeChat Mini Program Ads
WeChat Mini Program Ads are paid media spaces in the applet interface. Ads are displayed to users in three formats as they navigate through the applet or game: banner images, videos (incentive ads), or pop-ups. While WeChat inserts these ads based on the user's preferences, advertisers cannot choose the exact placement of the ads.
The challenge of developing mega apps
Companies planning to build Mega apps may face the following challenges on the road to success.
Massive initial investment
As part of the mobile app development industry, you know that even a single app platform can take a lot of time to develop. Now, you can imagine how much time and money Mega apps require.
To develop a mobile app, you typically need an infrastructure to start app development with your expert server team, development and design team, testing team, customer support team, and many more people. That's why Mega app development also requires a well-structured infrastructure and a large and experienced team. As you know, Mega apps will contain various services on a single platform. Therefore, to seamlessly embed and share data across multiple systems and your products, you need to integrate multiple large APIs.
User Privacy and regulation restriction
User access implies power and allows control. Companies need to take further steps to enhance the monetization of user access by assigning traffic.
You need to include strong ways to authenticate users in your app, and just as you're building something big, your responsibility to authenticate users doubles.
Startups (and incumbents) must constantly monitor the marketplace and must follow a smart partnership and investment strategy for integration. The key here is to think "big" and outperform core competitors.
Lessons for beginners
For beginner and mobile app developers, the new secret to success is integration. The growing popularity of chat apps foreshadows a future where users can summon Uber, order flowers, buy clothes, and complete any other type of financial transaction directly from within larger apps like Facebook Messenger and Telegram.
Let's take a look at how Discord has transcended its gaming world origins to become the communication platform of choice for a variety of online communities.
Launched in 2015, Discord is a text, voice and video chat platform. Originally designed to help gamers chat and stream live, the platform has been embraced by a variety of communities over time. discord users rely on the platform to organize study groups, hold meetings, watch movies together, plan community events, and more. This community diversity is by design, and starting with a rebranding effort in recent years, the app has moved beyond its initial focus on gamers.
Users can access Discord using a browser or by installing its desktop or mobile (Android and iOS) apps. the desktop version offers more features, such as screen overlays while playing games. discord integrates with a variety of other apps - for example, users can connect their profiles to their YouTube or Twitch accounts and bring their followers to a dedicated Discord server. Server members can also connect to Spotify to share music.
Discord can also be integrated with some consoles: Xbox One players can use Discord to see what games their friends are playing, and Sony is integrating with Discord after making a small investment in the platform.
That user growth has helped drive growing revenue for Discord, with the platform bringing in $130 million in 2020 - almost triple the $45 million it brought in the previous year. Notably, this revenue did not come from advertising. Instead, the platform makes money through sources such as premium subscriptions and game distribution.
For startups, this isn't necessarily a death sentence - it just means that services must be toned down to where the core value proposition can exist in a conversation bubble, surfacing to users based on the content of their conversations. If implemented properly, inter-app integrations like this can generate significant revenue for individual startups, especially in on-demand economies, while reducing the friction between users and their purchases. If cloud technology and LTE wireless continue on their current trajectory, NYC app developers could find themselves generating a large portion of their revenue from users who don't even download the app.