What are the possibilities for the Japanese market, as seen from successful overseas super app examples?

Super apps, which integrate various functions, have become widely popular, particularly in China and Southeast Asia. While apps combining multiple functions do exist in Japan today, a true super app—one used across all aspects of daily life like those in Asia—has yet to emerge. Consequently, some may be thinking, "I hear about super apps, but I don't really know what they are." Will such apps emerge in Japan in the future?

This time, we examine why super apps are gaining renewed attention and their potential in Japan, exploring the question: "Can the success patterns of super apps in Asian countries be applied to the Japanese market?" We also learn from the super app concept about how to develop services that meet user needs.

"Super Apps" consolidate essential daily functions to enhance customer experience

In today's world, where countless diverse apps are developed, many people likely find their smartphones overflowing with apps due to the sheer variety. Amidst this, a new style of app called the "super app" is developing in emerging markets like China and Southeast Asia.

A super app is an integrated application usable in every aspect of daily life. Services typically include:

• Messaging and calling functions
• Community features like social networking services (SNS)
• Payment and e-commerce functions
• Entertainment features like music, games, and comics
• Ticket reservation
• Ride-hailing service

These services within a super app are each called "mini-apps." Since various functions are consolidated into the super app as mini-apps, users are freed from the hassle of downloading separate apps for each service, entering user data repeatedly, worrying about smartphone storage space, and juggling multiple apps for different functions. In other words, a super app is a service that solves the inconveniences of traditional smartphone apps and enhances the customer experience.

Furthermore, for app providers, being able to access user data across various services makes it easier to develop and offer services better tailored to user needs. Another advantage of super apps is that once a user downloads the app and starts using one service, they are more likely to use other services within it.

That said, super apps aren't perfect. Challenges exist, such as "a flaw in one service affecting all others" and "increased programs potentially slowing response times." Moving forward, super apps will need to leverage their benefits while also addressing these issues.

The Global Landscape of Super Apps: Why They Exploded in Popularity in China and Southeast Asia

Super apps offer significant benefits for both users and service providers, but what is their current status overseas and in Japan? What characteristics do countries where super apps are prevalent share? Let's examine this based on the current situation.

As mentioned earlier, super apps have become widely adopted and indispensable in daily life in China and Southeast Asia.

China's most famous super apps are the communication app "WeChat" and the payment app "Alipay." These started as apps with simple functions but evolved through partnerships with external companies and the expansion of various features. China is said to have the world's highest mobile payment adoption rate, and within this landscape, these two apps hold significant sway. Alipay commands over 50% market share, ranking first, while WeChat holds approximately 40%, ranking second (as of 2019). Together, these two companies account for roughly 90% of the mobile payment market share. It is clear that super apps have become an integral part of the daily infrastructure.

In Southeast Asia, "Grab" and "Gojek," which evolved from ride-hailing services, are the two dominant super apps. Grab offers not only ride-hailing but also delivery, e-commerce, food delivery, and other services, boasting downloads covering about one-third of ASEAN's total population. Gojek also offers over 18 services (as of April 2020) and has become a massive e-money platform providing Go Pay, Southeast Asia's largest payment app.

In Japan too, several communication apps, e-commerce platforms, and cashless payment apps are expanding their functions and beginning to push towards becoming super apps. However, at present, there is no explosive growth like that seen in China or Southeast Asia, where a few companies dominate the market or a single national app integrates all essential daily functions.

Similarly, super apps serving as essential life infrastructure have not taken root in Europe and the US. One possible reason lies in the process of digital device adoption. In Japan and the West, personal computers became widespread first, followed by the expansion of mobile devices like tablets and smartphones. During this process, specialized apps catering to specific functions emerged in response to changing times and user needs, often linked to new services. This resulted in a proliferation of independent services. In contrast, in emerging economies like China and Southeast Asia, the rapid simultaneous adoption of the internet and smartphones likely made super apps—which integrate many functions and can be used across all life scenarios—highly convenient and easier to penetrate the market.

Furthermore, in developed countries, the emergence of new technologies or services often faces friction with existing services or requires legal system revisions, frequently leading to slower adoption. Emerging economies, with fewer such constraints, can sometimes achieve a "leapfrog" type of development, rapidly adopting services by bypassing stages that developed countries went through. The rapid market share expansion of super apps could be seen as an example of this "leapfrog" model.

Furthermore, a distinctive feature in China and Southeast Asia is the immense influence and economic power wielded by media conglomerates that control various media outlets. This environment makes it easier for large corporations to establish the foundation for providing diverse services and infrastructure all at once. This, in turn, can be seen as facilitating the transformation of successful apps into super apps and leading to their widespread adoption to the point where they become part of the infrastructure.

Is there potential for super apps to develop and expand their usage in Japan?

Having introduced the current state of super apps in Japan and overseas, we conclude by examining the potential for their future development in Japan.

In Japan today, numerous independent apps proliferate, making the explosive, leapfrog-style adoption of services difficult. Therefore, a super app with nationwide reach, like those seen in China or Southeast Asia, may be unlikely to emerge.

However, there may be room to develop super app-like entities in Japan by targeting specific economic zones or niche demographics. For instance, systems for information sharing between nurseries/kindergartens and parents, or locally available coupons, already exist. By focusing on services deeply integrated into users' lives or high-priority functions and expanding peripheral features around them, adoption among target demographics could be achievable.

Indeed, companies like "Gojek" and "Grab" have grown by tailoring services to local target demographics. Gojek started with ride-hailing and expanded into delivery services, shopping assistance, laundry services, and other offerings aligned with local customer needs through partnerships with regional businesses. Grab similarly offers localized services: tuk-tuk ride-hailing in Cambodia and durian delivery in Singapore.

In other words, rather than providing features upfront, expanding services and features to meet local customer needs is likely a key factor in the success of super apps.

Examples of Regional Apps in Japan

Looking at developments within Japan from the perspective of "service expansion tailored to local needs," while they may not yet qualify as super apps, diverse initiatives are emerging across the country.

・Case 1: Aizu Wallet

Aizu City, aiming to become a Super City, has adopted the "Aizu Wallet" app as its regional wallet. Beyond functioning as electronic money, it integrates with cashless payment services, offers receipt digitization, and issues digital coupons. Furthermore, during the pandemic, it added a mini-app for verifying vaccination records, positioning itself as the region's digital platform.

・Case 2: Hiroshima Metropolitan Area Point App

The Hiroshima Metropolitan Area refers to a region comprising 25 municipalities within approximately 60 km of central Hiroshima City. The "Hiroshima Metropolitan Area Point App" primarily features the "Hiroshima Metropolitan Area Point" program introduced in this region and cashless payment functions. It also includes various point-centric features like coupon issuance, lottery entries, and donations/support using points. It targets specific demographics and evolves to meet their needs.

While the above example is from a regional city, urban areas are also seeing apps like "Setagaya Pay," a digital voucher/local currency targeting Setagaya Ward. Moving forward, we may see more diverse platforms tailored to the scale and characteristics of each city.

While Japan and Western countries haven't seen the explosive adoption seen in China or Southeast Asia, where independent services each provide their own apps, there is potential for success with integrated applications like super apps in Japan. This could be achieved by focusing on specific regions and target demographics, developing apps and services with features closely aligned with local customer needs. Furthermore, region-specific super app-like services could contribute to regional revitalization and smart city development.

Super apps hold potential not only to enhance user convenience but also as a means to revitalize regional economies and address social challenges.