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Elon Musk wants to make X the new WeChat. Here's why it might not work
Kirill Golubev
Chief Product Officer
Ellen Snesar
Content Manager
January 18, 2024
It's been a little over a year since Elon Musk bought Twitter and started making changes. On the X’s all-hands call in October 2023, he reiterated what the company has already introduced this year:
The biggest change is yet to come though. Musk’s ultimate ambition is to make X a super app that would encompass everything, including “someone’s entire financial life.” The company is already working on getting money transmission licenses and plans to roll out financial services by the end of 2024.
“We’re rapidly transforming the company from what it was, Twitter 1.0, to the everything app. [...] You can do payments, messages, video, calling, whatever you’d like, from one single, convenient place.”
Elon Musk
X's owner
Musk has repeatedly said that he was inspired by the Chinese social network WeChat, which combines multiple services into one app, with a messenger and payments at its core. However, X’s attempts to repeat the Chinese giant’s success are wide of the mark for now, given the situation that the company finds itself in. Let’s have a closer look at what will pose a challenge on Musk’s way toward the super app.
A super app usually promises something specific to users, which is called positioning. For instance, Uber is known for quick and affordable rides, and AirAsia is for travelers exploring the world.
Unlike them, X lacks a clear identity beyond being an “everything app.” This makes it hard for users to see why they should use X for certain things instead of their usual apps.
“Building bridges between these products and services [is] not easy and [it will] take time and iteration for a consumer to understand why they are using Twitter to Tweet as well as to pay or purchase or do something else.”
Hussein Fazal
Founder of Super.com
Creating a universal app in the U.S. is more challenging compared to China. WeChat, which inspires Elon Musk, enjoys government support and holds a monopoly on the market. In contrast, the U.S. has regulations against monopolies through unfair competition laws.
WeChat has received consistent government support and subsidies since its inception in 2011. For instance, the operations of competitive apps such as Facebook Messenger, Line app, and WhatsApp have been restricted for years. And in 2021, Tencent, the owner of WeChat, received subsidies amounting to 100 million yuan.
It's hard to imagine something similar happening in the U.S., and a recent lawsuit against Amazon proves that. Musk talking about WeChat so much is surprising because it's really hard to compare super apps in the West and China without considering local legislation.
X’s audience in the U.S. doesn’t seem to be open to Musk’s idea. Over the past year, the number of downloads of the X app has fallen 38% globally and 57% in the US. Thus, the biggest source for new downloads of X isn’t the U.S. —it’s Indonesia and India.
“Loyal audience is crucial for building a digital ecosystem with a super app at its core. X still has this advantage, but it needs to think how to keep it.”
Alex Semenov
CEO at HeyInnovations
Experts say the decrease in numbers is because of X's rebranding and the emergence of tough rivals, especially Threads, which gained 141 million users in five months. X still offers what drew users in initially—quick insights into serious topics and real-time updates on global events. However, the rebranding and its new direction are worrying X's fans in North America.
Ads make up about 90% of X’s income. But following X’s decision not to moderate content, its advertising business is headed for a 54.4% year-over-year decline in global ad spending. Experts say this might result in a $75 million loss in revenue by the end of 2023.
API licensing fees and subscriptions are playing a role in supporting the company's financial health, but they may not be sufficient. In Q4 2023, only about 830,000 users are subscribed to X Premium, which is 0.1% of all X users. Musk seems to have high hopes for a paid subscription, planning to make it mandatory for all X users. For now, this alternative revenue stream is not yet making up for the decline in ad revenue.
Turning your app into a super app involves several steps: figuring out what it offers, learning from successes and mistakes, and listening to users. If you need help, we've got experience in this. Reach out to us, and we can guide you on transforming your business into a digital ecosystem with a super app.
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