Facebook makes a ‘Mark’ on Reliance Jio
“If Facebook wants to become Amazon in India, they will have to start from scratch. A strong local partner in the form of Jio will be a huge advantage for the social media major,”
Shyamala Venkatachalam, Founder, The Remediation Company
Currently during Covid-19 lockdown, when e-commerce grocery platforms were unable to keep up their promise of on-time delivery, the neighborhood kirana stores have made sure that essentials are available all the time. Some even allowed the customers to place Their order in WhatsApp, which was delivered to them in a couple of hours. This can also make a classic case if non-contact transaction done at a hyper local level.
Mukesh Ambani, the CEO and the Chairman of the Reliance Industries, after announcing the deal between Reliance Jio and Facebook, wherein Facebook buys a stake of 9.9% worth Rs.43,574 cr, said the the two companies would promote the use of WhatsApp to supply goods from the neighborhood kirana stores to consumers and thereafter provide assistance in education and health sectors.
This will give Facebook a key foothold in the Indian market and will help the Indian oil-to-telecom conglomerate cut debt and boost its new online grocery marketplace JioMart.
Mukesh Ambani and Mark Zuckerberg are going to take a crack at building a #superapp for India, an array others have tried and failed. The whole partnership is aimed at making Whatsapp, owned by Facebook, a sort of super app, where users will not only be able to chat but will also be able to buy their groceries or pay for their haircut.
This will give WhatsApp an inside track of payments for Reliance’s retail unit, which aims to serve tens of millions of small shops across India. It will also link Reliance’s telecom business, which has taken the market by storm since it’s launch in late 2016, offering free calls and cheap 4G internet service.
India has become a vital market for Facebook with its WhatsApp messaging platform. The number of internet users in India is expected to rise to about 850m in 2022, according to consultancy PwC, up from 450m in 2017. Facebook overall is now estimated to have more users in India than any other single country.
WhatsApp with its 400 million subscribers in the country, it’s parent company Facebook’s 250 million users in the country and Jio’s 388 million users provide a perfect start to the platform, helping connect with mom and pop stores and small merchants.
The collaboration is a big competition to e-commerce platforms like Amazon, Flipkart, Big Basket, Grocers etc., apart from payment firms like Phone Pe, Google Pay, etc. Ambani touting the phrase, “Data is the new oil”, for a few years wants access to as much information on his user’s as possible.
This strategic partnership will be key to India’s future technological plays, particularly in Virtual Reality (VR) and Internet of Things (IoT) and 5G network. This may help in deepening financial inclusion as 400 million users of WhatsApp pay-UPI platform.
India has also been going through a rapid digital transformation over the last few years and Jio has contributed a sizeable chunk to this. This deal with act as great catalyst for the #Digitallifeline for the country.
This deal could also pave the way for the growth of crypto currencies in India driven by Facebook’s own digital currency, Libra. Last year, Facebook assembled a group of companies to create an open-source crypto currency, Libra, which could potentially be used as a payment option in applications such as Messenger and WhatsApp.
Reliance Jio Infocomm LTD (JIO) has pledged to develop Block chain network in the world. So far, only startups are involved in blockchain, any crypto currencies, but experts believe Reliance and Facebook’s entry into bandwagon could be game changer.
Facebook has also collaborated with Jio in past including on a digital literacy initiative last year. But it ran into trouble in India 4 years ago when country telecom’s regulator blocked it’s “Free Basic” App which was an effort to provide free access to popular internet services including Wikipedia and weather forecast as well as its own social networking apps. This deal has raised concerns of net neutrality and data privacy as the enormous amounts of data (WhatsApp, now has over 400 million users and Jio has about 390 million telecom subscribers in India) will be collected by these entities. Data is also referred to by many experts as the new oil or new currency of the 21st century.
This deal has raised concerns of net neutrality and data privacy as the enormous amounts of data (WhatsApp, now has over 400 million users and Jio has about 390 million telecom subscribers in India) will be collected by these entities. Data is also referred to by many experts as the new oil or new currency of the 21st century.
This is due to the fact that the vast quantities of data generated by users of online services can be processed into valuable information for commercial and strategic gains by technological giants like Amazon, Google etc. Further, these concerns are more prominent especially when India still does not have a personal data protection law. In the net neutrality debate, one of the issues raised was that of telecom companies, deliberately reducing the data speeds of some players while giving faster speeds to others.
The second issue pertains to charges, i.e. access to some websites are free, while some are being charged. As players like Facebook, due to their big pockets can afford to give free access, this will impact the emergence of new players who may have such financial advantages.
This partnership comes at a time when technology is in focus, including digital payments. People are staying indoors, which means they are relying on technology and the tools it provides for work, entertainment and even the basics of everyday life. At the same time, COVID has provided an unexpected yet massive boost to digital payments.
This online deal will have mega implications on India’s retail and internet landscape. This partnership has the potential to deliver significant results for India across multiple domains. Coming as it does during the virus crisis, it is a strong signal of India’s economic importance post the crisis. It strengthens hypotheses that the world will pivot to India as a new growth epicenter, when majority of the industries are planning to shift their units from China to India.
It strengthens hypotheses that the world will pivot to India as a new growth epicenter, when majority of the industries are planning to shift their units from China to India.
In a short video message, Mukesh Ambani said, “The synergy between Jio and Facebook will help realize Prime Minister Shri Narendra Modi’s ‘Digital India’ Mission with its two ambitious goals—‘ Ease of Living’ and ‘Ease of Doing Business’ – for every single category of Indian people without exception.
In the post-Corona era, I am confident of India’s economic recovery and resurgence in the shortest period of time. The partnership will surely make an important contribution to this transformation”.