Earlier today, we got confirmation about the partnership that Reliance Jio and Facebook were embarking upon, one that would have a massive impact on the technology landscape in India. For starters, this $5.7 billion, or Rs 43,574 crore deal, gives Facebook as much as 9.99% stake in Reliance Jio. This isn’t just any other deal, mind you. This firmly cements Reliance Jio’s and indeed its subsidiary Jio Platforms credentials as a tech and platform company. After all, this is the biggest minority shareholding deal ever for Facebook and also the largest foreign direct investment (FDI) for minority stake, in India. It is also the biggest investment in a technology company in india. This puts Jio Platforms among the top 5 listed companies in India by market capitalization, within three and a half years of the launch of commercial services.
No one really needs to establish Facebook’s credentials as a global tech giant. At the same time, Reliance Jio and its investments in India, particularly in the telecom space, have changed the very dynamics of the industry. This may just be the time when Jio evolves to bet big on becoming a technology company. Jio is already present in the broadband space, smart devices, cloud and edge computing, Big Data analytics, artificial intelligence, Internet of Things (IoT), Augmented and Mixed Reality as well as blockchain Blockchain. At the same time, Facebook has some of the most popular instant messaging platforms in the world—Facebook, Instagram, Messenger and WhatsApp. And it is the latter, WhatsApp, which is perhaps the most crucial link in this chain as the partnership rolls forward.
The Reliance Retail’s New Commerce business gets to use WhatsApp as the platform for pushing JioMart. As of July, last year, there were more than 400 million active WhatsApp users in India. And counting. The vision for this project is to bring the nearby stores to consumers on WhatsApp, where they can browse the listings of what is in stock and what is available and place the orders on the platform itself. The nearby Kirana shops will get access to a platform they probably would have never had access to before, with a massive demographic of users potentially tapped in one fine swoop. And there are millions of these small merchants and Kirana stores across India.
“In the very near future, JioMart, Jio’s digital new commerce platform, and WhatsApp will empower nearly 3 crore small Indian Kirana shops to digitally transact with every customer in their neighbourhood. This means all of you can order and get faster delivery of day-to-day items, from nearby local shops. At the same time small Kiranas can grow their businesses and create new employment opportunities using digital technologies,” said Mukesh Ambani, chairman of Reliance Industries Ltd., in a video message.
What does this do for Facebook? The idea is to allow people to pay for what they order on JioMart through WhatsApp, using WhatsApp Pay. The much-awaited UPI mobile payments service got the approvals from the National Payments Corporation of India (NPCI) in February, for what will be a phased roll-out. The first phase will mean 10 million users. This will also fit in perfectly with the Government of India’s push for digital payments, as part of the Digital India mission.
Facebook surely has Paytm, the incredibly popular mobile payments and shopping platform, in its sights. As of August, Paytm had planned an injection of Rs 750 crore to clock 250 million monthly users by the end of the financial year. That is the user demographic that Facebook will be looking at. It won’t be a challenge to find these users though, because chances are high that almost every single one of these 250 million Paytm users will also have WhatsApp installed on their phones. It will be interesting to see where Jio Money, which is a digital payments platform, fits into all this.
“That's a big deal, because when people get access to the internet and digital tools, they're empowered to do a whole lot of new things, learning and teaching and finding communities and people they care about. And, of course, starting all kinds of new businesses and this is really important especially right now because small businesses are the core of every country's economy, and they need our support. India has more than 60 million small businesses, and millions of people rely on them for their jobs and livelihoods,” said Mark Zuckerberg, CEO, Facebook, in an official post.
The fact is, Jio has been able to make its mark so far by reaching out to pretty much every strata of the society, and not just those who would potentially return higher revenues per user. The Jio mobile data pricing is the biggest example, which has completely changed the way the telecom industry operates.
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.