We all know Facebook and Reliance Jio. Facebook CEO Mark Zuckerberg join hands with Reliance Jio Chairman Mukesh Dhirubhai Ambani. Facebook Just bought 9.99% of stake in Reliance Jio for Rs. 43,574 crore. This made Facebook Largest minority shareholder of Reliance Jio. This is the highest FDI in the technology sector in India.
There was another collaboration. Reliance and Microsoft 10 year alliance which wants to serve to the small and medium enterprise by digital transformation. This alliance was formed in Aug 2019. This will give access to small businesses in India to applications like Office 365 and cloud platform like Azure with Jio network.
Benefits of the Deal
So in April 2020, Facebook bought a stake of reliance, let’s see the reasons behind it
- This deal helps Jio Cut debt and gives a strong foothold in the massive Indian market.
- Reliance Jio has 388 million customers, Facebook will get access to the wider Indian audience.
- Both companies want to create an opportunity for 60 million small businesses across India.
- Facebook and Jio deal is to effectively grow the Indian digital economy.
- One of the major reasons is to collaborate Jiomart with whats app.
- This will give an opportunity to small grocery owners to sell online using Whatsapp payment.
Jio which was not able to get into digital space other than ISP will get a chance to get into eCommerce and payments. There is JioMoney but we do not use it. Jio also is rolling out JioMart, an eCommerce platform for small retailers. With the help of Facebook, it will be able to get into payment using Whatsapp. This will allow retailers to accept orders and payments using Whatsapp.
Facebook has launched Whatsapp payment, which is in beta version in India. Facebook wants Whatsapp payment to enter India, as India has the largest user base. Also, Jio wants to get into payments and eCommerce. This deal will help both the giants to collaborate and give others a tough competition.
Whatsapp and Instagram are owned by Facebook. Facebook also has Whatsapp Pay which is a payment app using which you can pay via UPI to your contacts. But this Whatsapp pay is still in beta version in India. This deal might allow Whatsapp pay formally launch in India.
In India, there are 400+ million Whatsapp users, and the US has 68 million Whatsapp users. There are 2 billion users worldwide. So we can clearly see the number of users Facebook will get access to through Whatsapp, after this deal.
One of the concerns that I had is about data, will it be easy for Facebook to get data from Jio after this collaboration. Jio has 388 million users. But we can be assured because Facebook only owns 9.99% of the stake of Jio. This will make Facebook abid by Jio rules and regulations.
Jio will benefit from Facebook technology and Facebook will get a lot of users base. This is the main reason according to my opinion. But let us see down the line after a few years, the benefits from this deal. As far as the current situation it is the major deal cracked by two giants for digitization improvement.
Also published on Medium.