Facebook-Reliance Jio deal: Here’s what the collaboration could mean for India

Update: 2020-04-22 16:12 GMT

Facebook and Reliance Industries announced that the American social networking tech giant will invest a sum of Rs 43,574 crore to pick a 9.99 per cent stake in Jio Platforms. Jio is Reliance Industries’ wholly-owned subsidiary firm which works on digital ecosystems, digital applications and is a popular mobile service. The investment by Mark Zuckerberg-led Facebook and put the value of Jio Platforms at Rs 6.62 lakh crore.

Why is Mark Zuckerberg-led Facebook investing in Jio Platforms, an Indian internet service provider?

As a social networking platform and a technology firm, Facebook has been trying to dominate the internet and entail partnership with internet service providers. In India, Jio platforms was launched with data rates at an all-time low, which led to it becoming a standard in one of the largest online markets across the world.

As reported by The Indian Express, Jio has helped in bringing together as many as 388 million users online. The figure is well over a third of what Facebook desired for. This is one major reason why Jio Platforms is interesting as a partner for the biggest social network in the world.

Facebook investing in Jio Platforms is not about Facebook itself, but more about WhatsApp. Facebook acquired WhatsApp in the year 2014. In fact, 20 percent of WhatsApp’s two billion users are from India. The growth of this messaging app has coincided with Jio’s growth. These two platforms have a huge overlapping user base. To several Indians, internet usage is still limited to Facebook, WhatsApp and YouTube.

What does Facebook-Jio collaboration entail?

As of now, the only announcement is that Facebook and Jio will collaborate around JioMart. JioMart is Jio’s e-tailing business section. Jio may access the location data for curating local businesses, while WhatsApp will enable easy access for several stores in the country. The hurdle-free connection will allow easy orders between traders and customers.

The only issue is that WhatsApp has not been cleared by the Indian regulators. WhatsApp’s payment feature makes it an ideal deal for India as it will allow users to pay from one WhatsApp account to another by using the UPI backend. Once this is done, users will be able to even pay for groceries from a vendor, by paying on WhatsApp.

Related News: Facebook picks up 10% stake in Jio Platform for ₹43,574 crore

Mark Zuckerberg expects that WhatsApp Pay will be live in India in six more months. So till then, the collaboration could be done by JioMoney. Even then, the small traders will get an easy chance to connect with customers and to sell online by a platform they understand.

What does Reliance Jio gain from a deal with Facebook?

For Reliance Jio, the deal could mean that users will stay within the products for most of the online time. This will let it emerge as a destination and not just one medium. Jio will also get to empower millions of small businesses for entering the e-commerce market, without a website or a payment gateway. They will only need a business app or WhatsApp for reaching out to customers directly

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