India’s Reliance Industries receives a friend request from Facebook

Reliance Industries digital business
FILE PHOTO: A woman checks her mobile phone as she walks past a mobile store of Reliance Industries' Jio telecoms unit, in Mumbai, India. REUTERS/Shailesh Andrade

Facebook is buying a 9.99% stake in Reliance Industries’ subsidiary Jio Platforms for Rs 43,574 crore or $5.7 billion to create new opportunities for businesses, especially over 60 million small businesses across India. 
Reliance Industries Limited (RIL) termed the deal “unprecedented”, claiming that the investment by Facebook is the largest investment for a minority stake by any technology company globally. 

A lot of untapped value also lies in India’s kirana stores, or small grocers, lifeblood of the country’s $375 billion grocery industry, according to data from the Retailers Association of India.

Mukesh Ambani-led RIL had last year restructured its digital business into one consolidated wholly-owned subsidiary – Jio Platforms – which houses all digital initiatives, including applications, tech initiatives, and connectivity services like mobile and broadband. 

RIL, however, said that its telecom venture Reliance Jio will continue to remain a wholly-owned subsidiary of Reliance Platforms even after the Facebook deal.

Analysts are of the view that Facebook’s investment into Jio Platforms will further boost RIL’s digital initiatives. The aim is to create new digital ecosystems through this partnership leveraging their existing platforms and Jio’s 4G network.

 “…our partnership will be a great catalyst to make India the world’s leading Digital Society. The combined power of Jio’s world-class digital connectivity platform and Facebook’s intimate relationship with the Indian people, will offer innovative new solutions to each one of you,” RIL chairman and MD Mukesh D Ambani, in a video message.

Mark Zuckerberg, chairman and CEO of Facebook, in a social media post, said that both Facebook and Reliance Industries will work together on some major projects that will open up commerce opportunities for people across India.

The partnership has already started taking shape with Jio Platforms, RIL-owned Reliance Retail, and Facebook-owned WhatsApp joining forces to accelerate Reliance Retail’s new commerce business on the JioMart platform using WhatsApp.

It is noteworthy that Jio already has its own WhatsApp rival Jio Chat, which hasn’t been able to take off due to WhatsApp reach in the country. WhatsApp has 400 million users in India.

US-based brokerage Bernstein, in a note, said that Facebook already offers WhatsApp as a social commerce tool in India to allow brands and retails to reach out to customers and the new partnership can strengthen offering both for 60 million small merchants on JioMart but also for Reliance Jio.
As per media reports, both RIL and Facebook will now work on creating a multipurpose app, similar to Chinese super-app WeChat.

“The investment in Jio is one of the biggest investments FB can make. The transaction fits with their recent push to build themselves and experiment more and provides a closed network of 388M users to test on, proof point around the already announced partnership to build and test a WeChat like app,”  Bernstein said.

Related article.

Be the first to comment

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.