Facebook’s is known for its unparallel reach all across the globe. This is not just recent but Facebook has been enjoying high levels of popularity close to a decade now, since its inception in 2006. However, with recent competitors like TikTok from ByteDance, facebook’s unparallel territory was being threatened with the massive growth surge for other services, TikTok being one of the biggest. For a matter of fact, ByteDance’s is the second-largest competitor after Facebook.
With new challenges and hurdles cropping up on FB’s way, the American giant has now has found its way to incorporate in a better way in India. In a very recent announcement by the social media company, it said to have invested a net capital of $5.7 billion for 9/99% stake in India’s Reliance Jio Platform. Reliance Jio is a subsidiary of Reliance Industries and is three-and-half-years old at present. Not only this, but it is also the biggest telecom operator here in India. The nation’s most valued firm deals with more than 370 million subscribers currently.
This deal puts Jio at a valuation of $65.95 billion on a pre-money basis. Facebook is now the largest minority stakeholder in this Indian telecom market. This is by far the largest investment for a minority stake by a tech company globally; also being the largest Foreign Direct Investment (FDI) in the technology sector in India.
The venture could see a lot of collaborations spring up in the coming days, especially the one on the cards would be Jio Mart (an e-commerce JV between Reliance Digital and Jio) which is the nations largest retail chain along with WhatsApp. India is counted as one of the biggest markets of WhatsApp as well as one of the most popular smartphone app. This essentially means that with Jio Mart and Whatsapp, they can connect with several businesses, big and small and provide product purchase experience in a seamless mobile-only experience.
Reliance Jio started its commercial rollout of 4G data around the second half of 2016 and took the local market by storm with its on-paper free services like calling, data and SMS. This also kickstarted a price war with the local telecom companies which eventually forced out a lot of competition with its sheer presence and unmatchable prices. Reliance Jio stayed true to their words and have been providing a great experience to its users with minimum costs and lots of free services in India where the market is nothing but price-sensitive, leading Jio to become the top telecom providers in India.
Reliance Jio also offers services like Saavn (music streaming platform), JioTV and payment services like JioPay.
With the recent turn of events, Facebook co-founder and chief executive Mark Zuckerberg said in a post “ We’re making a financial investment and more than that, we’re committing to working together on some major projects that will open up commercial opportunities for people across India”.
Facebook’s investment is not only restricted to Reliance Jio but also a social commerce platform Meesho and Unacademy where it wrote a cheque of $15 million each to these startups earlier this year.
In a video message, Mukesh Ambani, Chairman and MD of Reliance Industries said that “ At the core of our partnership is the commitment that Mark Zuckerberg and I share for the all-around digital transformation of India and for serving all Indians. Together, our two companies will accelerate India’s digital economy to empower you, enable you and enrich you.”
Mr Ambani also added that fact that JioMart and Whatsapp will enable 30 million neighbourhood stores (also known as Kirana stores in India) to be able to transact digitally. WhatsApp has been working with the Indian government to enable digital payments services in India which is still at large due to certain regulatory issues.
With TikTok’s blindsiding of Facebook, this move comes as a huge upper hand both in terms of reach and business for both the companies and together we can assume to witness some very interesting services being rolled out in the years to come.