Facebook Invests in Jio Platforms - Market to be Rattled?

At the end of April, 2020 Facebook announced it will invest Rs 43,574 crore ($ 5.6 billion) in Jio Platforms Ltd for 9.9% stake. This transaction marks largest foreign direct investment for a minority investment in India. Check Facebook announcement on their official post. During Covid-19 pandemic and lockdown, Ambani backed RIL did a great job which could indirectly help India's economy. 

The deal indicates Mark Zuckerberg, the man behind Facebook wants a pie in the digital marketplace of India. Because on the official post, there is a picture saying about a 50 year old company who is using Facebook, Instagram and WhatsApp to reach new customers. 

For Facebook, Jio could be their protector in India, as Fb has regulatory issues back in 2016 with its Free Basics programs. Also Zuckerberg wants to enter e-commerce space, but Jeff Bezos owned Amazon holds lion's share in its domestic market. China could not be an option for Facebook where investment is tricky, competition with similar local offerings would be fierce, and state regulations are so strict and unethical at point. India is best option for Mark, as Indians are already heavily using his products - Fb, Insta and WApp. Known customers could give him better applause. 

Since Jio's inception, Mukesh Ambani, the owner of Reliance Industries and richest man in the country has made it clear - Jio is not a just another mobile service provider, Jio is a digital platform for new India. Since its commercial launch Jio has started offering an app based ecosystem (Jio Music/now JioSaavn, JioCinema, Jio TV, Jio Chat etc). But Jio needs money to sustain, sorry to be say that, and Ambani wants Jio to be debt-free in next 2-3 years. Investment from Facebook gives Jio enough money as well as technology. Ambani's next innings would be on e-retail business, while Reliance Retail is already largest one in India. India's e-retail or e-commerce market is dominated by Amazon and Walmart-backed Flipkart. To take on them Jio needs a suitable partner. There Facebook fits in with its ambition, investment amount and social media technology. 

Post investment by Facebook, Reliance Industries started integrating Facebook owned Whatsapp to its JioMart services to accelerate adoption. RIL introduced JioMart as grocery shopping app in December '19 with limited availability in Navi Mumbai, Thane and Kalyan. Whatsapp is targeting small business and digital payment segment and JioMart will be perfect for them. The Whatsapp no of Jiomart is 88500 08000. 

Update: JioMart has moved out of WhatApp, you can get it now on web only - on www.jiomart.com.

The posibilities are endless as Jio gets the social media king as investor. That's a win-win situation for them. Though I am not sure about consumers. Monopoly in telecom and control over media and internet - Reliance Industries can't be trusted always. They saved money in BWA auction in 2010, and we, end users are enjoying cheapest data from 2016.

Let's talk about few things. Simple thing is worldwide telecom majors are diverging their focus. Verizon (US) has its majority stake in former internet giants like AOL and Yahoo!. Back in 2005 I can remember Google, a search engine company wants to enter into software space and Microsoft, a software company wants to focus on its MSN search engine. So directions in business may change for a brighter future. 

• e-Commerce 

Reliance has a good presence in Indian retail market, and slowly expanding on online platform via Ajio.com but that's not enough. Facebook runs a (re)selling platform on its app - Marketplace, which runs like Olx model. 

So e-Commerce will be top most priority for both companies. Amazon and Alibaba would be main competitor to Facebook in India v2.0.

• Cryptocurrency and blockchain technology:

In August 2019, Ambani announced to create the world's largest blockchain networks in the world with tens of thousands of nodes.

Facebook has Libra under its hood - that's the blockchain based payment consortium. But Libra lags behind competitors like Paypal's Venmo and Square's Cash app in American market.

I cannot predict Libra will come to India or not, as Jio has its own plan. But yes it may be launched with Jio twists in a different name.

• New king of Digital Payment on making?

India has emerged as a critical market for Facebook (300 million users in India) and its WhatsApp messaging platform (400 million Indian users). Being an American company Facebook can not invest in Chinese companies, but they can do that in Indian company. India is a better investment for Facebook as here is huge population, already matured customer base, and no strict internet regulation like China's great firewall. 

Jio came up with Jio Money - India ka Naya Cash (www.jiomoney.com), as a wallet service. Later Jio acquired payments bank license, and started Jio Payments Bank with State Bank of India holds 30% of the venture. 

Merger of Jio's Payment Bank and wallet services, Jio Money and WhatsApp Pay is definitely on the cards, but they may target different audience so merger is not so sure.

WA Pay is in beta stage now, and has planned to go live by end of May in partnership with Axis Bank, HDFC Bank and ICICI Bank. SBI will also join later. The digital payment will be done on UPI platform via ICICI Bank. WhatsApp Pay will compete directly against Amazon Pay UPI, Google Pay, PhonePe, and Paytm.

Update: Jio will stop the Jio Money app, which was in beta stage for long time. Users will able to use its features via MyJio app from July 15th, 2020 under JioPay option. Cluttering down? I guess yes! 

• Digital Content: Facebook's Lasso vs China's TikTok

Lasso was launched in 2018 and til date it's available only in United States and in latin America. As Tiktok showed India has a huge potential for short video making app, Lasso can be introduced in India with Jio.

To remind, Buzz Video and Vigo Video (formerly Hypstar) is also owned China based Bytedance who owns Tiktok & merged Musical.ly with Tiktok in 2018. Bytedance also has similar app for China - Douyin. Singapore based Likee (formerly LIKE Video) is a direct competitor to them.

Personally I don't find these stuffs anything useful. But as users are getting money by creating whatever-shit content, I am happy to see the unemployment gets some help. 

My note: I am yet to see much development from the deal, however I keep my fingers crossed, as RIL wants a major disruption in ecommerce of India. 

Facebook's fucked up plan for India in 2016

Earlier Mark Zuckerberg tried his luck with India by partnering Anil Ambani owned Reliance Communications. He launched Free Basics program under his Internet.org initiative to bring affordable access to selected Internet services to less developed countries by increasing efficiency, and facilitating the development of new business models around the provision of Internet access. However whole thing landed upon major controversy, accused of violating Net Neutrality and TRAI banned it along with Airtel Zero, similar program from Bharti Airtel in 2016. 

In May, 2017 Facebook came back with fast, affordable and reliable internet connectivity under Express WiFi services in India. The platform, as Facebook describes it, that helps service providers build, operate, grow, and monetize internet access over Wi-Fi in a sustainable and scalable way.

Initially they has Airtel as main partner. Later AirJaldi in Uttarakhand, LMES in Rajasthan, Shaildhar in Meghalaya, i2e1, Netvision, Hinduja group backed One Broadband joined the group. Airtel left this project later on. The service is presently live in 30+ cities of India concentrating on Western India.

This platform for reselling of WiFi was interesting for social entrepreneurs like AirJaldi. But as 4G goes live in India and mass scale, it is definitely loosing its attraction just like Google backed Railtel's WiFi aka Google Station (Google is all set to leave the project in May, 2020). I doubt how many people is still using Facebook's Express WiFi these days.