Facebook’s biggest investment since its takeover of WhatsApp could empower new combatants in the e-commerce war raging between Amazon & Walmart’s Flipkart.
Facebook’s Rs 43,574 crore investment in a unit of India’s Reliance Industries Ltd. creates an e-commerce leviathan to take on Amazon and Walmart in one of the world’s most competitive internet arenas, translating into a 9.99% stake in the Indian economic combination.
This is the largest investment for a minority stake by a tech company anywhere in the world. The tech giant said the investment marks its “commitment to India.”
Jio’s focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in the informal sector, in addition to empowering people seeking various digital services.
Concurrent with the investment, Jio Platforms, Reliance Retail, and WhatsApp have also entered into a commercial partnership agreement to further accelerate Reliance Retail’s New Commerce business on the JioMart platform using WhatsApp and to support.
“We’re also committing to work together on some critical projects that we think are going to open up a lot of opportunities for commerce in India,” Zuckerberg said in a video posted on his social media platform. “With a lot of communities around the world in lockdown, it’s even more important now than ever that people have the tools to connect with each other and that businesses can find ways to operate online.”
In short, it is a win-win deal for both players. While its social media services and messaging services have been extremely popular in India, Facebook has however struggled to get past regulatory concerns in India over some of its ambitious projects such as its free limited Internet offering Free Basics and digital currency Libra. While it stays blocked in mainland China, Facebook now gets to participate in a stronger way in one of the world’s fastest growing markets for e-commerce.
Sometimes, it has a high possibility to expect Jio to try to use the WhatsApp relationship to try to convert Bharti and Vodafone-Idea customers to use their network. We see this as a negative development for both Bharti and Vodafone Idea.