Facebook has made one of the biggest deals of the year in India by investing $5.7 billion into Jio Platforms, the tech subsidiary of multinational conglomerate Reliance Industries. Jio offers broadband, mobile services and online commerce platforms and Facebook’s buy-in means that the social media site now owns 10 percent stakes in the company, making it the largest minority shareholder.
India has the largest WhatsApp user base in the world and most of Facebook’s revenue from the country comes from the messaging app used by more than 400 million Indians.
In a blog post bylined by chief revenue officer David Fischer and VP for India Ajit Mohan, the company says one of the goals of its investment is to tap into opportunities for small businesses, noting that “WhatsApp is so ingrained in Indian life that it has become a commonly used verb across many Indian languages and dialects.”
Source: The Verge
“One focus of our collaboration with Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy,” Fischer and Mohan write. “For instance, by bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience.”
According to India’s Economic Times, Facebook and Reliance have big plans of introducing a WeChat-style “super-app” for India by leveraging WhatsApp and Jio services. In China, Tencent’s WeChat has been a success with more than one billion people using it for payments, communication and promotions.
Jio and WhatsApp pose a threat to each other as the former dominated the market by providing heavily discounted 4G plans before the competitors. The company has “brought more than 388 million people online,” according to Facebook’s blog post. Facebook’s efforts of providing internet access to Indians have proved to be useless because the ill-conceived Free Basics program was ultimately banned for violating net neutrality.
“We are excited about furthering our investment in India’s vibrant digital economy,” Fischer and Mohan write. “Our efforts with Jio will be focused on opening new doors and fueling India’s economic growth and the prosperity of its people. We look forward to working with Jio, and to future collaborations in India to advance this vision.”