Facebook is set to spend $5.7 billion to buy a 9.99% stake in Reliance Industries’ digital arm, as it looks to roll out services for India’s grocers and small businesses by capitalizing on WhatsApp’s extensive reach in the country.
The deal announced on Wednesday is Facebook’s biggest since its $22 billion buyout of WhatsApp in 2014 and will give the Menlo Park, California-based firm a stake in Jio Platforms – the digital services entity that houses Reliance’s telecoms arm Jio Infocomm, as well as its news, movie and music apps, along with other businesses.
The transaction is also the eighth largest deal in Asia this year based on deal value, according to Refinitiv data, and comes at a time when the coronavirus outbreak has stifled mergers and acquisitions activity globally.
„This investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country. In less than four years, Jio has brought more than 388 million people online, fueling the creation of innovative new enterprises and connecting people in new ways. We are committed to connecting more people in India together with Jio.”, according to the press release.
India is in the midst of one of the most dynamic social and economic transformations the world has ever seen, driven by the rapid adoption of digital technologies. In just the past five years, more than 560 million people in India have gained access to the internet.
„Our goal is to enable new opportunities for businesses of all sizes, but especially for the more than 60 million small businesses across India. They account for the majority of jobs in the country, and form the heart and soul of rural and urban communities alike.”, Facebook said.
One focus of the new partnership between Facebook and Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy. 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”.
“In the near future JioMart … and WhatsApp will empower nearly 30 million small Indian kirana (grocery) shops to digitally transact with every customer in their neighborhood,” Mukesh Ambani, Reliance chairman and Asia’s richest man, said in a video statement.
JioMart, the e-commerce venture of Reliance’s retail arm, offers customers free express grocery deliveries from neighborhood mum-and-pop stores. It is yet to be launched across India, and is likely to pose a formidable challenge to Amazon.com’s local unit and Walmart’s Flipkart, which are also betting big on groceries to grow.
The alliance with Jio could also help WhatsApp evolve into an Indian version of Chinese internet giant Tencent’s WeChat, which allows users to chat, make payments and book flights and hotels, a source with direct knowledge of the deal said to Reuters.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
