India will have its own WeChat like 'Super App'

Reliance Industries and Facebook working to create a Super App

One of the wealthiest Indians is joining hands with one of the richest persons in the world. As per the ET report, Mukesh Ambani’s Reliance Industries and Zuckerberg’s Facebook are exploring the possibility of creating a super app, just like the Chinese super-app WeChat. The super app will be leveraging the already existing Facebook-owned WhatsApp platform and user base. The super app will come with various features like digital payments, social media, gaming, among others. The users will also have the option of flight and hotel booking in this app.



According to the report, Reliance Industries is keen to create an app where, apart from communication, the users can do online shopping at the Reliance retail stores. Users can also make digital payments by using JioMoney on the super app. The idea is to offer an app that will be a one-stop solution for multiple things.



The discussion on the app and the commercial due diligence for the project is currently on. The report says that Morgan Stanley has been appointed the investment banker for this project.

How this deal will shape up and how the final structure would look like is still not clear.

However, both Facebook and Reliance have hired top consultants and Lawyers in the US to explore all the aspects, including taxation and legal issues.


Once the negotiations are over, then only, it will be clear how the two companies are going to collaborate in this project.

Reliance & Facebook Collaboration

Whether the two conglomerates will create a new company where both the players will have an equal stake, or it would be Facebook investing in Reliance Jio and Reliance Retail. Last month it was reported in Financial Times that Facebook is planning to buy a 10% stake in Reliance Jio for “billions of dollars.”


Because of the coronavirus pandemic, the discussions are going on slowly as there is no movement within the countries. It may take some time for unfolding the final deal.

Financial Times report in March states that Facebook is planning to buy a 10% stake in Reliance Jio for “billions of dollars.”

Because of the coronavirus pandemic, the discussions are going on slowly between the two giants. Since there is no movement it may take some time for the deal to unfold.



In India, Reliance Retail is focusing on e-commerce during lockdown 2.0. Reliance with other retailers are planning to expand their online services when the restrictions are eased from April 21. Besides, Reliance Retail is also scaling up its lifestyle app Ajio.com. During lockdown exemptions, company is anticipating some good business through its online Reliance Digital e-store,

Facebook Buys 9.9% Stake in Reliance Jio for Rs 43,574 Crore

The largest Social media platforms in the world, Facebook, has picked up a 9.99% stake in Mukesh Ambani's Jio platform. Mark Zuckerberg's Facebook is spending Rs. 43,574 crore ($5.7 billion) to buy this stake. The valuation of the Jio platform now stands at over $65.95 billion (around 4.62 Lac Crore). It is not only the largest Foreign Direct Investment (FDI) in the technology sector but also the largest FDI for a minority investment in India.


"There's a lot going on in the world right now, but I wanted to share an update on our work in India. Facebook is teaming up with Jio Platforms -- we're making a financial investment, and more than that, we're committing to work together on some major projects that will open up commerce opportunities for people across India," Said Mark Zuckerberg.

Source: Facebook post of Mark Zuckerberg

He further added that India is home to the largest communities on Facebook and WhatsApp, and a lot of talented entrepreneurs. The country is in the middle of a major digital transformation, and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online.

Key Takeaways from This Investment

Reliance Jio is a wholesome subsidiary of Mukesh Ambani's Reliance Industries Ltd. The Jio network has substantially grown within just four years of its launch. Today, Jio has more than 388 million customers in India.


Under the Jio Platforms, the online groceries delivery platform JioMart will get the maximum benefit out of this investment.


For Reliance Jio

The deal with Facebook will give impetus to RIL's goal to cut net debt to zero by March 2021. Also, Facebook's popular platform WhatsApp, will help JioMart to bring local vendors, independent hawkers, and small Kirana stores online. 
The JioMart works on the model to connect consumers with the local vendors and small Kirana businesses. After the deal, the local Grocery stores or vendors can register on JioMart, the online grocery delivery platform. They would receive orders from the consumers through WhatsApp. This will be a big step in helping the already struggling local vendors to survive.

All of us at Reliance are humbled by the opportunity to welcome Facebook as our long-term partner in continuing to grow and transform the digital ecosystem of India for the benefit of all Indians.

The synergy between Jio and Facebook will help realise Prime Minister Shri Narendra Modi's 'Digital India' Mission with its two ambitious goals — 'Ease of Living' and 'Ease of Doing Business' – for every single category of Indian people without exception. In the post-Corona era, I am confident of India's economic recovery and resurgence in the shortest period of time. The partnership will surely make an important contribution to this transformation- said Mukesh Ambani

For Facebook:

After this deal, Facebook becomes the largest minority shareholder in Reliance Jio. Further, Facebook will get access to Reliance Jio's 388 million customers.
India has always been a valuable market for Facebook. It tops the list of users for Facebook. Its WhatsApp chat service, which is about to launch a payments service, has attracted 340 million users.

Conclusion

This deal is expected to play a crucial role in the post COVID-19 Indian economy. The partnership of these two giants is believed to garner opportunities for 60 million small businesses across India. Further, it will be a crucial step to grow the digital economy of the country.