FB-Jio deal: What Mark Zuckerberg,Ambani has to say
NEW DELHI : Facebook will spend $5.7 billion for 10 per cent of Reliance Industries’ digital business, as the social media firm looks to leverage its popular WhatsApp messenger to offer digital payment services to small grocers in India.
India is in the middle of “major digital transformation” and Facebook is committed to “opening commerce opportunities for people across the country”, founder Mark Zuckerberg said this morning, a day after the social media giant invested $5.7 billion in Reliance Industries Ltd-owned mobile telecom company Reliance Jio.
Reliance Industries Ltd Chairman and Managing Director Mukesh Ambani on Wednesday confirmed Facebook’s massive $5.7 Billion 9.99% stake purchase in Jio Platforms and said that their partnership will help transform the digital ecosystem of India and will help support Prime Minister Narendra Modi’s ambition of Digital India Mission.
Jio said, “The partnership between Facebook and Jio is unprecedented in many ways. This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India.
Mr Zuckerberg (valued at $63.3 billion by business publication Forbes), also thanked Reliance Industries Chairman Mukesh Ambani (valued at $47.5 billion) for the partnership and said he was “looking forward to getting started”.
“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 organisations like Jio have played a big part in getting hundreds of millions of Indians, small businesses online,” he added.
In his message Mr Ambani stressed on the benefits of the Facebook-Jio tie-up for the nearly three crore kirana stores around the country that will now be “empowered and can create new employment opportunities with digital technology”.
The deal, which makes Facebook the largest minority shareholder in Jio, comes after the government approved WhatsApp’s digital payment service. The Facebook-owned platform is now set to compete with the likes of Google Pay and Paytm for a market that will be worth $135.2 billion in 2023, according to an Assocham-PWC India study.
WhatsApp has 400 million users in India, its biggest market, reaching nearly 80 per cent of smartphone users in the country.
For Reliance, whose debt pile swelled to more than $40 billion as of September, the partnership will bring in much needed funds to make good on its promise to cut net debt to zero by March 2021.
India’s online grocery market is lucrative but competitive, with Amazon.com’s Pantry jostling for market share with Walmart’s Flipkart and BigBasket, backed by China’s Alibaba.
But a lot of untapped value lies in India’s kirana stores, or small grocers, lifeblood of the country’s $375 billion grocery industry, according to data from the Retailers Association of India.
(Bureau Report with input from Reuters, ANI)
