Facebook has been topping the list of social media platform since more than a decade globally. It has
been seen as unbeatable platform to connect to the world and its people. In competition to the
emerging ByteDance as world’s second largest internet market, Facebook- an American social media
giant has found the way out to overthrow the cut throat competition.
It has announced to invest $5.7 billion for a 9.99% stake in India’s most valued telecom operator,
Reliance Jio Platforms which is a three-and-a-half-year-old subsidiary of the nation’s , Reliance
Industries, which has more than 370 million subscribers. The deal, which valued Jio at a pre-money
valuation of $65.95 billion, makes Facebook the largest minority shareholder in the Indian telecom
network. It ensures its commitment to India by focusing on collaboration with Jio in order to create
new ways for people and businesses to operate more effectively in the growing digital economy. This is
the largest investment for a minority stake by a technology company anywhere in the world and the
largest foreign direct investment in the technology space in India.
David Fischer, Chief Revenue Officer at Facebook, and Ajit Mohan, VP and Managing Director of
Facebook India believe that collaboration of JioMart, an e-commerce business that is a joint venture
between Jio and Reliance Retail which is nation’s largest retail chain and WhatsApp, which is the most
popular smartphone app in the nation and claims to have 400 million users in India. In addition to this,
Facebook claims on its website that its marquee service reaches about 350 million users in India.
“We can enable people to connect with businesses, shop and ultimately purchase products in a
seamless mobile experience,” as reported by Facebook.
Reliance Jio began its commercial operation in the late 2016, and took control of the local telecom
market by offering ample of 4G data and voice calls straight for six months to its users at no additional
charges. This led to a telco price war that ultimately forced local network providers to revise their data
plans and mobile tariffs; but Jio remained unmatchable as it set the benchmark of which the others
struggled to offer. This led to the emergence of the largest and top telecom operator in the country.
Facebook can earn benefits through clubbing up with Jio and its users which earlier attempted
and failed to expand its free internet initiative, Free Basics, in India. The company has since
expanded Express Wi-Fi to India — though its potential but the scale remains comparatively small.
Reliance Jio owns a stock of services including music streaming service JioSaavn, smartphones,
broadband business, on-demand live television service JioTV, and payments service JioPay.
Mark Zuckerberg, co-founder and chief executive of Facebook says, “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.”
Facebook is seen to take interest in Indian startups from the evidence of last year. It made
an investment in social commerce Meesho. Also, earlier this year, it wrote a check to edtech startup
Unacademy. Facebook is said to have invested around $15 million each in these two startups. The
reason for such huge investment can be tracked as the company states to be open to engaging with
startups that are building solutions for the Indian market for more investing opportunities.Though,
a multi-billion dollar investment was never predicted.
Facebook can bring out the most from this deal as Mukesh Ambani, who is India’s richest man is a close
ally of Indian Prime Minister Narendra Modi, and his firm has consistently supported policy proposals
from the ruling government. Since, as the past observations, Facebook has received more scrutiny than
ever in India in recent years under Modi’s government, it may prove out to be a good collaboration in
order to earn the interest of the central government of India.
In a video message, Ambani said, “At the core of our partnership is the commitment that Mark
Zuckerberg and I share for the all-around digital transformation of India and for serving all Indians.
Together, our two companies will accelerate India’s digital economy to empower you, enable you, and
to enrich you.”
“The synergy between Jio and Facebook will help realize 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,” he said in his statement.
Ambani added that JioMart and WhatsApp togetherwill enable 30 million neighborhood stores to
transact digitally in the future. To bring into notice, WhatsApp has been working with the Indian
government for more than two years to expand its payments service in India but couldn’ go far due to
The Indian market has been strictly controlled by a duopoly of Facebook and Google since years.
Reliance Jio has built consumer-facing services, but little did they compete against American giants’ core
offerings. But in recent years, ByteDance’s TikTok gained users engagement which was lacked by thesecompanies. TikTok has collected more than 250 million users in India as per the record of last year, and
the company is firm to gain another 100 million this year.
Jayanth Kolla, an analyst with Convergence Catalyst, said TikTok blindsided Facebook and reached users
that the American company hadn’t yet. Facebook has, predictably, attempted to build a similar service
called Lasso which has limited its testing in markets, excluding Indian markets.