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Reliance Jio-Facebook deal: Reliance Retail to get a boost

Facebook, for $5.7 billion (Rs 43,574 crore), has bought a 9.9 percent stake in Reliance Jio - the telecom unit of Reliance Industries.

April 22, 2020 / 12:44 PM IST
Mukesh Ambani (Image: Reuters)

Mukesh Ambani (Image: Reuters)

With social media giant Facebook picking up a stake in Reliance Jio, the subsidiaries of parent Reliance Industries Ltd (RIL) such as Reliance Retail will get a boost through this deal.

Facebook, for $5.7 billion (Rs 43,574 crore), has bought a 9.9 percent stake in Reliance Jio - the telecom unit of Reliance Industries.

Analysts and telecom experts have said Facebook and Reliance Jio both have a large customer base in India, which will be beneficial for Reliance’s retail business.

Some experts have also said that Facebook and Jio may create an app where - apart from communication - users will be able to buy groceries through Reliance Retail stores, or shop at, or make payments using JioMoney.

In less than four years, Jio has brought more than 388 million people online while Facebook has more users in India than any other country.


Its WhatsApp chat service, which has attracted 340 million users and is about to launch a key payments service, will take on incumbents Paytm, Google Pay, PhonePe and Amazon Pay.

Facebook, which owns WhatsApp and Instagram, will get a significant footing with this deal.

Commenting on the deal, RIL has said 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. The investment values Jio Platforms amongst the top 5 listed companies in India by market capitalization, within just three and a half years of launch of commercial services, it said in a statement.

Concurrent with the investment, Jio Platforms, Reliance Retail and Facebook's WhatsApp service have also entered into a commercial partnership agreement to further accelerate Reliance Retail’s new commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp, RIL said.

RIL is also the largest retail player in India thanks to a series of aggressive expansionary moves into consumer-facing businesses such as e-commerce and grocery.

The partnership will allow consumers to place orders through Facebook and WhatsApp. The orders will get fulfilled by Jio’s network of small kiranas and wholesale businesses.

Further discovery can also be solved by this partnership, where nearest kiranas can be marked out on the maps, orders placed online and products delivered home.

Even on the small business side, Reliance can bring in its wholesale to retail connections and WhatsApp can leverage its reach.

“Our focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in the informal sector,” said Jio in a note shared with the press.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd

Catch our entire coverage on the Facebook-Jio deal here..
Himadri Buch
first published: Apr 22, 2020 08:24 am

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