- Facebook buys 9.99% stake in Reliance's Jio
- Partnership focused on small businesses in digital economy
- WhatsApp (400 million users in India) and will be integrated with JioMart
Facebook is investing $5.7 billion in Jio Platforms, the digital services arm of India's largest private sector company, Reliance Industries. It gives the U.S. tech giant a 9.99% stake and a chance to promote the usage of its apps in Jio's 388 million wireless subscribers. Shares in Reliance were up 10% today in India.
The companies say the focus of their collaboration will be empowering India's small businesses in the digital economy. An example of this is JioMart, the grocery delivery platform that connects local shops with customers, will integrate with WhatsApp to form a seamless mobile experience.
Many will recall Facebook's last big strategy in India (also with Reliance) was a disaster. In 2015, the company wanted to bring Indians online for free with a program called Free Basics. After a huge promotional campaign, it was rejected for violating the tenets of net neutrality. Now it's teaming up with the country's largest telecom operator once again with a different approach. WhatsApp has over 400 million monthly active users in India, its biggest market. In January, a Wall Street Journal report said Facebook had backed away from efforts to sell ads on the app and is focusing on building out money-making features allowing businesses to communicate with customers and better manage those interactions.
"India is a special country for us. Over the years, Facebook has invested in India to connect people and help businesses launch and grow. WhatsApp is so ingrained in Indian life that it has become a commonly used verb across many Indian languages and dialects. Facebook brings together friends and families, but moreover, it’s one of the country’s biggest enablers of growth for small businesses. And Instagram has grown dramatically in India in recent years as the place where people follow their interests and passions," said Facebook on its blog.
"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," said Mukesh Ambani, Chair and Managing Director, Reliance Industries. Ambani, 63, is India's richest man with a net worth of $49.1 billion, according to Forbes. He added, "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."