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  • Writer's pictureVejeps Ephi Kingsly

What does the Facebook, Jio deal mean for both?

We have all read the recent acquisition of 9.9% stakes of Reliance Jio by Facebook for $5.7Bn.

Mark and Mukesh are known to be patient and pragmatic businessmen.

This deal opens a plethora of solutions to their existing businesses and opens the door to the 1.35Bn people through many touchpoints.

Between Whatsapp's 400Mn and Jio's 355Mn users - Yes, for now, just considering these 2 businesses and keeping the remaining away.

What is in it for Reliance Jio?

Reliance has already set aside $15Bn earlier this year to enter the eCommerce space. With the already established Amazon, Flipkart(Walmart), it would need a strong push and a stronger infrastructure to reach the width and depth of the Indian users. Facebook's experience with the marketplace and platform like WhatsApp plays the perfect balance to augment its initial requisites.

JioMart recently announced to help 30Mn small businesses and kiranas with payment solutions through Whatsapp

JioMart will extend from cities to remote villages easily with Jio's existing and expanding telecommunication market. Adoption of Whatsapp would help the penetration of the eCommerce marketplace faster.

JioMart's adoption would also help in Jio expanding its userbase in top tier cities from other service providers.

"I had always expected Messenger and Marketplace to become a super-app similar to what WeChat is in China"

What is in it for Facebook?

Facebook acquired Whatsapp for $22Bn in 2014.

Whatsapp had to be monetized for it to make business sense for Facebook since it was also eventually encrypted for any data to be mined and used for advertising.

There were a few strategies like Whatsapp Business, but to make it a bigger business sense Whatsapp had to involve commerce and go b2c.

JioMart and Whatsapp put together would be a slingshot forward opportunity for Whatsapp to be monetized in commerce and also a marketplace if it directly turns out to be. This is a big bet, Facebook is taking.

With the partnership with Reliance Jio, facilitates the ease of doing business in India. This would be an equally big gain for Facebook.

While we have to wait and see the unfolding of this acquisition. It is exciting to see companies worth their valuations taking bigger strides in India.

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