Sunday, June 20

Reliance Jio-Facebook Partnership

Indian new commerce battle was never so cut-throat as it is now with the entry of JioMart with the partnership of Facebook. Facebook is a big giant in the social media industry with enormous users on Facebook, Instagram, and WhatsApp. Facebook announces $5.7 billion of investment in Reliance Jio, and the news had come upon a time when other e-commerce companies were facing difficulties to ramp up with the supply. The partnership would be a game-changer for India’s Kirana store and other MSMEs.

Jio_Facebook

It will be exciting to see how the dual combo would make use of 388 million Jio and around 328 million Facebook users to battle against Amazon and Walmart. However, small retailers can look for digital empowerment with a new commerce platform that can serve the neighborhood customers remotely with ease.

The country has seen some major digital transformations in recent times, such as in fields of telecommunication, OTT, and banking applications. Coming together of Jio with WhatsApp opens the avenue for newer services by integrating both to enter the payment platforms, which will change the commerce industry in the future.

India is home to 60 million MSMEs, 120 million farmers, and 30 million small merchants in the informal sector who are the core of the Indian economy. We can predict immense cost advantage to retailers by JioMart, which will facilitate them to pass on discounts and free of cost delivery services to their customers. At the same time, eliminate all the mid-levels to become one master distributor for all the brands.

Post lockdown, when people will still have the hangover of isolation, consumers will prefer to be online for purchases of the goods and services and avoid visiting offline retails. Retailers might be quick to accept the platforms to come online to sustain their businesses. Facebook, along with Instagram and WhatsApp, will act as an excellent platform to target both retailers and consumers correctly using the social media analytics and influence them with customized advertisements to get them onboarded on the JioMart platform.

We have seen previously in the telecom sector how Reliance Jio has been able to achieve the largest market share of 32.04% in just three years of starting its operations and disrupted the whole telecom industry such that other telecom providers had to enter into mergers to withstand Jio. The Reliance-Facebook partnership can stress the telecom sector who already is in debt of 7 lakh crore. Jio can persuade existing Airtel and Vodafone users to Jio platforms by providing bundle products and services with WhatsApp.

Though investment from abroad in the Indian economy is a good source for the economic development of the country but not when it may hurt the existing businesses and create a monopoly, it leads to unfair competition for other players, lesser wages to workers, an increase in prices of the products, and lower choices left with the consumer in the long term. It will be interesting to look forward to the government actions and Competition Commission of India (CCI) approvals over the partnership

References

https://www.livemint.com/companies/news/whatsapp-reliance-retail-ink-pact-to-boost-jiomart-11587527656396.html

https://www.livemint.com/industry/telecom/reliance-jio-is-the-largest-telco-in-india-trai-11579180602386.html

https://www.business-standard.com/article/companies/why-facebook-is-spending-billions-for-a-minority-stake-in-reliance-jio-120042201038_1.html

https://www.techcircle.in/2020/04/22/why-the-facebook-jio-combine-could-be-a-gamechanger-for-kiranas-micro-and-small-entrepreneurs

https://economictimes.indiatimes.com/blogs/et-editorials/the-reliance-jio-facebook-deal/

https://telecom.economictimes.indiatimes.com/news/jio-facebook-partnership-to-shake-up-indas-telecom-sector/75286131

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