Facebook on Wednesday buys a 10 per-cent stake in Reliance Jio industries for dollar 5.7 billion to advance its famous feature WhatsApp for digital payments. It is the largest minority shareholder in Jio Platforms limited.
The purpose is to collaborate Whatsapp with JioMart, a Reliance e-commerce ventures, to let people connect with small business.
This deal comes at a time when digital payment service in India is to be rolled out by Facebook-owned WhatsApp after securing the approval according to media reports, to contend with the likes of Google Pay and Paytm.
Whatsapp is a huge market with 400 million users in India, reaching nearly 80 per-cent of smartphone users in the country. Mukesh Ambani, the billionaire, owner of Reliance Jio, the fast-growing telecom carrier, began its operations in late 2016.
There has been a report by Financial Times, last month, that social media giant- Facebook, was in talks for a 10% stake in Jio but the talks were stopped due to bans on traveling all over the world amid the coronavirus outbreak.
Indian people will have more commerce opportunities across the country after two companies will start working on major projects.
Mukesh Ambani, chairman and managing director of Reliance Industries said their partnership with the founder of Facebook, Mark Zuckerberg is committed that they both share the all-around digital transformation of India and to serve all Indians.
Zuckerberg also shared the same statement as of Ambani’s.
Facebook’s CEO, Zuckerberg said in a statement that the country is in the middle of a major digital transformation, and to bring hundreds of millions of Indian people and small business online organizations like Jio has played a big part.
He further said that during this global lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses.
In February, Facebook’s popular messenger app WhatsApp received formal approval from the National Payments Corporation of India for payment services in India. After the payment interface is combined with the Jio platform, it would rise as a serious challenge for e-commerce players like Amazon and Flipkart for their establishment, according to analysts.
In December, Reliance Retail Ltd soft-launched its new commerce venture, JioMart, calling it “Desh Ki Nayi Dukaan”.
This will help Reliance create a strong rival to online e-commerce giants such as Amazon and further strengthen its leadership position in retail in India,” said Axis Capital in its research report dated 22 April.