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Mark Zuckerberg invests in Mukesh Ambani’s dream of Digital India

On 22nd April 2020, Facebook Inc. announced an investment of USD 5.7 billion (Rs 43,574 crore). This translates to almost a 10% stake in Mukesh Ambani’s telecom arm JIO Platforms Ltd. 

The first question that would come to one’s mind is ‘Why!?’ 

To answer that let’s understand JIO Platforms Ltd. JIO Soft launched publicly on 5 September 2016. With an aggressive pricing structure, humongous retail and supply network, by 31st December 2019, it became the largest mobile network in India and the third largest mobile network operator in the world. It is also the fourth largest provider of fixed telephony in India. In Feb 2016, JIO also announced a global alliance of Mobile Network Operators with

  • BT Group 
  • Deutsche Telekom 
  • Millicom 
  • Orange S.A. 
  • Rogers Communications 
  • MTS 
  • Telia Company 
  • Telecom Italia

A virtual who’s who of the mobile network vertical. This cemented the strengths and growth focus of JIO Telecom not only in India, but internationally as well.  The objective of Reliance JIO was simple, get all Indians on to the digital world. 

On the other side Facebook Inc. has been a game changer in the Social Media world, since its launch in the year 2004. 16 years down the line, Facebook today boasts of 2.50 billion monthly active users. Being into social media services, Facebook was practical in adding more services to its social media offering. It acquired big ones like Instagram and Whatsapp in the years 2012 and 2014 respectively. It was a three-pronged approach to gather as many users as possible under its wings. But users were dwindling in its home country.  As per a report from Sensor Tower, Facebook’s downloads declined 15%, while Instagram’s downloads dropped 9% by the third quarter of 2019.  Though users were growing, most of the growth was coming from overseas.

 Following are some data points: 

Region

Monthly Active users 
(Q2 2019)

Year-over-year growth

US and Canada

244 million

1%

Europe

385 million

2%

Asia-Pacific

1.003 billion

12%

Rest of World

782 million

8%

Add to the above figures, Facebook inc. has been facing multiple privacy lawsuits which further dented its reputation. 

But come Corona or not, the show must go on. 

Facebook required to look outside the US to keep itself relevant and grow. The obvious next destination was India. 

There are around 378.9 million Facebook users in India. Expected to increase to 444.2 million by 2023 a whopping 17.23% increase in just three years. (https://www.statista.com/). Additionally, Whatsapp has 400 million users and Instagram 80 million users with majority in the age group of 18 to 24. 

These figures are extremely interesting. But if you consider the potential, they are obviously mouth-watering for ambitious businessmen like Zuckerberg and Ambani.  

Currently the whole world is fighting the Covid-19 pandemic. But once control is established on its spread and lockdowns are relaxed, businesses will need to jump back into immediate action. Currently they are facing an impending economic slowdown. A lot of thought will go into optimization across the board by organisations. Work from Home will no more be considered a perk, but a tool to improve the bottom and top lines.  Obviously, the post Covid world is going to be enormously digital, and dependant on analytics to sail through the storms that are anticipated.

In such times, there could be no better partnership than JIO and Facebook. With 388 million users on JIO network, and growing, it generates a huge potential for Facebook Inc. At the same time, the stake sale creates opportunities for JIO’s offerings like JIO Mart, a service which offers to take the small merchants and kirana stores to possibly every door step in India, or at least 388 million users. How does JIO plan to do this- by making the most of the Whatsapp platform; an acquisition of Facebook Inc. 

On an ending note- Indians sent the largest number of Happy new year messages in the world, imagine the amount of data points it can create for Facebook and business potential for JIO Telecom. Surely a win-win for both.

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