Reliance Jio – Facebook join hands together: But can it save our economy?
Mark Zuckerberg’s Facebook has decided to partner with Mukesh Ambani’s Reliance Jio by buying 9.99% stakes in RIL owned company Jio. India’s business tycoon and Asia’s richest man, Mr. Mukesh Ambani shared a video announcing that Facebook will be investing $5.7 billion (which translates to Rs 43,574 crore INR) in Reliance Jio. Mr. Ambani believes this partnership will be a great catalyst to make India a world-leading digital society and to help the “Digital India” initiative. He promised that this partnership will empower people, generate employment which in turn will boost the dipping economy. Zuckerberg also shared a video message announcing the deal. He expressed that this partnership will help more and more people to get access to the internet which empowers people in many different ways.
What’s In It For Consumers?
This multi-billion dollar partnership will be a driving force to reliance’s ambitious JioMart project. JioMart is a digital e-commerce platform. It aims to empower more than 3 crores small Indian Kirana stores by providing them with a digital platform where they can transact with every customer in need. Fast delivery of day to day items from nearby shops will be the main aim. Mr. Ambani also claimed that in the future they will extend JioMart to support farmers in the country. He is quite optimistic about this deal and sees an ocean of opportunities. According to him, this partnership will help small entrepreneurs to start a business, generate employment, and in turn to boost the slowing down economy. If all these claims are true, then roughly around 60 million SME’s in India will avail the benefit.
What’s In It For Jio?
The deal falls in line with the company’s JioMart project. Social media platform like Whatsapp is an integral part of JioMArt project. Having a technology giant will help them to reach the level of penetration they want to achieve in Indian markets. This financial boost will also help to achieve “zero debt” status as early as in 2021. 5G is going to be a game-changer in the near future, it’s going to revolutionize the way we live. And this partnership was finalized on this bigger ambition of providing 5G to every smartphone user in India. With all major telecom service providers facing immense losses, Jio with support of Facebook can now advance swiftly in setting up the necessary infrastructure for providing 5G services.
What’s In It For Facebook?
This partnership will help the social media giant to expand even more aggressively in India. With 328 facebook users and 400m WhatsApp users, India is home to the largest communities around the world on these platforms. The number of people in India having access to the internet is growing at an unprecedented rate. In the last five years, more than 560 million users have gained access, thanks to Jio and its competitive pricing. Facebook is pushing for wider access to the internet all over the globe so that their services can be easily accessed by everyone. And with the invention of 5G, Facebook would be able to open a wide range of new features and products as the internet speed will no more be an issue. With this deal, Jio is likely to lead the race for offering 5G services to its customers and hence benefitting Facebook’s future goals.
Who All Will Be Worried?
All telecom giants in India like Vodafone, Idea, and airtel will be looking at this deal very closely. Since the day JIO entered into the market, profits have plummeted for all other competitors. Market shares have shrunk significantly and now they have enormous debts waiting to be repaid. With Jio getting this new humungous support of 43000 crores, all the competitors will surely be worried.
The others who will be equally worried are amazon and all other e-commerce platforms. JioMart is a direct competitor to them and this partnership will provide the impetus to Jio that it was in dire need of.
Can this upturn the economy?
When any country is dealing with a long and tedious nationwide lockdown, people are bound to lose jobs. In the case of India, it gets even more devastating because most of the employment comes from the informal sector. The deal surely looks promising for both Facebook and Jio. It is going to facilitate Jio’s entry into e-commerce. It can’t single-handedly upturn the economy. But this combined with all other measures taken by the government has the potential to kickstart the slowing economy