With the Facebook-Reliance Jio deal being announced, Reliance Industries’ much anticipated ‘new commerce’ move may finally be set in motion. Apart from Facebook picking up a 9.9% stake in Reliance Jio for Rs 43,574 crore, Jio Platforms and Reliance Retail have entered into a commercial partnership with WhatsApp.
Reliance Retail set up JioMart a couple of months ago as its foray into the new commerce business to bring offline stores online. With the Facebook deal now, JioMart will leverage WhatsApp to bring crores of small grocery stores online.
India is the biggest market for WhatsApp with over 500 million users. This gives Jio immediate access to a massive customer base to offer its services to.
“In the very near future, JioMart – Jio’s digital new commerce platform, and WhatsApp – will empower nearly 3 crore small Indian Kirana shops to digitally transact with every customer in their neighbourhood. This means all of you can order and get faster delivery of day-to-day items, from nearby local shops. At the same time small Kiranas can grow their businesses and create new employment opportunities using digital technologies,” RIL chairman Mukesh Ambani said in a video message post the deal announcement.
The companies will work closely to ensure that consumers are able to access the nearest kiranas that can provide products and services to their homes by transacting with JioMart using WhatsApp, the company said in a statement.
#Reliance Jio's #JioMart and @Facebook will empower 3 crore small kirana stores to transact digitally, says Reliance Industries chairman Mukesh Ambani @thenewsminute pic.twitter.com/MlZy8uTlNf
— Shilpa S. Ranipeta (@Shilparanipeta) April 22, 2020
With WhatsApp’s massive user base and Jio’s 350 million+ subscriber base, JioMart will beat all existing grocery and e-commerce players to have access to the highest number of customers, a win-win for both companies.
Facebook too, through WhatsApp, will now be able to bolster its business in the country. It was already leveraging WhatsApp to bring businesses online through ‘WhatsApp Business’.
This was seen when Facebook invested in social commerce platform Meesho in June 2019. Meesho is an online marketplace that connects resellers, mostly homemakers, with customers through WhatsApp.
Facebook has also been trying to launch its UPI Payments service ‘WhatsApp Pay’ in India. All this will possibly see acceleration through a partnership with Jio.
“India is home to the largest communities on Facebook and WhatsApp, and a lot of talented entrepreneurs. The country is in the middle of a major digital transformation and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online,” Mark Zuckerberg said in a Facebook post on Wednesday.
#RelianceJio
— Aishwarya Paliwal (@AishPaliwal) April 22, 2020
Mark Zuckerberg's video on investing $5.7billion in India’s Jio Platforms. pic.twitter.com/9qtC9xiJvG
“This is especially important right now, because small businesses are the core of every economy and they need our support. India has more than 60 million small businesses and millions of people rely on them for jobs. With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses. This is something we can help with -- and that's why we're partnering with Jio to help people and businesses in India create new opportunities,” he added.
And it’s not just kirana stores that Jio is looking to target. Ambani said that the WhatsApp and Jio partnership will be extended to other areas also, including farmers, small and medium enterprises, students and teachers, healthcare providers, and women and youth.
This deal also now values Jio Platforms at Rs 4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of Rs 70 to a US Dollar).