Facebook CEO Mark Zuckerberg on Wednesday announced a hefty investment of $5.7 billion in Reliance Jio, which, with its over 370 million users is India’s largest mobile network operator. The telco is a subsidiary of Reliance Industries, headquartered in Mumbai and led by Asia’s richest businessman Mukesh Ambani.
In a video message, Zuckerberg revealed that Facebook now owns a 9.99 percent stake in Jio, making the US-based company the largest minority stakeholder in the Indian company.
The aim of the investment, according to Zuckerberg, is to empower India’s small businesses and create more avenues for small and medium enterprises in the country.
“We are committing to work together on some critical projects that we think are going to open up a lot of opportunities for commerce in India. India is in the middle of a major digital transformation led by organisations like Jio – that over the last four years have worked to get hundreds of millions of Indian on to the internet. That’s a big deal. When people get access to the internet tools, they are empowered to do a whole lot of things", the Facebook CEO said.
Reliance head Ambani also said that the deal would further accelerate India’s digital economy. The 63-year-old Indian business tycoon cited the example of Jio’s recently launched online marketplace JioMart, which along with Facebook’s messaging app WhatsApp aims to enable 30 million local grocery vendors to adopt digital transaction methods.
According to industry expert Thomas George, this is a “win-win” deal for both companies.
“Facebook’s WhatsApp can help Reliance retailers seize this opportunity and connect with customers quicker via digital means. Also, Reliance had promised its stakeholders to be debt-free by 2021. This investment from Facebook will surely add and help. And for Facebook, this partnership can create a bigger digital platform delivering variety of services to the Indian population. We have seen Amazon was already making strides to partner with kiranas (groceries) and this will give them the much-needed succour", CyberMedia Research President George told Sputnik.
The news has influenced many Indians who are taking to Twitter to share their observations on the development.
A section of netizens also noted this partnership could help JioMart to compete with other thriving e-commerce platforms in the country including Amazon and Walmart-owned Flipkart.
"In the post-COVID-19 era, comprehensive digitalisation will be an absolute necessity for revitalisation of the Indian economy", Reliance Industries added in a comment on the deal.
However, some netizens expressed concern over the risks of data security regarding the deal given that Facebook has been surrounded by data breach scandals since 2018 when the Cambridge Analytica scandal came to light.