What you need to know
- Facebook just became Jio's largest minority shareholder by shelling out $5.7 billion to acquire a 9.99% stake in Jio Platforms.
- Jio has transformed India's telecom market in the last four years, and now has 388 million subscribers.
- Facebook says the investment in Jio will allow the social network to 'open up commerce opportunities for people across India.'
- Ultimately, Facebook wants to bring Jio's small business platform to WhatsApp, enabling users to make purchases directly on the messaging service.
Facebook just made a major play in the telecom industry by investing $5.7 billion to pick up a 9.99% equity stake in India's Jio Platforms, a wholly-owned subsidiary of Reliance Jio. Jio fundamentally altered India's telecom industry in the last four year, and with 388 million subscribers, it is now the leading cellular network in the country.
At a first glance, it doesn't make much sense for Facebook to invest in Reliance, but the social networking giant has a clear strategy here: Facebook wants to bring JioMart — Jio's small business platform — to WhatsApp, enabling users to connect with businesses. With over 400 million users, India is WhatsApp's largest market by some margin, and Facebook is now looking to use that scale to turn the platform into an e-commerce destination.
Facebook has yet to figure out a monetization plan for WhatsApp, but an e-commerce play makes a lot of sense considering just how ubiquitous WhatsApp usage is in the country. By teaming up with JioMart, Facebook will be easily able to bring millions of small merchants to its messaging platform.
The press release from Reliance Jio indicates as much, with the company noting that WhatsApp users will be able to access local stores and buy products directly on the platform:
Facebook's press release also hints at a similar move:
It will be interesting to see how Facebook plans to roll out e-commerce transactions within WhatsApp, but the investment in Reliance ensures that it can count on millions of small businesses making their way to the platform.
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Harish Jonnalagadda is a Senior Editor overseeing Asia at Android Central. He leads the site's coverage of Chinese phone brands, contributing to reviews, features, and buying guides. He also writes about storage servers, audio products, and the semiconductor industry. Contact him on Twitter at @chunkynerd.