Facebook has recently purchased a 9.9% stake in Reliance Jio for a whopping 43,574 crore rupees. This investment by Facebook is the largest FDI in the technology sector in India. This investment by Facebook seconds India trustworthiness even at the time of the pandemic unlike China which is facing the heat.
Facebook has tried to pierce the Indian markets more than once via the Free Basics program and its cryptocurrency, Libra but was black-flagged by Indian regulatory authorities. Reliance, on the other hand, wants to connect all the Kirana Shops and bring them online so that they can cater to larger markets and utilize the powers of modern tools such as AI and Blockchain. Facebook's WhatsApp wants to enter into the field of digital payments and is pending approval from authorities and is expected to go live around July this year tentatively and with Reliance's backing, it is expected to make the cut this time.
This deal can be seen as a win-win situation for both parties. Reliance debt has decreased considerably whereas Facebook can now access Reliance's brand name and services. WhatsApp boasts more than 400 million users and this network will be leveraged by JioMart to offer consumers access to local Kirana Shops and WhatsApp Pay would be promoted as the preferred payment service amidst the entire transaction. All in all, this deal is expected to give PayTM, PhonePay, Google Pay, Groofers, Big Basket, Amazon Essentials and Flipkart daily a run for their money.