Food
Facebook has committed to a multi-billion investment in Mukesh Ambani’s Reliance Industries, ensuring that Facebook has an increased presence in India at a time when digital technology is booming. That investment takes the form of a US$5.7 billion outlay by Facebook to acquire a 9.99% stake in Jio Platforms, the digital technology branch of Reliance.
This will give Mark Zuckerberg’s company access to Reliance Jio, the network that commands around 57% of the Indian broadband market, while providing a stronger platform to launch a new WhatsApp payment venture in a country where around 400 million people use the messaging service.
This gives Facebook a foothold in India at a time when government regulations are making foreign investment increasingly difficult. This deal also benefits Reliance; Ambani may be India’s richest person, but the Facebook investment will deliver vital capital in his quest to eliminate all debt by March 2021.
Amazon and Walmart have both cornered a significant share of India’s e-commerce trade, while Netflix committed to a $400 million investment on Indian content in 2019 and 2020. These companies have altered the retail and streaming landscapes respectively, with Facebook’s partnership with Reliance Industries likely to have a similar effect on technology and finance in India.
https://www.facebook.com/Jio/posts/1949554658502959
Financial digitization is something that the Indian government has striven for in recent years. One objective of the 2016 banknote demonetization was to reduce the prevalence of cash payments, although this strategy was poorly executed and poorly received. Facebook’s ability to integrate seamlessly into everyday consumer life may prove more successful than the government-driven push for digitization.
Ambani has stated his intention for his commerce platform Jio Mart to combine with WhatsApp technology in order to assist with digital transactions for ‘mom and pop’ stores. The Reliance owner spoke of a desire to connect with 30 million of these shops to give them a platform to better cater to their clientele. Combining Facebook tech with the established interface of Jio will help small vendors to set up online stores with minimal fuss to facilitate deliveries and increase trade.
A corollary of digital payments becoming commonplace will be that an even larger proportion of the population will feel comfortable with using technology for financial purposes. This could manifest in a greater acceptance for a digital coin in India; this is something that the National Institute for Smart Government (NISG) proposed at the start of 2020, with a digital rupee driven by blockchain tech more likely to be accepted by consumers familiar with virtual payments.
Online trading could also benefit alongside cryptocurrencies. Digitized payments destroy the notion that transactions have to incorporate money changing hands, illustrating the appeal of online foreign exchange platforms where users can purchase and sell currencies at the click of a button. With many of the best forex bonuses geared towards beginners, an indirect result of Facebook’s investment could be inspiring a new wave of traders to further explore the links between finance and technology.
With a population of 1.38 billion, India is a massive market that warrants significant investments from global brands. Over 1 billion of those people own a mobile device, while around 615 million people have access to broadband. India boasts the lowest mobile data costs in the world; 1GB of mobile data can be purchased for just $0.26, whereas the same acquisition can cost over $12 in the United States.
Consultancy firm PwC estimates that there may be 800 million internet users in India by 2022, so Facebook are gaining access to the market at a timely moment. Facebook will not just be collaborating with Jio to take advantage of low data costs and high internet access, but the two will also seek to expand and enhance the ways that the country is connected.
In a Facebook post, Zuckerberg stated his intention to deliver reliable digital tools to help India’s 60 million small business provide for their customers. Digital payments may become more popular thanks to the WhatsApp Pay service, while Facebook’s involvement will support the vast tech services that Jio is already providing.
