In a new development, Facebook has invested a whopping $5.7 billion (Rs 43,574 crore) in Jio Platforms, part of Reliance Industries Limited for a minority stake of 9.9%. The Jio deal also happens to be the largest FDI in the technology sector in India and also the largest investment for a minority stake by a tech company anywhere in the world.
One focus of this investment is to create new ways for people and businesses to operate more effectively in the growing digital economy. Facebook CEO Mark Zuckerberg said, "We're committing to work together on some major projects that will open up commerce opportunities for people across India."
Now, this is a considerable development with wide-ranging impact, considering the fact that with over 560 million Internet users today, India is the second-largest connected economy in the world, only after China. By 2021, there will be over 600 million internet users in India.
Despite being home to the large base of internet users in the world, 66% of the Indian population was unable to access the Internet until 2017 and Jio has played a big part in getting those hundreds of millions of people and small businesses online. Within less than four years time, Reliance Jio has brought more than 388 million people across India online, giving a massive boost to the digital ecosystem.
India is also a hub of more than 60 million small business, contributing significantly to the economy by providing last-mile solution to the government and large businesses and creating jobs in the process. Facebook says that its goal is to enable new opportunities for businesses of all sizes, but especially for these small businesses communities across India.
Around 6 million businesses in India were using Facebook until 2019, catering to only 10% of the pie, giving them ample room to grow in India. Facebook is betting big on the power of WhatsApp and Instagram to do so. India is the largest base of WhatsApp users as of 2019 with more than 400 million users and also plays an important role in helping people and businesses connect in India. Instagram has also emerged as a powerful social media channel for influencer marketing. As per 2019 data, 83% of the Instagram users discover new products and services on the platform.
The company is working on several other efforts also to help facilitate more commerce on these social channels. Facebook got approval for WhatsApp Payments trial with a million people in India back in 2018 and now has got a payment licence for a full-fledged rollout this year.
Giving a sneak peek to the plans further, Facebook's India MD & VP, Ajit Mohan said that Facebook can bring the power of WhatsApp to JioMart, Jio’s new online grocery shopping platform, not only to bring a seamless mobile shopping experience to millions of Indians but also enable small businesses to operate more effectively in the growing digital economy.
Mukesh Ambani, chairman and managing director, Reliance Industries Ltd. also said that the combined power of Jio's digital connectivity and WhatsApp's intimate relationship with Indian mobile phone will unleash innovative opportunities for small businesses in India.
Facebook made its India strategy quite clear by saying that it will bet more on local startups to reach people beyond the big cities and fuel the India internet story. This means the company is looking to make deeper inroads into the Indian market, by reaching the customers in remote areas- which are not yet covered by the traditional e-commerce marketplaces. For instance, Facebook invested an undisclosed amount in an Indian social commerce firm Meesho last year. Meesho lends a business platform to small businesses to sell their products extensively across social networks like WhatsApp and Facebook as well as gives financial freedom to a large base of individual sellers comprising women, students and even retired people.