Indian telecom giant major Reliance Jio and Facebook are joining hands to build a super app that could fulfil the digital requirements of every Indian across activities ranging from shopping to booking movie tickets, making online payments to simply chatting with friends or making social media posts.
Both Facebook and Reliance Jio would bring their own domain expertise for the success of the joint venture. Facebook would leverage its WhatsApp platform user base while Jio would help drive adoption through its subscriber base. Commercial due diligence for the project is underway and Morgan Stanley has been appointed as the investment banker for the deal.
However, reports suggest that discussions have been delayed due to COVID-19 related lockdown though both companies have hired top lawyers and consultants to explore all aspects of the project including legal issues and taxation.
The app, if and when it materializes, would be something along the lines of WeChat in China where it is the go-to app for much of the Chinese population for managing their everyday tasks. Right now, Indian consumers rely on a myriad of different apps for needs such as messaging, retail shopping, digital payments, and booking tickets.
If Reliance Jio succeeds in offering all these solutions effectively under a single roof, the opportunity to grow is immense. Moreover, Jio would also gain B2C engagement for its consumer businesses as well as big data about user spending habits. The app would also open up revenue opportunities for Reliance Retail, Ajio.com, and JioMoney businesses.
This new development comes amidst reports that Facebook was in talks with Reliance Jio to pick up a ten percent stake in the telecom giant. The discussions were inconclusive due to the air travel ban imposed in India following the lockdown on March 24.