Facebook Inc.’s $5.7 billion investment in a unit of India’s Reliance Industries Ltd. creates an e-commerce leviathan to take on Amazon.com Inc. and Walmart Inc. in one of the world’s most competitive internet arenas.
The deal twins WhatsApp with Reliance’s nearly 400 million internet users much of that added in just a couple of years and nationwide store and logistics network. The pair could start with forays into e-commerce and digital payments, before moving on to segments from online education to virtual health over the longer term, helping transform the industry that’s now mainly the preserve of India’s urban elite.
The latest deal is a win-win for both Facebook and Jio. It would give Facebook deeper access to India, the second largest internet market after China.
Facebook already has 400-plus million Whatsapp users in India and is looking to launch a payment offering. Having a local partner could help it in navigating various regulatory issues, including those related to privacy and local storage.
Facebook said the investment “underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country”.
“The partnership between Facebook and Jio is unprecedented in many ways. This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India,” RIL said.