Ambani’s Jio Platforms - Asia’s richest billionaire - has owned an ecosystem of applications from e-commerce to online broadcasting. Through the Reliance Jio mobile network, the platform serves more than 388 million users in India.
But the ambition of the Indian billionaire doesn’t stop there. Within a few weeks, Mr. Ambani reached a $ 9 billion deal with Facebook and other investors in the US to continue to dominate the Indian Internet market - the fastest growing market in the world.
“Ambani definitely wants Jio Platforms to be more than just a telecommunications company. He wants the company to become Google or Tencent of India, ” CNN quoted Wylie Fernyhough analyst at PitchBook.
"The group’s ultimate goal is to provide everything for all Indians, build an indispensable platform for the country’s hundreds of millions of internet users," Counterpoint Research’s Tarun Pathak said. strong.
Giant technology empire
Tycoon Mukesh Ambani has transformed Reliance Industries from an energy company into a large corporation, including retail stores, mobile and broadband providers, digital platforms and more.
However, to take his plan to the next level, Mr. Ambani needs a partner from Silicon Valley. It’s Facebook and global messaging app WhatsApp with a deal worth $ 5.7 billion .
“This formula will be replicated to serve individuals in Indian society. They are our farmers, our students and teachers, our small and medium businesses, our health care workers, ”Mr. Ambani said.
According to Fernyhough, the agreement between Mr. Ambani and Facebook aims to create "a platform that provides users with everything from mobile banking, messaging apps to social media." This model is similar to Tencent’s WeChat service in China.
However, unlike Tencent, Jio Platforms has a huge mobile network that helps build customer base. "We are witnessing e-commerce, the cloud and technology companies replacing traditional telecommunications companies," said Pathak.
Ambani’s deals with Facebook and some other investors amount to $ 9 billion . Photo: Reuters .
Facebook emphasizes that the two companies still provide separate services in India. However, the deal with Facebook still strengthens Ambani’s influence in India, allowing him to use online services and digital tools to attract new customers.
Online shopping is the top goal of the deal. According to Bernstein, grocery accounts for 70% of the retail market in India. In particular, 90% of the market is small, unorganized stores. The size of the retail market is expected to increase from US $ 676 billion in 2018 to US $ 1,300 billion by 2025.
The online grocery market in India is only worth about $ 3 billion , according to research firm Forrester. However, this number is growing rapidly in the context of a pandemic that changes consumer shopping habits. By the end of its launch last year, JioMart aims to create a partnership with 30 million small stores on the platform.
Opportunity from Covid-19 translation
The Covid-19 epidemic and India’s blockade order prompted small shops to shift to online sales. More than 400 million users in India use WhatsApp as a means of messaging to inquire about goods and services.
Sambit Mohanty, a 40-year-old marketing director, tried to order tea leaves and soups for his parents on Amazon. But delivery time takes up to 10 days. He also couldn’t buy toys for his daughter because Amazon stopped accepting orders for non-essential goods.
Sambit Mohanty said he would return to the local grocery store. Many of them do business on WhatsApp. However, local grocery stores have a downside. It is difficult to keep track of inventory because many shop owners only track goods with a book and often forget to update.
If JioMart can connect with millions of stores, help organize and track inventory, this problem will be solved. Reliance also has the largest number of groceries in India as a supplier.
According to Pathak of Counterpoint Research, persuading retail stores to partner with JioMart is also easier because they are used to using WhatsApp and do not need to download new applications.
JioMart has many advantages when partnering with WhatsApp messaging app. Photo: Getty Images.
Mr. Ambani is facing pressure to pay off the debt of Reliance Industries. Immediately after the agreement with Facebook was announced, Jio Platforms revealed another 3 major investments. That’s $ 750 million from Silver Lake, $ 1.5 billion from Vista and $ 870 million from General Atlantic.
Thus, Asia’s richest billionaire is guaranteed to reach 9 billion USD in less than 4 weeks. At a shareholder meeting last year, he announced he wanted Reliance Industries to become "a company with zero net debt in March 2021". As of March 2020, Reliance has about US $ 44 billion in book debt.
"Reliance needs technology to move from an oil trading company to a software company," said Forrester’s Meena expert. The pandemic plunged oil revenues. Global demand for oil declines as transport, industry and trade plummet.
"Investors saw the potential of the Indian version of WeChat and believed the company could be worth hundreds of billions of dollars someday," comments Pitch Pitch’s Fernyhough. Last month, Reliance Industries announced it had exceeded its target and could reach its debt target of zero by the end of this year.
