Facebook is New Face of Jio? Mavericks Mark & Mukesh Come Together

Facebook boss Mark Zuckerberg & Mukesh Ambani seal the world’s biggest tech tie-up deal to capture the market place.

Image: Erum Gour/The Quint

What do Mukesh Ambani, Mark Zuckerberg and Manu ji – my local grocer – have in common? They all believe in the power of WhatsApp. My grocer likes it because it saves him the trouble of writing down delivery orders – “Aap WhatsApp kar diya karo,” he told me sometime last year, “nahin to main bhool jaata hoon.”

He is not alone. My chemist takes orders via WhatsApp and sends me a photo of the bill so that I keep cash ready, when his delivery-boy comes with the medicines. My sabziwala, who is constantly indebted to me – not spiritually, but in terms of loans he takes – sends WhatsApp messages to update the balance left with him. The lockdown has made my entire network of shopkeepers even more WhatsApp-friendly.

• Facebook has bought 9.99% stake in Reliance Jio for Rs 43, 574 Crore.
  
• This alliance will help 3-crore kirana stores to “digitally transact” with customers in their neighbourhood, using the JioMart app and WhatsApp.
  
• Ambani has to contend with Amazon’s deep-pockets, hence JioMart’s new model.
  
• It took two years of trials for WhatsApp pay to finally get the nod in February this year, to roll-out its services in a phased manner.
  
• Like Zuckerberg, Mukesh Ambani has reached a point where he needs to deliver earnings.
  
• People like Mukesh Ambani and Mark Zuckerberg – who create and control the infrastructure of digital system, will be the rulers of our future.
  

Facebook Boss & India’s Richest Man Seal World’s Largest Tech Tie-Up Deal

That is the reason for the world’s largest-ever tech tie-up, that Mukesh Ambani & Mark Zuckerberg have announced. Reliance says, the alliance will help 3-crore kirana stores to “digitally transact” with customers in their neighbourhood, using the JioMart app and WhatsApp. According to Mukesh Ambani, “this means all of you can order and get faster delivery of day-to-day items, from nearby local shops.”

In reality, this is not really about you and me, who are already using WhatsApp to get our orders. It is about getting rid of competition. Mr. Ambani has already showed how to wipe out the competition in telecom, by simply giving data for free. It was bold move, that put him in a lot of debt, but it also ensured that Jio, India’s youngest telecom service provider quickly got the largest subscriber base of 388 million users.

Mavericks Mark and Mukesh Know How to Run Business

Mukesh Ambani has repeatedly said that data is the new oil, which means it will drive all economic life in the coming future. Retail will play a big part in it, but like data, it won’t be that easy to make money from it. Ambani has to contend with Amazon’s deep-pockets when it comes to capturing the e-retail market, which is why he has come up with a different model in JioMart, which combines the existing brick-and-mortar infrastructure of local kirana shops with a digital market place.

Jio customers will be able to connect with an entire network of local shops, get deliveries and make payments through the app.

The trouble is that local kirana shops – like mine – are already using WhatsApp to do much of that. That’s what Mark Zuckerberg was betting on when he bought WhatsApp for $19 billion six years ago. At that time, WhatsApp had just 450 million users worldwide, and virtually nothing to show for in revenues. Zuckerberg knew that people use WhatsApp because it is free, and very soon he removed the $1 annual fee that was being charged in some countries. Instead, he focused on getting businesses to use WhatsApp to connect to their customers and pay for it.

Zuckerberg’s India Outreach

No one knows how far that model has succeeded, but most estimates suggest that WhatsApp loses mega bucks. What it has to its credit is 2 billion users worldwide, 20 percent of whom are in India. Zuckerberg has been trying to push WhatsApp’s own payments gateway, WhatsApp in India, but with limited success. It took two years of trials for WhatsApp pay to finally get the nod in February this year, to roll-out its services in a phased manner.

But, Zuckerberg knows that WhatsApp is a politically vulnerable platform, which governments clamp down on regularly to fight fake news and potential unrest. While people might live with not being able to mass forward jokes and memes, businesses will not be happy with a payment gateway that gets blocked along with the messaging service. Zuckerberg is known to be an unsentimental businessman, who doesn’t let his ego stand in the way of making money. This eagerness to fete national leaders shows that he understands the importance of government.

Capturing the Market Place Together

Now, who could be a better and more influential friend than Mukesh Ambani? His father, Dhirubhai had once said, “you have to sell your ideas to the government.” And, Reliance has always done that well, whoever has been in power. Jio has had a dream-run when it comes to finding a favourable policy-environment. And, the money he has poured into the business has ensured that he has left his competitors far behind.

But, like Zuckerberg, Mukesh Ambani has reached a point where he needs to deliver earnings. JioMart and JioMoney are meant to do just that, but it has to contend with WhatsApp’s vast reach in India. Zuckerberg and Ambani both know that they are tough competitors to beat.

As a media magnate once told me, when you cannot compete, you coopete – compete through cooperation.

The Reliance-Facebook tie-up is a great example of such coopetition, where the two giants will join hands to capture the market-place together.

Creating a retail network of kirana-shops using JioMart and WhatsApp is most likely the first step of this alliance. The future of the digital highway involves the internet of things, where everything that we use will have its own IP. Cars will communicate with traffic lights, refrigerators with vegetable sellers, gas cylinders with LPG supplying companies. It is most likely that most of the costs of running the internet of things will be paid for by businesses, municipalities and government departments. Much of what is coming is uncharted and unknown. One thing is clear that people like Mukesh Ambani and Mark Zuckerberg – who create and control the infrastructure of this system, will be the rulers of our future.

(The author was Senior Managing Editor, NDTV India & NDTV Profit. He now runs the independent YouTube channel ‘Desi Democracy’. He tweets @AunindyoC. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)