Facebook logs in Jio: What it means for India
Present time is marred by uncertainties. Common words of wisdom across industries are ‘conserve cash’. The news of Facebook investing $ 5.7 billion assumes importance as its declared amidst these crisis times.
Lately, China has emerged as major source of capital for tech ventures in India. Total Chinese investment in Indian Tech Ventures is approximately $ 4 billion (report by foreign policy think tank ‘Gateway House: Indian Council on Global Relations). This reflects the huge aspect in Facebook-Jio deal.
India has been considered as next destination for explosion of digital economy after China. The valuations by Flipkart and PAYTM in deals with Walmart and Berkshire Hathaway respectively were guided by these considerations only. The lowering consumption and resultant sluggish GDP growth in Indian economy for past 18 months made many analysts to start thinking pessimistic about India Growth Story.
In this background, the Facebook-Jio deal is a pleasant happening.
As per research report by Ericsson, India is going to have more than 1.1 billion smartphone users by 2024. With 38 crore Jio subscribers and 40 Cr Facebook users in India, combined entity is aspiring to get maximum pie of increase smartphone users.
As transpired from Mukesh Ambani’s statement, the focus of JV would be to strengthen Jio Marts for providing integrated smart solution to 3 crore Kirana shops in India. One more fact which is important in this contest is that Reliance Retail has crossed revenue of ₹10k crore and is profitable entity now.
In his India visit, Jeff Bezzos has also announced big plans aimed at small Kirana shop keepers in India.
All these augers well for India as investment destination. Covid-19 may have created pessimistic outlook everywhere but Facebook-Jio deal certainly make us believe that India can bring back growth to tap its inherent potential.
Tunnel may be long but there is light at the end of it for sure.