Tech giant Facebook Inc. (FB) has announced it will be pumping in investment worth $5.7 billion in the digital unit- Jio Infocomm of Reliance Industries (RELI) in return Facebook will be getting 9.99% stake in the company.
Following closure of the deal, it will be the second largest investment ever done by Facebook the first one being acquisition of WhatsApp back in 2014 at a cost of $22 billion.
Jio Infocomm focuses largely on music, movies, news and some businesses are conducted in the platform also. Facebook will be using this platform to make entry into digital grocery services in the world’s second most populated country.
Facebook and WhatsApp are the largest social networks used in India, collectively 400 million Indian users are registered on the platforms. Facebook intends to use this numbers to enhance growth of a new retail venture born out of the partnership JioMart.
“In the near future JioMart and WhatsApp will empower nearly 30 million small Indian kirana (grocery) shops to digitally transact with every customer in their neighborhood,” said Mukesh Ambani, Reliance chairman, in a video interview.
JioMart will exist as the e-commerce unit of Reliance and it will be offering customers with free grocery delivery services across the country. Without a doubt, this new venture will pose a threat to Amazon.com (AMZN) India and Walmart’s (WMT) Flipkart.
Amazon India and Flipkart have repeatedly said groceries in India pose a promising venture.
Partnership of the two companies is said to be mutual and it may just be the beginning of potential other partnerships in the coming future.
“We will really look to explore multiple areas of collaboration. And the spirit of it will be – can we open new doors? Can we open new avenues?” said head of Facebook in India, Ajit Mohan.