'Relia-book' : A Deal to Heal

The below post doesn’t fall in line with the Blog Name  - Marketing Mistakes, but it was certainly something worth mentioning about. Do give a read!!

Living in times, when marriages are being celebrated more on social media than they ever did, so much so that the aesthetic diffusion of two names into one(virushka, deepveer,etc), becomes the trend, keeping up with that trend becomes a moral obligation and no more a choice.

In marketing and business the tie-ups and deals are no less than a marriage (atleast I think so), so why it shouldn’t be celebrated the same way. Hence, the name “Relia-Book”.

The Big Picture:-

• Social Media giant Facebook buys 9.99% stake ,(that sums up to Rs43,574 crore),in Reliance’s JIO, creating a world record for the  largest investment in a company for a minority stake .
• Post the announcement, shares of RIL surged 10.3% 
• The deal now values JIO at Rs4.62 Lakh Crore.
  

The Facts:-

• The deal was brought to life under the codename – Project Redwood.
• It is by far the largest foreign direct investment in technology sector in India.
• The accord focuses to bring JIO Mart, a new child of the JIO family, up in front of the Indian audiences. It would be JIO’s digital e-commerce platform.
• JIO Mart and WhatsApp ( FB’s billion dollar buy) together aim to provide digital solutions to 60 micro small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in the informal sector.
• JIO Mart would be in direct competition with e-commerce giants like Amazon and Flipkart.
  

Win – Win Situation?

•  RIL’s net group debt stood at around Rs1.53 lakh crore of which JIO (across platforms) had garnered around Rs40,000 crore in debt.
• Moreover with oil prices plummeting, the risk of the RIL-Aramco (Saudi Arabian Oil Company) deal going to the trash seemed imminent.
• JIO Mart, a distinct and near future, also required a much needed boost in terms of a payments partner.
  
• Therefore, the deal gives RIL an optimal solution. It’s a stitch in time, saving nine!!!
• On the other hand, WhatsApp, owned by Facebook, is about to launch its Digital Payment Service, it has already got the essential nod by the NPCI and it would be launched in a phased manner, targeting 10 million Indians in the first phase.
• JIO has about 390 million users, roughly half of the total mobile Internet users in the country and Facebook has about 328 million monthly users in India with more than 400million WhatsApp users in the county.
• With the help of JIO’s customer base and outreach, along with WhatsApp’s ubiquitous influence in everyone’s life, WhatsAppPay would be a tough competitor to the present players like GPAY, Paytm etc.
  
    

My 2 Cents:- 

• In these times, when the wheel of economy is predicted to get rusty, this deal would provide the much needed galvanization. 
• It would undoubtedly boost the Indian economy to a great extent, with large scope of jobs generation.
• With the arrival of JIO Mart, the duopoly of Amazon and Flipkart may take a huge hit. If JIO Mart follows the treaded path and grows in the similar fashion as JIO did, the e-commerce competition would be tough and the tougher the competition , the beneficial it is for the customers.
• Well, I would be too optimistic, but getting a huge deal, done and dusted, might also see JIO reducing prices of the existing data plans and tariffs.
• The telecom sector players in India, might have to accelerate their digital expansion in order to be in contention, but with AGR dues and other debts on both Airtel and Vodafone, it may not be likely on their part to explore new ways. This may lead subscribers switch sides.

This deal is of two Data Giants. JIO and Facebook together would share data of almost a billion Indians, which would give them the undue advantage over their competitors, be it local or global. However, the CCI approval is still pending over this deal, strict data sharing policy should be a must for the deal before getting actualized!!