Which Indian company is bigger than Reliance?

Facebook's $ 5.7 billion bet on the Indian Internet market

5.7 billion dollars for a share of ten percent: apart from WhatsApp, Facebook has never spent so much money at once as on the new investment in the Indian Jio Platforms Limited. It is worth almost six billion dollars to the US social network to buy into what is now the second largest internet market in the world after China. With Jio, a subsidiary of the industrial giant Reliance Industries, you now have the largest Indian telecommunications company as a partner.

“This investment underscores our commitment to India and our enthusiasm for the dramatic change that Jio has initiated in this country. In less than four years, Jio has brought more than 388 million people online, spearheaded the creation of innovative new businesses, and connected people in new ways, ”said Facebook. India is the most important growth market for the US company.

WhatsApp as a payment channel

"We are committed to working together on some major projects that will open up trading opportunities for people across India," said Facebook CEO Mark Zuckerberg. A first cooperation has already been announced as part of the deal. WhatsApp is to be linked more closely to the JioMart trading platform. Small, local retailers are networked with their customers via the platform, and WhatsApp is to be used as a channel for transactions in the future. Facebook wants to finally monetize WhatsApp properly - through financial services and not through advertising like the other products.

The focus of the investment, according to Reliance Industries, is on the 60 million micro, small and medium-sized enterprises, 120 million farmers and 30 million small traders in India for whom digitization is to be promoted. As a mobile communications and Internet provider, Jio has managed to get 400 million people online in just four years. With fast 4G mobile communications and competitive prices, Jio has become India's leading mobile operator in just a few years - and thus the most important entry point for India's citizens into the Internet.

Closer ties to India's richest man

With the investment in Jio, Zuckerberg also invested in the richest man in India, Mukesh Ambani, the boss of Reliance Industries. Ambani is the second richest man in Asia after Alibaba founder Jack Ma, and the telecommunications subsidiary Jio is the most important sector of the industrial conglomerate, which is also active in the oil business. Ambani, in turn, has good connections with India's Prime Minister Shri Narendra Modi.

Ambanis Jio Platforms has also built up a lot of debt through its aggressive entry into the Indian Internet market - with the billion-dollar investment, the company is now better off and is valued at around 66 billion dollars. "This is the largest minority stake investment by a technology company anywhere in the world and the largest foreign direct investment in the technology sector in India," cheers Jio.

New start after failed projects

So far, Facebook has been able to collect a lot of users in India, especially for its WhatsApp and Instagram daughters. But advertising could not monetize them as much as in Europe or the USA. Facebook also failed in India with the free internet service “Free Basics” because it violated net neutrality by giving preference to its own and partner services and was banned by the state. As a shareholder in Jio you have your foot in the door again to make your own ministries bigger.

And: alongside China, India is the most important Internet growth market. In China, Facebook and Co. is blocked. Meanwhile, ByteDance from China can currently also collect many millions of users in India with its TikTok app. It is important to stand up to this.