BENGALURU: The landmark $5.7 billion Facebook- Reliance Jio deal could give rise to India’s largest offline-to-online commerce which in the near possibility would help digitise millions of the country’s old-fashioned neighbourhood kirana stores.
The deal envisages to leverage Facebook-owned Whatsapp’s 400 million user base and connectivity to build Reliance’s New Commerce platform, JioMart in partnership with millions of small merchants and kirana stores.
“The companies will work closely to ensure that consumers are able to access the nearest kiranas who can provide products and services to their homes by transacting seamlessly with JioMart using WhatsApp,” Reliance Industries said in a statement.
“Our focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants and millions of small and medium enterprises in the informal sector, in addition to empowering people seeking various digital services,” the company added.
Analysts indicate that the partnership assumes greater significance especially when COVID-19 pandemic has outlined the role these mom and pop stores play in our everyday lives and also laid bare the long road which the e-commerce companies have to travel in India. In fact, the unorganised retail, mostly the micro, small and medium enterprises (MSME) account for 80 per cent of the total industry and hence their digitisation will throw open massive opportunities for business as well as employment.
RIL chairman Mukesh Ambani had earlier made it clear that his next big bet will be to tap the unorganised retail market in India and that he is keen on investing nearly $700 billion in New Commerce which will fasten the delivery process of the local neighbourhood stores as well as widen their outreach.
“JioMart and WhatsApp will empower nearly 30 million small Indian kirana shops to digitally transact with every customer in their neighborhood,” Ambani said in a video message.
Media stocks, led by ZEEL, gain considerably
A multi-billion-dollar deal between two of the biggest corporate houses of the US and India has lifted up the depressed mood on Dalal Street. In fact, most of the media stocks were in huge demand with Zee Entertainment (ZEEL) leading the pack due to the Reliance Jio-Facebook deal. Shares of ZEEL settled at 20 per cent, followed by Reliance Group’s TV18 Broadcast and Network18 which jumped 19.83 per cent and 9.79 per cent, respectively. DEN Networks Ltd was also up 4.99 per cent. The Nifty Media index gained 6.65 per cent. Experts say the sharp rise was because expectations are there could be consolidation of smaller players due to the Covid-19. “Due to Covid-19, ad revenue has collapsed and survival of smaller and unlisted companies has become tough,” said Abneesh Roy, senior VP of Edelweiss Securities.