Facebook takes US$5.7 billion stake in India digital platforms
22 April, 2020
Facebook has taken a US$5.7 billion stake in the Jio digital platforms business of India's richest man Mukesh Ambani, both sides said Wednesday (Apr 22), marking one of the primary foreign investments in the united states.
The deal will give the US social media giant a 10 % stake in Jio Platforms, part of Ambani's Reliance Industries empire.
Announcing the deal, Facebook said it wished to link up the "power of WhatsApp", its messaging subsidiary, with Jio, which is going for a fast-growing share of the online sector to increase digital business.
India is Facebook's biggest single market with some 400 million users.
"India is in the midst of probably probably the most dynamic social and monetary transformations the world has ever seen, driven by the rapid adoption of digital technologies," said a Facebook statement.
In four years, Ambani has turned his Jio telecoms unit into the country's biggest mobile operator with 388 million subscribers, knocking aside competition with aggressive low pricing.
Jio Platforms provides internet and e-commerce services that tap into the huge subscriber base.
Reliance said it wished to boost income for farmers, micro-traders and other small businesses that will be the cornerstone of the economy in the united states of 1 1.3 billion people.
The company is expected to roll out its e-commerce initiative later this year and has been conducting trials with mom-and-pop stores to check its payment devices, with the aim of connecting small shops with consumers.
"Jio digital new commerce platform and WhatsApp will empower practically 30 million small Indian Kirana (grocery) shops to digitally transact with every customer in their neighbourhood," Ambani said in a video statement released on Wednesday.
He added that the "synergy between Jio and Facebook will help" create new occupations for small businesses in India and aid with two key national goals discovered by Prime Minister Narendra Modi for India.
"The simple living for all Indians, especially common Indians and the simple doing business for all entrepreneurs, specifically for small ones," Ambani said.
The tycoon lost his crown as Asia's richest man last month after the virus-fuelled rout across global markets wiped billions off his fortune, according to Bloomberg Billionaires Index.
This is only days after the company reported record net profits for the quarter ending December 2019.
The fortunes of Ambani's conglomerate have lately ballooned on the trunk of India's telecoms boom, with the company also announcing aggressive plans last year to enter the country's fixed-line broadband market.
Ambani lives along with his family in a 27-storey luxury Mumbai skyscraper reputed to have cost a lot more than US$1 billion to build.
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