Social network makes biggest acquisition since acquiring WhatsApp by purchasing 10 percent stake in Indian firm Reliance Industries
Facebook has invested $5.7 billion in the digital unit (Jio Platforms) of Indian conglomerate Reliance Industries, in a move that is its biggest acquisition since acquiring WhatsApp.
The $5.7 billion spend has given it a 10 percent stake in the digital unit of Reliance, which is looking to roll out services for India’s grocers and other small businesses by utilising WhatsApp’s already extensive reach within the country, Reuters reported.
WhatsApp is part of the Mark Zuckerberg empire after Facebook acquired WhatsApp in 2014 for a staggering $22bn, despite the fact that WhatsApp at the time had a tiny revenue stream.
Facebook stake in Jio Platforms will help Reliance slash away at a heavy debt load incurred as it expanded aggressively into telecoms and retail, Reuters reported.
Facebook’s deal will see JioMart work together with WhatsApp, which counts India as its largest market with 400 million users, to connect business owners with their customers.
“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 neighbourhood,” Mukesh Ambani, Reliance’s CEO was quoted as saying in a video statement.
Facebook is entering a highly competitive Indian online grocery market, where Amazon’s Pantry, Walmart’s Flipkart and Alibaba’s BigBasket are all competing for market share.
The market is potentially lucrative, as ‘kirana’ stores in India are largely untapped and unorganised in terms of e-commerce despite forming the backbone of the country’s grocery and food retail industry, worth some $375 billion annually according to the Retailers Association of India.