Reliance Industries and Facebook are working on creating a multipurpose app that will allow its users to communicate, buy groceries through Reliance Retail stores, shop at ajio.com, or make payments using JioMoney. According to a report in The Economic Times, discussions were underway but they are now delayed due to the Coronavirus outbreak that has forced businesses to either temporarily shut or minimise operations.
Citing four people with the knowledge of the matter, the report says that Mukesh Ambani-led company and Facebook are exploring to leverage WhatsApp and its user base, and the two giants ‘would bring in funding, technical knowhow and domain expertise for the project’. The app will be like WeChat -- a super-app that has a huge user base in China, and combines services like digital payments, social media, gaming, flight and hotel bookings.
‘The negotiations are being compartmentalised. So, someone working on the commercial side wouldn’t know what’s happening on the technology or the financial aspects of the deal. This is going to be a defining partnership, and it’s not just a financial investment. The deal is about creating value and a business that would differentiate both Facebook and Reliance,” two persons said.
The report said that the app would ‘provide a two-fold benefit, provide B2C engagement for its consumer businesses, and provide the group insights on users’ spending habits’. Further, people said the situation is fluid, and there is no clarity on how things would work out. Both the companies have apparently hired top consultants and lawyers based in the US to explore all aspects.
‘A new company could be created — where both the players could invest; or Facebook could invest in Reliance Jio and Reliance Retail, and that is the way the partnership could be formed for the new venture,’ said a person who is part of a team working on the deal. The report builds up on a Financial Times’ March 24 report which claimed that Facebook could take 10 per cent share in Reliance Jio in a multi-billion deal.