An app along the lines of China’s WeChat may be imminent in India, and could take the shape of a a combined venture between Mukesh Ambani’s Reliance and Facebook. An alloy of the companies’ technical know-how, funding and expertise, the final product will be a multipurpose-app which facilitates more than just communication, reports Economic Times.
The set forth efforts are directed at combining digital payments, social media, gaming, flight and hotel bookings within a single ‘super-app’.
Although discussions between the two have been delayed due to the coronavirus pandemic, the plan is to create a platform that will enable users to buy groceries through Reliance retail stores, shop at Ajio.com, or make payments using JioMoney in addition to messaging via Facebook’s platforms. Facebook is expected to use the combined power of its suite of platforms, including Whatsapp and Messenger.
The model in works, represents something very similar to the Chinese social media behemoth WeChat. Launched in 2011, WeChat slowly grew to facilitate more than just communication and has over 1 billion monthly active users now. The Tencent-backed app provides the skeletal elements of the Super-app in creation. The Indian equivalent of WeChat is Facebook’s WhatsApp. The created app will leverage the messaging app’s platform and user base.
As for Reliance, the venture comes with a two-fold advantage. In addition to the increased B2C engagement, the app will provide the group insights on users’ spending habits.
Commercial due diligence on the project in underway, and Morgan Stanley has been roped in as the investment banker. “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” said a person with direct knowledge of the occurrences.
As for the financial structure, while both companies have hired top consultants, the final arrangement still remains a conjecture. Reports last month speculated Facebook’s multi billion acquisition of a stake in the Reliance digital operations venture-Jio. The app’s financial structure may be similarly formatted. A person involved in the deal revealed several possibilities- “a new company could be created- where both players could invest; or Facebook could invest in Reliance Retail and Reliance Jio” India’s exponentially growing market provides favourable conditions for the California-based company to readily invest in. Reports revealed that Google too is in talks with the Mukesh Ambani-owned congolmerate.
As for Reliance, an executive revealed that the company was looking to raise money for Reliance Retail and Reliance Jio. “it doesn’t matter whether the money comes from one investor or another” he added.
Although these discussions are underway, the coronavirus pandemic has forced the companies to focus on priority tasks first. In the case of Reliance, not unlike other businesses, the state of affairs begs the shift of focus to the supply of products and keeping stores running. Social media platforms including Facebook have also been handling increased traffic while efforts to build awareness about the pandemic are subsequently underway.Travel restrictions which may not be uplifted anytime soon will add to the delay.
