Facebook and Jio made a big announcement on April 22. Big in numbers, big in potential impact. Facebook said that it was investing $5.7 billion in Reliance Jio, acquiring a 9.99 percent stake in the process and valuing Jio at $65.95 billion. Big numbers. The plans from Jio and Facebook will surely unfold in future but for now, it seems that the whole partnership is aimed at making WhatsApp, which is owned by Facebook, a sort of super app where users will not only be able to chat but will also be able to buy their groceries or pay for their haircut.
In a way, it seems that Facebook and Jio hope to turn WhatsApp into what WeChat is in China, by integrating WhatsApp with JioMart, which is a Jio service aimed at bringing local Kirana stores to online.
To see what WeChat can do in China, and WhatsApp may turn into in India, consider this:
-- In one way, WeChat is a messaging app just like WhatsApp. Users can add as many people to chat with as possible. They can upload images, videos, and also share it with their contacts. The users can comment, like, or react to your posts on the app.
-- But then there is more. Much more. And all that WeChat can do, and allows its users to do, is powered by its payment system. WeChat facilitates payments in China. Using WeChat, users in China can shop at some of the biggest supermarkets to the smallest vendors including the fleet services. This is quite similar to how Paytm functions, but unlike Paytm, WeChat is big on both fronts: communications and payments.
Money can be transferred using WeChat by scanning a barcode. Users can also transfer money instantly to their WeChat contacts.
-- WeChat is called a super-app because it provides all the services under one platform. You don’t have to download separate apps if you want to book a cab or book a hotel and flights and even movie tickets.
Now consider India. And WhatsApp. In India, users require separate apps for ride-hailing, booking hotels, or movie tickets. Some people use Paytm for something, some people use Google Pay. Some people use Zomato for ordering food. And so on and so forth. What if all of this is possible on just one app.
Facebook and Jio seem to believe that this app can be WhatsApp, which is already there on almost every smartphone in India. But what it lacks right now is a good payment system, which is in beta and needs regulatory approvals from the Indian government to go ahead, and an effective merchant network.
On both counts, it seems Jio can help Facebook. Jio is India’s one of the biggest telecom companies, and part of the Reliance group and association with it may help Facebook get regulatory approvals for WhatsApp payments.
Two, by integrating the JioMart, which is an offline-to-online platform for small merchants, local stores like Kirana shops, small businesses, with WhatsApp, Facebook and Jio may create a platform that will serve in India the kind of role that WeChat does in China.
In fact, recently there was a report in the Economic Times that both Facebook and Jio are looking to create a super app. "The idea is to create an app that is not just a communication platform but one where users would also be able to buy groceries through Reliance Retail stores, or shop at ajio.com, or make payments using JioMoney," the report had noted.
The deal between Facebook and Jio today confirms that indeed this is the plan. The e-commerce part is mention by both Facebook and Jio in their note to the media. Here is what Jio said, “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.”
In the coming months, WhatsApp could be an app where Indian users will not just talk but also buy, and with each purchase, Jio and Facebook will get a cut to enable the transaction.