Reliance Industries Mukesh Ambani and Facebook are working together to develop a multi-functional Super-App. The app will be a common platform for features like digital payments, social media, gaming along with flight and hotel booking options, among others.
Objective of the App
The focus is to create an app similar to Chinese based WeChat app by leveraging the WhatsApp platform. The idea is to create an app not only as 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 super-app will might work on the lines of WeChat. It will combine digital payments, social media, gaming as well as flight and hotel bookings, among other features.
The app will provide Reliance Industries with a two-fold benefit. It will provide B2C engagement for its consumer businesses, and provide the group reviews on users’ spending habits.
Commercial due diligence
Commercial due diligence for the app is undergoing. Morgan Stanley has also been roped in as the investment banker.
The development will come in two weeks. Facebook is in talks to acquire a 10% stake in Indian telecom giant Reliance Jio. If the deal will be finalised then it would be the third investment for the Mark Zuckerberg-led company in India followed by Meesho and Unacademy.
Delay because of Coronavirus
Due to coronavirus pandemic, there is a ban on travelling. The project is on pause for now and the final agreement has been postponed. Commercial due diligence for the project is still undergoing.
Both the companies are hiring top consultants based in the US to explore all areas such as legal issues and taxation.
Final structure is yet to decide
The final structure of the app is yet to decide. The delay is because of the coronavirus pandemic. The collaboration will be a normal collaboration or it is going to be a partnership for life
Assumptions on deal
The assumptions can be made from the current scenario are
- The deal is going to be a successful partnership.
- It is going to be a normal collaboration.
- A new company will be created in which both will invest.
- Facebook will invest in Reliance Jio and Reliance retail.
Clarity on all these aspects is yet to be decided.
Reliance Retail is currently focusing on keeping its stores running amid coronavirus. The reason behind this is that consumers must get essential supplies from time to time.
According to reliable sources, Reliance Industries is publicly expressing that the company is looking for various ways to raise money for Reliance Jio and Reliance Retail. It doesn’t matter whether the money comes from one investor or another said one of the RIL executives.
About RIL and Facebook
According to Wikipedia
- Founded on February 4, 2004; 16 years ago in Cambridge, Massachusetts
- Facebook, Inc. is an American social media and technology company based in Menlo Park, California. It was founded by Mark Zuckerberg, along with fellow Harvard College students and roommates.
- Revenue is 7,069.7 crores USD (2019)
- Number of employees: 44,942 (31 December 2019)
- Headquarters: Menlo Park, California, United States
Reliance Industries Limited (RIL)
According to Wikipedia
- Founded on 8 May 1973; 46 years ago
- Reliance Industries Limited (RIL) is an Indian multinational conglomerate company headquarteres in Mumbai, Maharashtra. Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications.
- Founder: Dhirubhai Ambani
- Revenue: 6.23 lakh crores INR (2019, US$90 billion)
- Headquarters: Mumbai, Maharashtra, India
- Number of employees: 194,056 (2019)
