Reliance and Facebook join hands to compete Chinese app WeChat, will create new super app
Mumbai. Both Reliance Industries and Facebook, led by Mukesh Ambani, are exploring the possibilities of building multipurpose apps similar to the Chinese super-app WeChat by leveraging the WhatsApp platform and user base. Both will raise funding, technical know-how and domain expertise for this project.
Facility to use Jio Dotcom and Jio Money
According to media reports, the idea behind launching this app in the wake of the Covid-19 epidemic is that through it users will be able to buy groceries from Reliance retail stores or on jio.com and pay using JioMoney.
The plan to create a super-app on the lines of WeChat is also because it interconnects digital payments, social media, gaming as well as flight and hotel booking, among other features.
Morgan Stanley Investment Banker appointed
With such an application, Reliance Industries will provide two types of benefits – it will provide a BToC platform for its consumer businesses, and at the same time it will provide consolidated insights on users’ spending habits. Proper commercial diligence is currently underway for the project and Morgan Stanley has been appointed as an investment banker.
Facebook and Reliance will be defined differently
According to the report, the ongoing negotiations about this are being explored in different ways and hence, no one working on the commercial side will know what is happening on the technology or financial aspects of the deal. This is going to be a defining partnership and it is not just a financial investment. The deal is about value and creating a business that will define both Facebook and Reliance differently.
Final structure not clear
According to the report, the situation is not clear at all and it is still not clear what its final structure will look like. Another person who was part of a team working on the deal said that “a new company can be created where both companies can invest or Facebook can invest in Reliance Jio and Reliance Retail and in this way new ventures A partnership can be formed for.
Plan to buy 10 percent stake
On March 24, the Financial Times reported that Facebook is eyeing a multibillion dollar stake in Reliance Jio. The report said that Facebook could buy a 10% stake in Reliance Jio for ‘billions of dollars’. A third person said, “There is going to be a commercial collaboration, but it’s unclear how the companies will come together because a lot will depend on commercial relationships and how the technical information will bring the two companies closer.”
Reliance Industries is looking to raise money
People close to the case also indicated that the deal could take longer due to the Covid-19 epidemic. He said, “Their priority for Reliance Retail is to keep the store operational so that consumers can get supplies.” Apart from this, there are travel restrictions that create problems. Reliance Industries has publicly stated that the company Reliance Jio and Reliance are looking to raise money for retail. He added, “It doesn’t matter whether the money comes from an investor or Isi other.