Facebook, Jio will collaborate as well as compete

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Published: April 23, 2020 2:10 AM

Since the deal between the two firms is not exclusive, tomorrow Facebook is free to forge any kind of alliance with the likes of Amazon or Flipkart on the retail side.

Facebook is free to forge any kind of alliance with the likes of Amazon or Flipkart on the retail side.

Though Facebook has picked up a 9.9% stake in Jio Platforms and collaborating on the e-commerce front, the two players will continue to compete in other areas. There are several duplication which will continue to exist, executives of both the companies said in a concall after the announcement of the deal. “The construct of this collaboration is not meant to be exclusive,” Ajit Mohan, vice-president and managing director of Facebook India, said.

This was echoed by Anshuman Thakur, head of strategy, Reliance Jio, who said, “At this point, we have identified merchant, SME commerce as something we can collaborate and we can benefit from what WhatApp already does very well… We will similarly find areas where the skill sets may be more complementary but this investment or partnership does not mean that we will not compete in the market.”

The statement assumes significance because Jio has a messenger app, Jio Chat, which is on the lines of WhatsApp but with much less subscribers. This will continue as before and not get subsumed as part of the deal. Similarly, while WhatsApp is waiting to get final clearances from the government for its payment business, Jio has one up and running Jio Money. This will also continue as before.

Since the deal between the two firms is not exclusive, tomorrow Facebook is free to forge any kind of alliance with the likes of Amazon or Flipkart on the retail side. “The platforms remain open… it is non-exclusive and it is not meant to keep anyone away,” Mohan said when asked specifically on such possibilities.

According to Thakur while the arrangement in the present deal is that Jio will bring commerce and WhatsApp communication on the table, the two will continue to function as independent brands and compete where necessary. “It will be collaboration as well as competition. There will be things where we will be directly competing with each other in the market, the entities are independent of each other in every respect. We have our suite of products and services, the same way that Facebook has its own suite of products and services and we are going to make best use for our respective companies,” he said.

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