Jio-Facebook’s Alibaba-like model to open door for $2 trillion market; retail, payment, content key to success

By: |
Updated: Jun 11, 2020 3:54 PM

With Mukesh Ambani and Mark Zuckerberg joining hands to contribute to India’s digital economy, the Jio-Facebook platform may actually open doors for a market which is likely to reach $2 trillion or even more by 2025.

The platform model is not a new concept with China’s Alibaba already scripting a success with it.

With Mukesh Ambani and Mark Zuckerberg joining hands to contribute to India’s digital economy, the Jio-Facebook platform may actually open doors for a market which is likely to reach $2 trillion or even more by 2025. “Reliance Industries and Facebook are building an ecosystem (10 key services) each big enough to provide important and discrete services to the consumer,” Bernstein said in a report adding that the core services of the platform viz retail/commerce, payments, and content, advertising and others, together have the potential to reach $2 trillion plus by 2025. Individually, retail and commerce is expected to touch $1.3 trillion, payments $700 billion and content, advertising, and others $70 billion. 

Recently, US-based tech giants have shown an increasing interest in India’s digital market with the country having the second largest internet user base after the US and China. India also has about 600 million internet users and second largest smartphone user base at over 700 million. Other than this, India also promises e-commerce opportunity with online shopping in the country growing at over 30% CAGR). “A platform approach can unlock the digital ecosystem,” the report said.

Alibaba shows a platform model can be a success

The platform model is not a new concept with China’s Alibaba already scripting a success with it. For Alibaba, e-commerce has helped capture the digital advertising market and digital payments as well. RIL and Facebook can also capture a large market share across services such as commerce, payments, content & advertising.

“Monetisation for e-commerce could start with a low take rate and expand over time…Digital advertisement is another large opportunity across the platform (OTT, Commerce, others). Payments could be a game changer with WhatsApp Pay integrated with JioMart,” the brokerage said in its report. Further, Reliance Jio and Facebook will also be benefitted by the coronavirus situation as e-commerce/online grocery, digital payments and digital content are expected to win overall. A shift in customer behaviour in terms of digital adoption across these categories is also a bonus. 

Facebook and Jio had announced a multi-billion dollar deal in April this year with Facebook pledging $5.7 billion to buy 9.99% stake in Reliance Industries Ltd.’s telecom arm Reliance Jio. Both companies look to enable local kirana stores and empower India’s digital ecosystem with the deal. 

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Wipro’s new CEO Thierry Delaporte takes charge, asks  employees to lead growth in industry
2Indiabulls Housing Finance to convene EGM on July 29 for shareholders’ nod to raise up to USD 300 million
3Hong Kong: Facebook, WhatsApp, Telegram block law enforcement requests for user data