If you wanted to know how much value Facebook sees in the emerging Indian market, this deal certainly provides some indication.
After recent reports that Facebook was looking to acquire a stake in Indian internet provider Jio, The Social Network has now confirmed that it has purchased a majority stake in the Reliance-owned venture for a massive $US5.7 billion.
As explained by Facebook:
"Today we are announcing a $5.7 billion, or INR 43,574 crore, investment in Jio Platforms Limited, part of Reliance Industries Limited, making Facebook its largest minority shareholder. The investment underscores our commitment to India, and our excitement for the dramatic transformation that Jio has spurred in the country."
Launched just three years ago, Jio has quickly become one of the top internet providers in India, with some 388 million customers in the region. Facebook's involvement will provide Jio with a whole range of new resources, while the acquisition will provide Facebook with a new way into the Indian market, which it's been looking to gain a foothold in for many years, with varying levels of success.
Most notable for Facebook will be connection to WhatsApp, the most used messaging app in the nation.
As Facebook notes:
"Over the years, Facebook has invested in India to connect people and help businesses launch and grow. WhatsApp is so ingrained in Indian life that it has become a commonly used verb across many Indian languages and dialects. Facebook brings together friends and families, but moreover, it’s one of the country’s biggest enablers of growth for small businesses. And Instagram has grown dramatically in India in recent years as the place where people follow their interests and passions."
Facebook will be hoping to use its newfound presence in the local market to fuel more business activity via WhatsApp, and Facebook, which will incorporate broader expansion of Indian eCommerce platforms like Meesho, which Facebook also acquired last year.
India, and its 1.4 billion citizens, is the next key battleground for the tech giants, with both Facebook and Google both working to gain a foothold in the Indian market in order to expand their audience base, provide new business tools, and build revenue-generating partnerships that will facilitate significant opportunities to expand their respective empires.
The developing region is on the cusp of hitting the next stage in tech adoption. India is now the world’s second-largest smartphone market after China, while the number of internet users in the nation is expected to top 850 million by 2022. For comparison, the US is expected to reach around 300 million internet users at the same stage.
Given this, the tech company that can best position itself in the Indian market stands to win out big time as Indian users adapt to how they live and work incorporating online means.
Facebook's deal for Jio is a massive win in this respect, and while past efforts like its Free Basics program haven't been welcomed by Indian regulators, it would appear that Facebook has found a new opportunity, which will be a key element in the platform's growth strategy moving forward.
That will also, eventually, facilitate new opportunities for businesses looking to connect with the Indian market, as Facebook moves to provide more business tools.