The E-Commerce AI and Data Angle of Facebook Jio Deal

Facebook 's investment in Jio amounts to Rs 43,574 Crores, which is enough to send Chandrayan 44 times into space and more. This huge amount of money is not being pumped into  Jio only because Reliance wants to get part of its huge debt offloaded. There is more to this investment, being termed as the largest FDI in recent times that an Indian organisation has got.

"Facebook has over 400 million WhatsApp users in India and it has been wanting to launch a payment app in the country for quite some time, but it has faced lot of challenges because of privacy issues. Having a local partner could help in navigating various regulatory issues, including those related to privacy and local storage."

--Shyamala Venkatachalam, Founder, The Remediation Company

“The synergy between Jio and Facebook will help realise the ‘Digital India’ dream with its two ambitious goals — ‘Ease of Living’ and ‘Ease of Doing Business’ – for every single category of Indian people without exception. In the post-Corona era, I am confident of India’s economic recovery and resurgence in the shortest period of time. The partnership will surely make an important contribution to this transformation."

--Mukesh Ambani, Chairman & MD, RIL

Facebook has more than 400 million members in India and  has one of the best data analytics and AI system in the world. However, its subsidiary Whatsapp is better than Facebook in attracting huge amount of data. Facebook has ambitions to launch an E-commerce platform in India. For this, it wants to start a payment app on Whatsapp, which is being delayed because RBI is worried about the security issues involved. Reliance also has JioMart , through which it wants to integrate the local provision shops (kirana shops). For this, it wants to use the  cutting  edge data analytics and AI ability of Facebook to get details about consumer interests and behaviour.

Because of all this, Facebook needs a large  Indian partner like Jio which holds 34% of the Indian mobile network market  and Reliance needs a large investor-cum data analytics and AI expert like Facebook to integrate the local kirana shops and other SMEs on its E-commerce platform. This way, they hope to give a competition to Amazon and Flipkart.

Hence, this large deal which enables the two organisations to launch their E-commerce ambitions through Whatsapp. The offloading of Reliance debt is only a small part of the game. There's a much bigger game being played in this deal.

Time for the traditional channel community to come on E-commerce platforms rather than leading a campaign against them.