Jio-Facebook’s platform approach can unlock India’s digital ecosystem and address a large market that may potentially be $2 trillion (around Rs 151 lakh crore) by 2025, across commerce, payments and content, Bernstein said in a report.
Customer behaviour will see permanent shifts to higher digital adoption in e-commerce/online grocery, digital payments and digital content from Covid-19, it said.
“Reliance Industries and Facebook are building an ecosystem (10 key services) each big enough to provide important and discrete services to the consumer. The core services of the platform are retail/commerce ($1.3 trillion), payments ($700 billion), content / advertising /others ($70 billion) with an overall potential addressable market of $2 trillion plus by 2025,” Bernstein said.
A platform approach can unlock the digital ecosystem, as India has the second largest internet users (600 million plus), fastest growing ecommerce (30% annual growth), second largest smartphone users (700 million plus), deep payments network (1.5 billion transactions per month).
“Platform business models have had success in China. For Alibaba, e-commerce (63% share) helps fully capture the digital advertising market (33% share) and digital payments (50% share). RIL and FB could capture a large market share across services (commerce, payments, content and advertising),” the report said.
Jio and WhatsApp will have access to over 500 million customers in India.
“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.
It said e-commerce/online grocery, digital payments and digital content “will be net beneficiary from COVID”, and added that customer behaviour will see a permanent shift towards higher digital adoption across these categories and benefit the Jio/FB digital platform.
In April this year, Facebook announced an investment of $5.7 billion to buy 9.99% stake in the firm that houses Reliance Jio. This deal will help billionaire Mukesh Ambani create an e-commerce giant that could rival Amazon and Walmart by linking local kirana stores and consumers over the highly popular chat service WhatsApp.
Experts believe that the largest foreign direct investment (FDI) in the technology sector in India will give the US social-networking giant a broader foothold in its biggest global market.
In fact, over the past few weeks, Jio Platforms has raised a staggering Rs 97,885.65 crore from marquee technology investors including Facebook, KKR, Silver Lake Partners, Vista Equity Partners, General Atlantic, Abu Dhabi Investment Authority (ADIA), and Mubadala.
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