Rahul Tekwani
Apr 23, 2020

Opinion: Facebook, Reliance Jio partnership - reading between the line

Will the stakes in Mukesh Ambani’s Jio lead the revival that Mark Zuckerberg is looking for Facebook India?

Opinion: Facebook, Reliance Jio partnership - reading between the line
Off late, Facebook, the global social media colossus has faced major challenges in its biggest market-India. The Silicon Valley giant currently has close to 346 million active users in India and the tally is estimated to reach almost 450 million in the coming three years. But the major challenge for Facebook is sustenance and whether it will be able to achieve high growth numbers as the social media platform has faced major controversies over its India operations. 
 
Facebook has enjoyed double digit growth in India due to proliferation of cheap internet plans and the expansion of internet in rural India. India has 600 million active internet users and close to 300 million users come from rural India. Facebook eyes the rural Indian market as an opportunity to grow its own user base. And with Mark Zuckerberg recently finding a good pal in the Indian industrialist Mukesh Ambani, the company might look to leverage Reliance Jio to expand its reach in rural India.  
 
The Nasdaq listed script needs to overcome few challenges to explore the road of opportunities in India
 
Facebook has been targeted with the accusation of spreading fake news from time to time and which has made the app lose credibility in the recent past. They need more initiatives to curb fake news as quite a large number of the internet audience in rural India is using social media for the very first time and tend to believe whatever content they come across.
 
Amid the fake news menace, the slow growth in payment unit business and data privacy issues, Facebook India has faced some major competition from the group products like Whatsapp, Instagram and especially from the Chinese platform Tiktok. in terms of division of users and revenue competition from Google’s YouTube. 
 
Even though YouTube’s advertising revenue is fairly small compared to that of Facebook, the online video platform has seen a terrific growth in the last two years and a huge amount of digital marketing spends have been diverted towards YouTube.  
 
India has the largest chunk of over 300 million users of WhatsApp from the 1.5 billion user base that the platform has across 180 countries. 
 
With better story integration and engagement, Instagram is giving serious competition to Facebook. With rising ad spend by brands on Instagram and rapidly increasing influencer marketing, it is giving a tough time to FB in India. 
 
TikTok is now a serious cause of concern to Zuckerberg. Tiktok was the most downloaded app of 2019 and statistics suggest that more teenagers are on Tiktok now than on Facebook. In today’s world, advertisers say, that Tiktok leverages its short-video platform service to create great user engagement.
 
Facebook holds the largest share of social video ad spends and the giant is believed to counter Tiktok with its humongous user base. Facebook is also aggressively investing to build the video streaming experience across genres which will lead to larger engagement and help the Facebook communities around it. 
 
Will the stakes in Mukesh Ambani’s Jio lead the revival that Mark Zuckerberg is looking for Facebook India?
 
The world’s largest social media business invested $5.7 billion (Rs. 43,573 crore) for a 9.99% stake in India’s Reliance Jio platform, the biggest telecom operator in the country with more than 370 million subscribers. This investment will give an upper hand to Reliance Jio and Facebook to be the market leader in the social commerce and retail businesses. 
 
As mentioned by Zuckerberg in his address, “India is home to the largest communities on Facebook and WhatsApp, and a lot of talented entrepreneurs. The country is in the middle of a major digital transformation and organizations like Jio have played a big part in getting hundreds of millions of Indian people and small businesses online.” Facebook can leverage its full potential of being the most successful digital platforms for small and medium businesses (SMB) with close to 90 million using the app, according to reports. The company is learnt to have launched a Business Resource Hub to mentor SMB users on how to manage through and build resilience during the coronavirus outbreak.
 
But even with the investment in Jio it is believed that Facebook needs to immediately correct few things to gain attractive returns from its India business, with a huge chunk of internet population in India consuming content in their native language. Facebook has to do a lot in framing it policies in India. Facebook needs to leverage its user base and access to content from multiple publishers’ advantage to take its Indian business to the next level.
 
And, as India moves heavily towards digitisation it is believed that the 2024 prime ministerial elections will witness an excessive use of social media as a tool of promotion to influence the vote bank. Considering this, Facebook needs to come clean in front of the Indian government from whom they have faced heat over data privacy and ensure that it doesn’t get into another Cambridge Analytica affair in India.
 
If Facebook is able to meet all the government policies requirement now, by using Reliance’s political and policy influence, the company will be able to realize its full potential in India and will be headed for a new growth story with the big digital revolution lined up in India.
 
(The author is group brand manager -planning at Enormous Brands)
 
Source:
Campaign India