Woah! Reliance, Facebook Making A Super-App For Shopping, Gaming, Social Media, Tickets!

Woah! Reliance, Facebook Making A Super-App For Shopping, Gaming, Social Media, Tickets!

Woah! Reliance, Facebook Making A Super-App For Shopping, Gaming, Social Media, Tickets!

Reliance Industries and Facebook are exploring the possibility of creating a multipurpose app, said four people in the know of the matter.

Read to know more…

What is the Fuss About?

As per reports on March 24, Facebook was eyeing a multibillion-dollar stake in Reliance Jio. The report said Facebook could pick up 10% in Reliance Jio for ‘billions of dollars’.

As per the ongoing discussions, the idea is to create an app that will not just provide means of communication but  also where the customers will be able to buy groceries through Reliance Retail stores, or shop at ajio.com, or make payments using JioMoney.

However the discussions and the project have been delayed due to COVID-19 pandemic.

The idea will be leveraged by the WhatsApp platform and user base. 

What is the Idea Exactly?

The aim is to create a competitor app to the Chinese super app, WeChat. 

The project will combine digital payments, social media, gaming as well as flight and hotel bookings, among other features. 

Such a super-app would provide a two-fold benefit —will allow Reliance Industries Limited’s (RIL) consumer business to engage with the users and provide RIL insights on the spending habits of the users.

The idea if brought into action can bring a boom to Reliance Industries!

What is the Progress So Far?

Commercial due diligence for the project is currently on. The top consultants and lawyers based in the US are exploring all aspects like IPR, tax issues among others. 

The specifics are not yet final as the company is exploring various structures. All the people ET spoke to said the situation is fluid, and that it is still unclear how the final structure would look like.

The investment banker appointed is Morgan Stanley.

A person with direct knowledge of the matter said, “The negotiations are being compartmentalised. So, someone working on the commercial side wouldn’t know what’s happening on the technology or the financial aspects of the deal.”

Another person said,  “This is going to be a defining partnership, and it’s not just a financial investment. The deal is about creating value and a business that would differentiate both Facebook and Reliance.”

A person part of a team working on the deal said, “A new company could be created — where both the players could invest; or Facebook could invest in Reliance Jio and Reliance Retail, and that is the way the partnership could be formed for the new venture.”

A third person said, “There is going to be a collaboration, but it’s not clear how the companies will come together since a lot would depend on commercial viability and the technical knowhow both the players would bring in.”

Deal Delayed Due to COVID-19 Pandemic!

The travel bans due to COVID-19 Pandemic have slowed down the process. A person close to the development said,  “The priority for Reliance Retail right now is to keep stores running so that consumers get supplies. Also, there are travel restrictions right now, which create problems.”

The executive said Reliance Industries has publicly said the company was looking to raise money for Reliance Jio and Reliance Retail.  He said, “It doesn’t matter whether the money comes from one investor or another.”

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