BT Buzz: With kiranas, SMEs and data, Jio Platforms to unleash a new e-commerce war
Reliance Industries has been raking in large deals when corporations are struggling to survive - all with a bigger plan in mind, which can even propel Mukesh Ambani into the trillionaire club
- May 20, 2020,
- Updated May 21, 2020 1:06 PM IST
How do you kill two birds with one stone? Ask Mukesh Ambani, the Chairman and Managing Director of Reliance Industries (RIL). As global corporations are fighting a survival battle, Ambani has managed to pull off four large deals with Facebook, General Atlantic, Silver Lake, and Vista Equity Partners in the past few weeks. Through these investments, Reliance has raised a whopping Rs 67,195 crore - a large chunk of which will go to retire RIL's huge debt. Simultaneously, the deals have also propelled RIL's next growth phase: the $700-billion 'new commerce' opportunity.
In July 2018 when Ambani first announced the 'new commerce' venture, he said that it has the potential to redefine retailing in India and become one of the biggest new growth engines for Reliance in the years to come. Essentially, new commerce is an integration of RIL's digital and physical marketplaces, and the idea is to leverage the company's entire distribution stack to tap the large universe of MSMEs, farmers, and kiranas. With the Facebook deal, Ambani expects to leverage the wide reach of Facebook-owned WhatsApp to speed up the new commerce business.
So while Reliance has many apparent upsides from the deals, what's in it for its four global partners? The deals with General Atlantic, Silver Lake and Vista are more strategic that could benefit them if the valuations rise in the future as more investors join the Jio party. The partnership with Facebook, on the other hand, is deeper because it intends to explore mutual opportunities in areas like e-commerce and the offline-to-online (O2O) segment which has suddenly been gaining traction in the COVID-19 situation. It's clear that the stakes are really high for Facebook as compared to the other three, but in a way, they will all benefit if Ambani could execute his plans.
How do you kill two birds with one stone? Ask Mukesh Ambani, the Chairman and Managing Director of Reliance Industries (RIL). As global corporations are fighting a survival battle, Ambani has managed to pull off four large deals with Facebook, General Atlantic, Silver Lake, and Vista Equity Partners in the past few weeks. Through these investments, Reliance has raised a whopping Rs 67,195 crore - a large chunk of which will go to retire RIL's huge debt. Simultaneously, the deals have also propelled RIL's next growth phase: the $700-billion 'new commerce' opportunity.
In July 2018 when Ambani first announced the 'new commerce' venture, he said that it has the potential to redefine retailing in India and become one of the biggest new growth engines for Reliance in the years to come. Essentially, new commerce is an integration of RIL's digital and physical marketplaces, and the idea is to leverage the company's entire distribution stack to tap the large universe of MSMEs, farmers, and kiranas. With the Facebook deal, Ambani expects to leverage the wide reach of Facebook-owned WhatsApp to speed up the new commerce business.
So while Reliance has many apparent upsides from the deals, what's in it for its four global partners? The deals with General Atlantic, Silver Lake and Vista are more strategic that could benefit them if the valuations rise in the future as more investors join the Jio party. The partnership with Facebook, on the other hand, is deeper because it intends to explore mutual opportunities in areas like e-commerce and the offline-to-online (O2O) segment which has suddenly been gaining traction in the COVID-19 situation. It's clear that the stakes are really high for Facebook as compared to the other three, but in a way, they will all benefit if Ambani could execute his plans.