Why Google and Facebook need Mukesh Ambani to win in India – Quartz India
Last week, Google announced an Android smartphone in collaboration with Reliance Jio, the phone company run by India’s richest man Mukesh Ambani.
The two companies have a common vision “to provide affordable access to information for Indians in their own language, to create new products and services for India’s unique needs and to equip companies with technology”, Google CEO Sundar Pichai wrote in a June 24 statement. blog post. Once again, the giants of Silicon Valley are asking Ambani for support to ensure their sustainability in India.
The failure of Free Basics
This Google-Jio collaboration recalls the unsuccessful attempts of another global giant to secure the vast Indian market: Facebook and its Free Basics project.
In February 2015, the company run by Mark Zuckerberg launched Internet.org (later Free Basics) in India – interestingly, in partnership with Reliance Communications, which is run by Anil, Ambani’s estranged and penniless brother – to improve internet access in India, he said. . After net neutrality activists criticized the offer, Reliance Communications suspended the service in December of the same year. Days later, Zuckerberg exposed his disbelief in an op-ed, wondering aloud “who could be against this?” “
India’s telecommunications regulator, that’s who. The problem, unlike Google-Jio’s subtle push, was that Facebook’s platform was clearly limiting. It only allowed 36 favorite sites to be accessed and Facebook was the only social network available. The company tried to partner with local Indian platforms such as recruiting site Hiree.com and payments giant Paytm, but they did not participate.
âThe Jio-Google partnership is more about leveraging the Android ecosystem and services to create affordable smartphones for users. The ISP will most likely be Jio, but users should also be able to have other providers over time, âYugal Joshi, vice president of consulting firm Everest Group, told Quartz. “Therefore, this initiative is quite different from that of Facebook, where people were more concerned about Internet ownership.”
While not integrated like Free Basics, it would be naive to believe that Google and Jio won’t grow their own ecosystem, experts say. But a small nuance combined with Ambani’s blessing can go a long way in India, a country where big billionaires cede enormous power over Narendra Modi’s government.
Google phones with Jio products
The Google-Jio phone will allow users to “use their Google Assistant to provide a great experience with many Jio applications on this device.” In addition to requesting the latest cricket scores or a weather update, users can also ask Google Assistant to play music on JioSaavn or check their balance on My Jio, âthe June 24 note said.
The Jio ecosystem offers a plethora of services, from the JioTV video on demand app to the JioMart online grocery app to the JioMoney digital payment platform. Jio also has its own individual apps for messaging, video conferencing, file sharing, cloud storage, web browsing, apartment security, health monitoring, online gaming, and news.
These bundled apps, along with Jio’s low prices, will serve as bait for consumers, experts say. But they will not be overtly restrictive. Thus, while the coming together of the two forces may raise competition concerns, net neutrality is unlikely to be violated.
What’s also reassuring for Google is that this deal is much less volatile than the one Facebook struck five years ago. After all, there is a lot of money at stake. In July 2020, Google invested $ 4.5 billion for an almost 8% stake in Jio.
âWith Google taking a multibillion dollar stake in Jio Platforms earlier and expanding its Android and other teams in India working closely with Jio, this partnership is markedly different from others in the past,â Joshi said.
For Facebook, which injected $ 5.7 billion for nearly 10% of Jio’s capital in April 2020, the objectives have changed. Bringing Free Basics to India is no longer a priority. But he has other plans.
The symbiotic relationship between WhatsApp and Jio
Facebook is relying on Jio to secure the future of its WhatsApp messaging in the country.
Despite concerns about fake news, Pegasus spyware and data privacy, WhatsApp “has long emerged from the shadows of Facebook and is an integral part of popular Indian consciousness,” says Salman Waris, partner at law firm TechLegis . âThe Mark-Mukesh deal once again underscored the authority of WhatsApp in India. Considering that India is the home of WhatsApp, and by extension the largest user of Facebook, it can be said that Facebook’s trip to India was only facilitated by the Reliance associations.
The greatest proof of this is its payment product.
The messaging app began testing its payment function in India in February 2018, but two years later it still lacked regulatory approvals for a full-fledged launch. However, after Ambani started rolling out a JioMart integration on WhatsApp in April 2020, the cogs of the Indian regulatory machine started to spin faster.
Although limited to 20 million users, or only 5% of its total user base in the country, WhatsApp was finally able to launch payments in India in November 2020.
Now Jio helps to integrate not only customers but also kirana stores (small convenience stores) on the courier service. And JioMart is just the start. In June of this year, Jio also started offering a top-up service on WhatsApp.
There’s sort of a âsymbiotic relationshipâ between Reliance and Facebook, says Waris. âReliance aims to use the massive influence of WhatsApp in India, and Facebook wants to power its digital transaction and payment functionality through WhatsApp using the Reliances customer base in the country,â he said. “Facebook may also be eager to collaborate with an Indian surname in an attempt to avoid the scrutiny it received earlier with Free Basics.”
Global giants are learning that traveling solo in India is difficult. Especially since the government banned more than a hundred Chinese apps last year and took US giants like Google and Amazon to court over antitrust issues. As calls for protectionist measures grow louder, getting the good graces of Ambani, who is in the government’s good books, is a big help. With him by their side, American companies can probably maintain their grip on the market, regardless of changing laws.