A lot has been written about Jio Platforms and how RIL has created history by attracting investments worth INR 1 Trillion in less than 2 months. While RIL has been hugely successful so far with Jio, a large part of what the company is attempting remains to be work in progress and not all is hunky-dory. We at Greyhound Research believe it’s still too early to comment whether or not RIL will be able to land fully on the objectives it has set out for Jio Platforms and some very real and practical challenges lie ahead for the company.
Below are some challenges we believe can be expected here on:
1/ Data Privacy – With services being combined under one umbrella, two outcomes are certain – a) single identity (JioID) will capture all personal data like password, retina and fingerprint. b) data monetisation will be a norm hereon. Not all users will be comfortable with this approach.
2/ Category Leadership – Jio apps have received mild response and none are category leaders. In fact, RIL acquired Saavn to attain leadership in music streaming. With category leaders established, RIL will find it difficult to gain mindshare.
3/ New Entrants – Despite Facebook and Instagram, Facebook has lost critical user-base (youth in Tier 2 and Tier 3 towns) to TikTok. Despite attempts to use Instagram and WhatsApp Stories, Facebook has failed to attract these users.
4/ WeChat Aspirations – With JioMart and ability to use WhatsApp for Currency (payments), it is being touted that Jio is trying to develop a WeChat like model for India. While it’s definitely doable, not all consumers are still hands-on with using mobile apps and bandwidth is still a constrain. Also, category leaders will be difficult to displace.
5/ Supply Chain – is a critical success factor in commerce and a weak link for RIL across both upstream and downstream especially in warehouse management and last-mile delivery.
6/ Competitive Investments – Both Amazon and Google are supposedly exploring investments with Bharti Airtel and VIL. Also, both also have a thriving ads business. While Amazon’s eCommerce dominance is tough to battle, Google’s muscle with search and deep pockets will mean a tough battle.
7/ Antitrust Issues – Walled gardens like Amazon, Google and Facebook have been questioned on business practices, marketing dominance and the potential of data abuse. RIL/Jio Platforms has a similar setup, and issues can be expected.
8/ Integration Challenges – With a myriad of moving pieces laced with technology complexities, integration across offerings and assets is a rather tall ask. For a WeChat like model to come true, seamless integration is a foundational bedrock.
9/ Fresh Investments – RIL’s intent with Jio Platforms is to build it as a global leader in digital platforms. For this to happen in real, it will require RIL to make investments in new technology like 5G, acquisition of category leaders and feet on street. While the existing investments will help wipe off previous debt, new investors and an IPO is a critical ask in near future.
10/ Organisational Culture – Digital Platforms is a brutal game and a company can have all the resources but if it fails to deliver exceptional customer experience it’s a losing battle.
P.S.: For more information on the recent investments, value that each investor brings to Jio Platforms, engagement with Microsoft, impact on Bharti Airtel, and the challenges the company can expect, read this research report by Greyhound Research.
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.
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