Why Investors Are In Love With Jio

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In the past five weeks, amid global economic turmoil, some of the world’s largest investors have poured a combined $10 billion into Jio Platforms, an Indian tech company poorly understood outside the country. But why — and why now?

Sanchit Vir Gogia, CEO of Greyhound Research, told Protocol that RIL’s tech ambitions have always been huge. Just as RIL has tentacles in every part of the offline world, it wants to be omnipresent online, making money wherever consumers spend it. But first, Indians had to actually be online. “Jio understood that the India problem was the connectivity problem,” Gogia said. “The connectivity was so patchy that it was impossible to get all of India online, unless the connectivity problem was solved. So they went after that problem first.”

“Ultimately, the idea is that if as a customer you’re on the Jio network, they want you to spend every single dollar that you potentially spend outside, on their network,” Gogia said. It’s akin to the WeChat model in China: Provide a wide range of services, with synergies between them, so that consumers can live their entire digital lives within one walled garden.

Facebook’s been trying to fix that for a while, with WhatsApp Pay one notable attempt. But it has encountered major regulatory difficulties, which Gogia partly attributes to the company’s limited on-the-ground experience in India. After all, Facebook’s other big attempt to crack the Indian market with Free Basics, which provided free internet, but only for certain services, was banned. Even if Facebook did get approval for WhatsApp Pay (which is currently under review by antitrust authorities), it would be incredibly challenging to scale. “Had Facebook had to do the entire last mile delivery [and] supplier onboarding themselves,” Gogia said, “the journey in terms of growth would be nearly impossible.”

It’s not going to be easy. While Jio wants to be the WeChat of India, executing on that will be tough, not least because Jio is late to the party. Whereas Tencent entered the Chinese ecosystem when it was mostly undeveloped, the Indian market is already very fragmented. “Category leaders have been established,” Gogia said. “Entering the category now will be back-breaking and a very expensive task.”

[Protocol]

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.


Analyst:

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.

Have a question on this or other Technology & Innovation topics? Click here to set up an enquiry call with Sanchit Vir Gogia.


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