Amid pandemic, investors bet on India’s Jio

Commuters use their mobile phones as they wait at a bus stop with an advertisement of Reliance Industries' Jio telecoms unit, in Mumbai, India

From its Silicon Valley-like campus near Mumbai, Indian billionaire Mukesh Ambani’s Jio telecom carrier is emerging as a winner from changes in the way Indian consumers plug into a digital economy made more urgent by the coronavirus pandemic.

For Indian shoppers who prefer to order online, it is launching a grocery ordering service with Facebook Inc’s popular WhatsApp messaging. For Bollywood fans who would prefer to avoid a crowded theater, it is readying same-day-release on the Jio platform.

Those plans had been in the making for months, but the pandemic has given them a shot in the arm. India’s 10-week lockdown has also led to a surge in demand for data, boosting Jio’s phone and broadband offerings.

And, over the past six weeks, the digital business of Ambani’s Reliance Industries Ltd, known as Jio Platforms, raised a striking $10 billion from global investors.

The investments, including $5.7 billion from Facebook and money from private equity firms Silver Lake, Vista Equity Partners, General Atlantic and KKR & Co Inc, value Jio Platforms, where Reliance last year announced it was consolidating its digital offerings, at roughly $65 billion (51.6 billion pounds).

They also put Jio on track toward a goal Ambani described last year: an eventual listing that would mark a milestone for his effort to unite the digital offerings of his sprawling conglomerate, from set-top boxes to e-commerce and home automation.

Interviews with a dozen people familiar with the company’s development efforts show how Reliance has pushed aggressive pricing for a one-stop digital commerce platform that incorporates features modeled on the American tech heavyweights it sees as rivals.

When Jio set out to launch a set-top box, it tasked a team with analysing – and in some cases replicating – some 100 features of an Apple TV set-top box last year, according to a person close to the project and internal Jio documents seen by us.

“Presentation and listing of menu items should be similar to Apple TV,” one of the documents says, assigning the task a “Priority 1” rating.

One document compares the products’ features, like average weight. Another includes instructions like “Matching the background theme of Launcher (home screen) to that of Apple TV.”

Jio’s set-top box comes included in its broadband plans, with the cheapest annual deal costing around $110, whereas Apple TV 4K is selling for around $210 to $230 on Indian e-commerce sites.

Apple Inc did not respond to requests for comment.

Jio also analysed Amazon’s Alexa voice assistant with the aim of coming up with its own offering, according to one person with knowledge of Jio’s strategy. “They wanted to say: ‘Hey Jio, can you switch on the lights?’,” said the person.

In other areas, Ambani has shown a willingness to bet big on emerging technology. In India, Jio was an early adopter of voice-over-LTE, which is more efficient than traditional networks. The company expects that to give it an edge in rolling out 5G services.

“Few companies have the potential to transform a country’s digital ecosystem in the way that Jio Platforms is doing in India,” said KKR’s co-founder Henry Kravis in announcing his investment.

In partnership with Facebook’s WhatsApp, Reliance has launched a new service that allows consumers to order from their local grocery stores at a time when many Indian consumers, like shoppers elsewhere, are trying to minimize trips to stores. The service was rolled out in April in three areas of Greater Mumbai.

“Reliance wants to be a global technology powerhouse,” said Rahul Malhotra, an analyst with Bernstein. “With the Facebook partnership, they will build the WeChat of India,” he added, referring to Tencent Holdings’ messaging, payments and social media app that is ubiquitous in China.

Was it worth reading? Let us know.