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Is Reliance Jio Shaping the Future of Digital India?

With a slew of strategic investments, India's richest man Mukesh Ambani is fast becoming the face of digital India

Reliance Jio

India’s struggle against the COVID-19 pandemic hasn’t stopped the deal making spree at Reliance Industries. As the country slows down, Mukesh Ambani’s conglomerate by sales and market capitalization has only seemed to speed up. In fact, some critics point out that Reliance has already become the face of Digital India, the mega campaign launched by the Narendra Modi government, a year after it came to power.

Face of Digital India

Since Facebook announced in April that it would invest $5.7 billion to buy 9.99% of its digital business unit – Jio Platforms – a string of global tech companies and financial investors have followed suit. In a span of 12 weeks, it wooed global investors including Silver Lake, Vista Equity Partners, General Atlantic, KKR, L Catterton, TPG, Mubadala and Abu Dhabi Investment Authority, taking the total investment in the digital services platform to $13.7 billion. The most recent big ticket investor in Jio Platforms is American semiconductor giant Intel which announced an investment worth about $250 million in Jio Platforms, with news abuzz that Reliance is looking to develop 5G hardware in-house for its mobile network.

It is little wonder then that the billionaire chairman of Reliance Industries and India’s richest man believes that his company can become a “consumer-facing tech behemoth for a digital age”.

Now, reel back to the financial year ending March 2015, when less than 2% of Reliance’s earnings came from its digital and retail businesses. Ambani’s vision that the company could generate 50% from digital business in 5 years seemed rather ambitious then. But what changed its growth trajectory was the launch of Reliance Jio in September 2016.

A technology platform company

Reliance Jio caused widespread disruption in the otherwise muffled telecom sector in India by offering the superfast 4G services that included free calls and cheap data packages.

That war of attrition prompted its rivals to either exit or merge with others, leaving only three private carriers – Reliance Jio, Bharti Airtel and Vodafone Idea – from about a dozen a few years ago – and attained the top position in terms of market share with over 388 million subscribers.

To add to its mobile dominance, Jio in September began rolling out fiber-to-the-home high-speed connectivity. At present, Reliance owns TV channels and cable TV operators that distribute content through Jio. Similarly, its physical retail network — the group is India’s largest retailer — is being connected and expanded online.

Read more: Is Jio Set to Monopolize India’s Telecom Sector?

Today, Jio’s technology umbrella already includes broadband services, smart devices, cloud and edge computing, big data analytics, artificial intelligence, internet of things (IoT), augmented and mixed reality and blockchain, thereby slowly and steadily reinventing itself as a technology platform company.

Shaping the Digital Future

Ambani further reshapes Reliance for digital India with Jio deals a slew of new deals this year, with global investors lining up to buy shares of Jio Platforms, as he said in a statement, “We are extremely delighted to deepen our ties with technology leaders that embody our vision of transforming India into a leading Digital Society in the world.”

Reliance Jio is now being placed in the center of a digital platform to drive the group’s growth into e-commerce, payments and online entertainment. For example, the Facebook deal gives Jio Platforms access to WhatsApp as the platform for pushing JioMart, its digital commerce platform. With the phenomenal rise of WhatsApp users in India, the vision for this project is to bring the nearby stores to consumers on WhatsApp. JioMart is now extended JioMart to 200 cities including all metros. With millions of these small merchants and Kirana stores across the country, Ambani sees “a $700 billion opportunity out there.

This also fits in perfectly with the Government of India’s push for digital payments, and particularly mobile payment, as part of the Digital India mission. Experts believe, foreign players in these segments, including Amazon, Alibaba’s Paytm, and Walmart’s Flipkart, will need to carefully watch this dangerous alliance.

Laura Petrone, Senior Analyst at GlobalData places Reliance Jio along with Amazon and Netflix that are leading the COVID-19 theme, which allows them to capitalize on their strong position in ecommerce and video streaming.

The company also jumped into the videoconferencing market this week by launching a homegrown video calling solution – JioMeet to take on the likes of Zoom, Microsoft Teams and Google Meet etc, and all this amid the calls of making India self-reliant. Also, there couldn’t have been a better timing, considering the coronavirus-outbreak has made remote working a key part of the new normal lifestyle and increased demand for remote collaborating and video-conferencing solutions.

Read more: JioMeet: Indigenous solution with an “inspired” implementation

Shifting to a new world order

Analysts believe, in shifting Reliance toward a digital model, Ambani wants to improve the way his empire is valued. For years Reliance, founded by Ambani’s father, Dhirubhai Ambani, in 1966 as a textiles business, was an archetypal “old economy” concern, from its Jamnagar oil refinery to textiles and petrochemicals segments, Reliance excelled in almost every field it touched.

SP Tulsian, an independent investment adviser informed Nikkei Asian Review that there are some investors who do not like old economy stocks but still hold Reliance shares, regarding it as a proxy to Jio. Tulsian said, “Ambani is a man who knows the pulse of the market. And he knows digital is the way to go!”

According to Petrone, Reliance which spent tens of billions of dollars building out Jio now needs to pay off its debts. The new investments will allow the conglomerate to focus on the digital part of the business, which is the most promising. While the oil refining business still accounts for the bulk of the company’s revenues, it has been hit hard by the fall in oil prices and demand.

“Mukesh Ambani has had this vision to vertically integrate multiple sectors and do digital cross selling across those sectors since long before he launched Jio,” Sanchit Vir Gogia, chief analyst and CEO of Greyhound Research, an independent technology industry research firm mentioned in his blog. “What they are trying to do is connecting each vertical built with physical assets onto the digital platforms, and then connecting different verticals through the digital platforms. I call it ‘phygitization’ — a combination of physical assets and digitization.”

Ambani has now set his sights on another industry: financial services. On April 30, Reliance quietly announced financial services as its newest business segment. Some took it as the latest sign that Reliance wants to become an Indian version of Alibaba, the Chinese e-commerce giant founded by Jack Ma, one of the few who rivals Ambani on Asia’s rich list. As Gogia already predicted Ambani’s next big thing will most likely be the financial sector. “With that accomplished, Reliance will look bigger than Alibaba,” he noted.

Once digital and retail businesses reach 50% of group cash earnings, Mukesh Ambani will be able to declare he has molded the family business according to his own vision. “Our vision is always rooted in furthering India’s inclusive and accelerated growth, propelled by the adoption of digital technologies, that helps improve the lives of 1.3 billion Indians… our shareholders endorses this vision and mission. Their support further strengthens our resolve as we firmly set forth to build a New Reliance for a New India,” he said in a statement.

And while it’s too early to comment on the success of each of these ventures, they are a testament that businesses that show a promise of great value will continue to attract the right valuations. While Ambani takes Digital India to a new high, it might not spell the end of the reshaping of Reliance. It would be interesting to see how the story unfolds to define India’s digital economy for the decades to come.

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Sohini Bagchi
Sohini Bagchi is Editor at CXOToday, a published author and a storyteller. She can be reached at