Business

Jio-FB deal piling FOMO on Amazon and Google

New Delhi, June 5 (IANS) The fear of missing ou (FOMO) is putting incremental pressure on tech

biggies, Google and Amazon following the deal between Reliance Jio and Facebook.

According to a research by US financial services house, BofA Securities, the Jio-FB partnership focuses on two core areas create a WeChat equivalent Super-App in India on the WhatsApp platform and hence monetize via payments and commerce along with higher ad revenues; and online ordering of grocery and other items like medicines, etc. by establishing a commercial agreement between FB and Reliance Retail.

The report said the former has the potential to impact Google as it is FB’s biggest competitor in India on ad & payments) and the latter could impact Amazon as it could make Reliance-FB a direct competitor to Amazon India.

“If media articles are correct, we believe both Google & Amazon could also be looking to fortify their positions by partnering with other telcos with an intention of not “missing the bus” in a scenario in which FB-RIL monetization gains traction, or the FOMO (fear of missing out) factor”, the report said.

After Facebook acquired a 9.99% stake in Indian telco Jio (a subsidiary of RIL), media articles have suggested that the two other Indian telcos are could also attract interest from US tech giants.

As per recent media articles (unconfirmed), Google is looking to buy a 5% stake in Vodafone Idea and Amazon is looking to buy a stake worth $2bn in Bharti Airtel.

Tech giants like FB, Google and Amazon are very focused on India as the fastest-growing internet market with 650 million users, the second highest in the world.

With fixed broadband penetration at only 6.6%, most of these users are serviced by cellular telcos. By partnering with telcos, tech cos would be better placed to offer unique digital offerings and potentially monetize them in a win-win scenario.

For Internet companies, getting access to users is likely a priority (i.e., Google has encountered some obstacles on Apple phones and with certain carriers). There is also the potential that direct investment in India could accelerate 5G rollout (aiding Internet usage).

In India’s digital ad revenue market – Facebook and Google the largest competitors and in the e-commerce market – Amazon is the biggest competitor to Jio-FB partnership.

–IANS

san/in

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