Facebook-Jio deal to Turn WhatsApp into Super App like WeChat in China

On April 21, US social media giant Facebook announced a $5.7 billion(Rs 43,574 crore) investment in Jio which is India’s youngest but biggest mobile operator. The race to become India’s top superapp has kicked into high gear. Facebook and Jio plan to transform India’s most popular app WhatsApp, with about 400 million users, into a Super App. It poses a new challenge to Paytm’s plan to be the leading super app in India.

Southeast Asia’s most powerful startups like Grab and Gojek are trying to grow into superapps themselves by adding payment services, food delivery and more to their main ride hailing functions. The success of WeChat and Alipay in China as multipurpose superapps have been one of the biggest influences on mobile-service startups around the world. These platforms have integrated chat functions, payment and financial services, online shopping and so on.

On April 26, less than a week after the announcement, Jio’s grocery shopping service, JioMart opened a business account on WhatsApp. It connects WhatsApp users to JioMart through automated text messaging. Although JioMart has started the service only in several urban areas in Mumbai, soon they will start the services throughout India. But the tie-up is more than a combination between the world’s biggest social network and India’s biggest mobile network.

Since its launch, Jio has released a variety of mobile apps, including video and music streaming, chat, payment services and health care in its short three-and-a-half year history. If WhatsApp will function as a portal to Jio’s various services, that will make it similar to a superapp with payment and shopping functions, competing it against Paytm.

Facebook chief Mark Zuckerberg and billionaire Mukesh Ambani, chairman of Reliance Industries, hinted to make a super app by stating,
" The idea is to create an app that is not just a communication platform but one where users would also be able to buy groceries through Reliance Retail stores, or shop at ajio.com, or make payments using JioMoney."

What is a Super App?

A Super App is many apps within an umbrella app. It is rather an Operating System for smartphones. A Super App offers many features of apps within one app. It’s the portal to the Internet for a mobile-first generation.

A Super App has the intersection of logistics or hyper-local delivery, commerce, payments and social. The idea is to scale fast once you have a user’s buy-in and add multiple services to gain loyalty. Once you have direct offerings, the next logical step is to open the app up to third-party companies to build on a loyal user base. Now, you don’t build separate apps. Instead, you can host your offerings on a single Super App.

Plan to Make WhatsApp a Super App

On April 21, Facebook and Jio made a big announcement. Facebook said that it was investing $5.7 billion in Reliance Jio, acquiring 9.99 % stake in the process that valued Jio at $65.95 billion. From this partnership, Jio and Facebook will surely have plans for future. The whole partnership aims at making WhatsApp, which is owned by Facebook, a sort of super app where users will not only be able to chat but will also be able to buy their groceries and perform other tasks.

In a way, Facebook and Jio plan to turn WhatsApp into a Super App like WeChat in China. By integrating WhatsApp with JioMart, Jio service has brought local kirana stores to online. Thus, they have the first step towards Super App.

In one way, WeChat is a messaging app just like WhatsApp. Users can add as many people to chat with as possible. They can upload images, videos, and also share it with their contacts. The users can comment, like, or react to posts on the app. But then there is a lot more which makes it a Super App. WeChat is called a super-app because it provides all the services under one platform.

WeChat allows its users to transfer money to their WeChat contacts instantly by scanning a barcode. Using WeChat, users in China can shop at some of the biggest supermarkets to the smallest vendors in the country. One can book a cab or book a hotel and flights and even movie tickets. You don’t need to download separate apps.

Now considering India, users require separate apps for ride-hailing, booking hotels, or movie tickets. Some people use Paytm for something, some people use Google Pay. Some people use Zomato or Swiggy for ordering food. The motive behind creating super app is to integrate all these services under one app.

With the launch of JioMart intends to connect 30 million small-scale retailers to local Jio subscribers with free delivery, taking on Paytm. It will also challenge online grocery startups like Big Basket and Grofers, as well as Dunzo. Major conventional supermarkets provide home delivery service as well.


Related: Facebook Invests $5.7 billion in Jio Platforms for 9.99% Stake


Motive behind building Super App

The Facebook-Jio partnership is a lot more than just a combination between the world’s biggest social network and India’s biggest mobile network. The WhatsApp-JioMart combination will function as a multipurpose mobile service targeting hundreds of millions of Indians by building India’s First Super App.

The deal may transform into something similar to the Chinese super app WeChat owned by Tencent Holdings. WeChat has integrated “apps within app” and provides payment, ecommerce, taxi aggregator services, and food ordering. It is achieved by various third-party apps that run on its platform.

The Jio platform already incorporates apps like Jio TV, Jio Saavn , Jio News, Jio Cinema, Jio Cloud, Jio TV+, Jio Health Hub, JioMoney (payment app), RJio (ecommerce) and others. The Jio Platform also has innovative technologies like Big Data, Blockchain and Internet of Things (IoT). In addition, the group is into the business of wired broadband (JioFibre), apart from providing 4G internet and VoIP (i.e. Internet Telephony) services.

Reliance Jio has just launched a new model of the ecommerce app JioMart. If these app services are combined with Facebook and WhatsApp and their 400 million Indian users and their data, JioMart can transform into a giant digital ecosystem. Thus, this deal can result in India’s first globally competitive Super App.

If all goes by planned, the resulting Super App will decrease search cost for the users for any services that they want to avail of. The users will be able to use any service within WhatsApp only. The Super App will enable many facilities by reducing costs for business that transact through the app.

Facebbok-Jio deal will turn whatsapp into superapp
Facebook-Jio deal will offer more than grocery & chatting Platform

Competitors in various sectors

Emerging to be the top application will not be easy. The presence of retail giants like Amazon and Walmart’s Flipkart will surely create intense competition in the retail sector. Similarly, various streaming services such as Netflix, Amazon Prime and Disney+Hotstar will give tough competition to Jio’s streaming and content businesses.

Another biggest threat is telecom players like Airtel and Idea-Vodafone. But they can further loose subscribers due to various bundled services provided by the Super App. Thus, it is possible that there will be stress in the telecom sector, which could lead to failure of existing players.

In India, Paytm is accepted at roughly 15 million merchants, and has 350 million registered consuming users and 200 million monthly active users. Moreover, Paytm, valued at $16 billion, is backed by both Alibaba Group and Softbank Group. More than any of its rivals, Paytm has been pursuing the superapp model.

Paytm has also added grocery shopping, banking and financial services, health care and food delivery services to its mobile payment app over the past few years. Typical roadside fruit and vegetable vendors in Indian cities accept Paytm using a QR code. Paytm has offered almost every service except communication.

How will a Super App make?

Facebook and Jio seem to believe that WhatsApp can be a super app because WhatsApp is already there on almost every smartphone in India. But what it lacks right now is a good payment system, which is in beta and needs regulatory approvals from the Indian government to go ahead and an effective merchant network.

Now it will not be big deal as it seems Jio can help Facebook. Jio is India’s one of the biggest telecom companies and part of the Reliance group. Association with it may help Facebook get regulatory approvals for WhatsApp payments. Thus, by integrating  JioMart, which is an offline-to-online platform, with WhatsApp, Facebook and Jio may create a platform that will serve in India as WeChat does in China.

On the other hand, Jio can utilise Facebook's ad platform. Jio will leverage Facebook's user analytics-powered targeted advertising. Possibly, Reliance customers can make in-app purchases via Facebook or Instagram checkout. The platfome can generate a big audience with WhatsApp’s 400 million Indian users along with Jio's 388 million customers.

Another suggestion that Jio transactions are likely to be done exclusively via WhatsApp pay. Not just because WhatsApp Pay uses the universal UPI platform most e-tail players have integrated but also because transactions are already being conducted via the Jio Money platform.


Read More: Jio-Facebook Partnership- A New Collaboration After Byju's, Meesho and Unacademy


Conclusion

Facebook-Jio is just more than just to create digital payment services for grocery shops in India. After launching JioMart all over India, the partnership will take further steps to create the Super App.

In the coming months, WhatsApp could be an app where Indian users will not just talk or chat but also buy stuff, book cab and so on. With each purchase, Jio and Facebook will pave the way to enable the transaction.

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About Varad Kitey

  • Pune