US tech and retail giants are pouring gobs of capital into India’s digital economy, call it the Reliance Jio effect.
E-commerce major Flipkart has landed new funds while Google is eyeing a stake in Reliance Industries’ digital arm Jio Platforms.
Flipkart’s new financing
Flipkart Group has closed a $1.2 billion financing from Walmart-led investors to grow its commerce business. The investment, which will happen in two tranches, values the e-commerce platform at $24.9 billion, an increase from $21 billion when it was acquired by Walmart in 2018.
Walmart currently owns about 80% stake in Flipkart and this investment is expected to slightly increase the shareholding by a percentage or so, people in the know told ET.
Flipkart said it recently witnessed a 45% growth in monthly active customers and a 30% transaction growth per customer.
Why does it matter?
This investment comes at a time when India’s online retail sector has witnessed the entry of a new powerful player in the form of Jio Platforms that has notched up about $15 billion from a clutch of tech giants like Facebook and Intel, private equity biggies like Silver Lake and KKR and sovereign wealth funds like Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala.
Reliance Jio’s online shopping portal, JioMart recently scaled up to 200 cities and is planning to leverage its telecom reach to propel its online commerce business.
Rival Amazon has also invested more than $5 billion in India since 2013 and founder Jeff Bezos committed another $1 billion to help 10 million Indian small and medium businesses sell online earlier this year.
India’s e-commerce industry has also witnessed a sharp recovery over the past few weeks after the lockdown curbs were eased on the sector and a large number of consumers preferred to make online purchases.
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Google eyes Jio stake
The fundraising efforts of Jio Platforms don’t seem to be ending anytime soon as it continues to attract new investors. The latest one is Google that announced plans to invest $10 billion in India over the next five to seven years on Monday.
The search giant is now in advanced talks to plough $4 billion into Jio Platforms, as per a Bloomberg report. This comes after Facebook invested $5.7 billion in the digital arm of Reliance Industries in April that kickstarted the fundraising spree.
To be sure, Google has previously held talks with Jio Platforms for a stake purchase and has also explored investments in rivals like cash-strapped Vodafone Idea, the Financial Times reported in May.
Alphabet chief executive Pichai neither denied nor confirmed reports of Google’s interest in Jio Platforms or a stake acquisition in Vodafone Idea, in an exclusive interview to ET on Monday.
Airtel’s new video conferencing solution
Reliance Jio is set to witness competition from rival Airtel on a totally new front: Videoconferencing
Airtel has struck a strategic alliance with US-based telecom operator Verizon to offer the latter’s BlueJeans video conferencing solutions to businesses in India. Verizon had acquired BlueJeans in April this year.
Targeted at small and home enterprises, the solutions will be offered under the brand name Airtel BlueJeans. All the data will be locally stored on Airtel’s data centers and cloud, said Gopal Vittal, Managing Director and Chief Executive Officer of Bharti Airtel.
Reliance Jio had launched its Zoom-lookalike video conferencing solution JioMeet earlier this month
The big picture
The launch comes at a time when video conferencing is finding greater adoption due to the growing trend of remote working in India and across the world. Players like Zoom, Google Hangouts, and Microsoft Teams are witnessing unprecedented demand among enterprises as well as regular consumers.
Google made its business-only Meet video conferencing solution available to all users in May while Microsoft recently rolled out a preview version of Microsoft Teams to consumers, with wider availability expected in the coming weeks. Read more.
Revival of blue-collar jobs
E-commerce and logistics firms are driving a revival in blue-collar jobs, with a spike in job openings in recent months and a further uptick is expected to happen in the forthcoming future as companies prepare to cater to the festive season demand, according to HR consultancies.
Internet companies like Amazon, Grofers, Big Basket, and DealShare have already hired thousands of blue-collar workers over the past month.
What’s the growth like?
Staffing firm Teamlease said it witnessed a 12-15% growth in job openings for delivery executives in May compared to April, which has further increased by 18-20% in June.
Blue-collar jobs also clocked a 108% jump in applications and 36% growth in availability in May compared to April, according to a report by job portal QuikrJobs. The survey, which analysed job listings by recruiters and applications by jobseekers on its platform, also witnessed a 48% increase in the overall rate of applications per job. Read more.
Tech giants join student visa battle
US tech giants including Google, Microsoft, Twitter, Adobe, Salesforce, LinkedIn and Paypal have joined the legal battle against Trump administration over its order directing foreign students to leave the United States if they are not attending in-person classes
These tech firms along with local unions like the Chamber of Commerce of the United States of America, the Software Alliance, and the Information Technology Industry Council among others have joined the lawsuit filed by Harvard University, the Massachusetts Institute of Technology, and 180 other colleges opposing this move.
The order is expected to impact thousands of Indian students studying in the United States, which constitute the second-largest foreign student community on US campuses after the Chinese, according to the Institute of International Education. Read more.
Also read: Thousands of Indian students in US lose visa power
(Illustrations and graphics by Rahul Awasthi)
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