Mukesh Ambani’s Reliance Industries (RIL) is on the way to make lemonade, lemon pie and every other conceivable recipe in the book. RIL is on the path to create the Indian equivalent of the global tech ecosystem of Facebook, Amazon, Netflix and Google (commonly known as FANG). He is also taking pages out of the playbooks of Chinese giants like Baidu and Alibaba to make sure that RIL has a finger in every pie of the digital ecosystem to tap into the growing internet economy.
With Reliance Jio possibly acquiring stakes in AI chatbot company Haptik, as RIL and its subsidiaries aggressively shop for language, AI companies and similar start-ups in the digital assistant and online content support space, analysts have begun to wonder if Jio is seeking to turn out their version of Alexa. The company already has KaiOS as well as a handset and app ecosystem to take it a step closer to the FANG model globally or Alibaba/Baidu in China.
Queries to RIL and Haptik confirming the acquisition remained unanswered. “What is evident from the acquisitions announced so far is that Jio wants to be a digital giant and is clearly aware that simply providing the internet backbone isn’t enough, unlike the competition. Jio is creating the product/service base as well for users to consume with the data,” said Faisal Kawoosa, founder and chief analyst TechARC. On the other hand, Jio’s partnership with these native technology companies also provides them the scale to improve reach and come up with more innovation, he added.
Newly digitising sectors (including agriculture, education, energy, financial services, healthcare, logistics, and retail) as well as digital applications in government services and labour markets could each create $10 billion to $150 billion of incremental economic value by 2025 in India, according to a new report by Mckinsey Global Institute.
In February, RIL announced $110 million of new investments in five companies related to logistics, pharma retail and data management/AI space, end-to-end voice technology and simulation services for manufacturing. Over the past five years, RIL has invested $1.2 billion (acquisitions less than $1 billion) to build capabilities across various business. After entering into agreements to acquire logistics services platform Grab and software firm C-Square Info Solutions, RIL, through its subsidiary Reliance Industrial Investments & Holdings (RIIHL), is acquiring three start-ups namely — Reveries, EasyGov, and Sankhya Sutra Labs. While reverie offers multilingual language support, EasyGov is in the e-governance space and Sankhya Sutra is into industrial fluid dynamics.
So, first Jio had the telecom network, then the device and its advertising ecosystem. Now, the company is building the consumer-facing software base with the likes of Reverie and possibly Haptik.
Pareekh Jain, founder of Pareekh Consulting said, “The conglomerate is certainly building their e-commerce muscle through these acquisitions. A multilingual approach fits in perfectly with the kirana store outreach programme they have announced.”
He said globally there were examples like T-Mobile and T-Systems, which provide complementary telecom and tech services and RIL may follow a similar path across their consumers and in-house services.
During RIL’s AGM in 2018, Ambani indicated aspirations to plug kirana shops into their retail platform, using technology and its connectivity platform (Jio). While there is limited visibility on the commercial roll-out of such initiatives, several media reports have suggested a launch possibly in the next few months and is currently in test phase. According to HSBC estimates, the digital arm of RIL’s business (independent of the organised retail) is valued around $48 billion.―Business Stadnard