Jio sets new Benchmarks for Dragon Startups
Updated: Jul 25, 2020
Veni, vidi, vici. a Latin phrase meaning 'I came, I saw, I conquered' was first used by Julius Caesar after winning a battle in Asia Minor and again a few days earlier at the Reliance AGM 2020, by Mukesh Ambani.
No, that is not true, but you won't be surprised if that was the case, right?
Reliance Jio Infocomm Limited, d/b/a Jio, has raised about $ 20 Billion in the last four months, making Jio a Super dragon - in fundraising terms.
The last decade saw a number of dragon startups emerging from the Indian startup scene but Reliance Jio has set new benchmarks, even for the poster boys of our startup world and amidst the ongoing crisis situation.
The "Startup" Story begins in the Summer of '07 at Ambawadi, Gujarat
And then in the monsoons of 2010, with Reliance Industries Limited (RIL) "strategically" buying 95% stake in Infotel Broadband Services Limited (IBSL) for US $670 Million. Notably, IBSL was the only company to have won broadband spectrum in 22 circles of the 4G Spectrum auction that took place, earlier the same year.
In 2013, IBSL then subsidiary of RIL was "conveniently" renamed as Reliance Jio Infocomm Limited (RJIL) and the rest, as we know is history...
After obtaining the bids for 4G subscriptions Jio announced the launch of LYF smartphones that will be capable of running on Jio 4G networks and will be affordable for almost all the sections of the society due to their affordability. Jio partnered with Intex to supply these 4G handsets. By the start of 2016, Jio had launched their first set of devices namely – LYF Earth 1, LYF Water 1, and LYF Water 2. Just like that, in about 2-3 months LYF became the fifth largest smartphone manufacturer in India.
Not far from the announcement of the smartphones, Jio started offering a beta version of the service to its employees, free of cost. The beta release was an instant hit. Through grapevine channels the efficiency of the service reached the general populous, which was exactly what Jio was expecting through this move. Other Telcos, cried foul play and complained that using beta-testing or pre-launch as cover, Jio was actually using 4G airwaves for full-blown services without paying the government.
Unscathed by controversies, Jio promoted their services at the biggest platforms possible. They even provided free Wi-Fi services at six locations during the T20 World Cup of 2016. The monies from the spoils of oil and gas industry trade was well spent with the biggest names of the entertainment industry, associating with Jio and its marketing efforts.
Joint Implementation Opportunities
The next step in their monopolistic, competitive strategy was formulated via an app bundle, which included JioPlay, JioSecurity, and JioNews among others. A few months after the launch of the Jio App, They opened their services to the public. By offering low cost tariffs on new connections, they attracted a horde of customers buying into their penetrative pricing policy, and establishing a larger market share at a faster rate.
Jio services were priced at 1/10th of standard telecommunication rates
The executives at Jio believed that users should be charged either for telecommunication services or data. Jio introduced their offering as a ‘Welcome Offer’, placing it in the consumers mindset as a limited period offering. Owing to the cost effectiveness and ease in procurement of their services Jio was a massive hit. The offer extended way beyond its promotional period of 90 days. Over that, Jio decided to play with consumer mindset again by rebranding that offering towards the end of the calendar year as a ‘Happy New Year Offer'. Even the Telecom Regulatory Authority of India (TRAI) sided with Jio determining that 'Happy New Year Offer' is not an extension of its previous 'Welcome Offer' in a filing with the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) of India.
Jio continued to grow over the years spreading its arms into almost every profitable and online retail segments. Jio partnered with streaming platforms to come up with JioTV, and they went on to acquire online music streaming platform, Saavn in 2018.
They even launched a digital payments platform - JioMoney.
By the end of 2019, Jio became the biggest mobile network provider in India and the third largest in the world with 387.5 million subscribers. If "predictions" are to be believed, Jio will be able to capture more than 40% of the mobile network market by 2024. Data collected shows that data volumes increased by 4160% since the launch of Jio services.
Jio was such a revolution in the mobile network industry that it disrupted the business of other service providers in the industry including the incumbent service providers like Bharti Airtel, Vodafone and Idea. The two companies, Vodafone and Idea merged after their sector witnessed a huge tariff war in the wake of Jio. No one could match up to Jio’s "predatory" pricing strategy and this was Jio’s Ace of Spades. Eventually all the players in the industry had to cut down on their prices, if they wanted to survive against Jio’s practices.
Today, Jio is the biggest name in data services in India. It has been able to provide unmatched services covering the rural areas of India, reaching out to a wide range of consumers. They do believe that data is the new oil.
Jio aims at achieving global recognition by stepping into fundraising and selling stakes to some of the biggest players in the global tech market, which bring value partnerships along with capital infusion.
The biggest investment came from Facebook, Inc., worth close to $5.7 billion for around 10% stake in the company. Other investors included Silver Lake Partners, Vista Equity Partners, General Atlantic, KKR, TPG, Intel Capital and Qualcomm.
The latest investment in Jio comes from one of the other Big Four. Search Engine giant, Google has invested close to $4Bn in the company for 7.73% stake. Jio and Google are also set to collaborate on developing a lost cost OS for smartphones in India. With Facebook and Google, being the largest minority stakeholders and associated with the platform, Jio is all set to conquer new horizons.
Looking at the world through Jio's Glasses
Jio is also working on developing products like JioTV+ – an integrated online entertainment streaming platform, JioMeet – a video conferencing platform, and JioGlass – which will enable holographic video calling.
JioMart made a silent launch during the pandemic by on-boarding local kirana (grocery) stores to provide a last mile delivery network to orders placed via their platform. Which is a service model viable to continue undergoing expansion in urban and rural areas, simultaneously.
Embibe – an EdTech platform was a much needed relief for students, parents and teachers who were forced to switch into online classes model for teaching with COVID-19 lockdown extensions and social distancing norms becoming the "new normal".
Jio has recently announced its plan to develop a 5G network in India. The unique feature of the network is that it will be developed by technicians inside the country without any real outside influence, this comes after PM Narendra Modi’s initiative to make India self-reliant, आत्मनिर्भर भारत.
Jio’s vision has always been to completely digitise India with the inclusion of the underprivileged sections of the society. Jio has already embarked on this mission and has made conceivable advancements. One of the main reasons Jio has been such a successful venture is that its parent company – Reliance is one of the largest corporation not just in India, but also the world. Right from the beginning, Jio was backed with an investible startup capital, ease in government regulations and influential relationships with some of the most powerful entities in the country, but those are not the only factors that lead to its success.
Jio in itself was a distinctive idea with a well-planned strategy & goal.
This may just be the beginning of a long journey for Jio, as the company strives to achieve further advancements in its data and tech prowess. We are now looking at the answer to a long abated question:
"Can India produce a Google?"