Are we expecting Reliance Jio to build a Facebook, Apple, Amazon, Netflix, and Google?

8^th August 2020

Are we expecting Reliance Jio to build a Facebook, Apple, Amazon, Netflix, and Google?

Dear Fellow Travellers,

Namaste! Look at the price movement in reliance shares and media excitement with the Reliance Fundraising and follow up AGM – it was creating an impression that the company has been transformed into Consumer Technology Company. Today I want to ask above questions – Can Reliance JIO be the Indian FAANG?

How FAANG has come up?

Apple, Google, Amazon all started with tiny seed capital in former motor garages. Capital followed consumer traction. The base of these companies was INNOVATION and LEADERSHIP. Since innovation was so customer friendly – consumers could not stop themselves from using their services or products. When it clicked with Consumer – capital followed. They did not get any special favours from the Government. 

Reliance has come up due to Capital, favourable Government Policies and Execution Skill sets.   

The company has a super successful track record of building large projects in petroleum, telecommunications, and retail industries. However, can you relate any SINGLE consumer product to RELIANCE? I think Vimal was the only product in Textile. It was sold long back.   

Management has never come up with some innovative consumer services or products in their lifetime. The management is not geared up for that kind of venture.

Why?

Say TIK TOK or WhatsApp or any application. They are comparatively easy to make and launch. The challenge is winning the customer. This is a risky business. The company has never taken that kind of risk in their life. They always have gone for sure shot business.

Going for sure shot businesses stop the management from going in for INNOVATION.

This is applicable to Small investors also. They are not open-minded when they come to the market and they generally go for TOP rated companies by Media Analysts and end up with losses or fewer returns.

Me Too Products: -

Jio’s consumer applications - JioMeet, JioMart, Jio-Saavn, Ajio, Jio News, etc, will need to compete for both, the consumer’s mind and wallet share in an open and free market, with both nimbler garage start-ups as well as established consumer technology giants like Google / Amazon.

Look at the product or service portfolio – not a single application is unique to JIO. We have already been using them – say Zoom or Google Meet or Spotify or Amazon.com.

Now, why a customer will change his preference for JIO applications?

The only strategy Reliance has used in the Consumer domain is to give FREE SERVICES in the beginning and lower rates compared to the competitors. This is good with the LOWER base customer but you can’t attract classes of users who are adding to the margins.

What’s more? – FAANG companies are operating in India on their own also.

You don’t have to be Reliance JIO users to use the services of the above companies. They are investors in Reliance but they have their own shop also. Frankly, by investing in Reliance they are capturing the Indian market from both sides – from the JIO side and from their own efforts also.

I would buy those companies shares looking at their own Skill sets for TECHNOLOGICAL developments, INNOVATION, and Risk-taking capacities compared to JIO. They have become more secure now – they have LADDU in both hands. On one hand JIO and on other hand, they are on their own. So, smart guys will go for them.

What NEXT?

Don’t get carried away by MEDIA. Do your own research and spend time on thinking before you jump and buy any shares which is already in LIMELIGHT.

If you like our thought process – you can take our help in Investing your hard-earned money.

Have a Happy Sunday.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

Live With Passion…Invest With Passion. 

Hitesh Parikh.