Strategic Similarities – Jio & Facebook

Veni. Vidi. Vici. 

Veni, vidi, vici.

It’s the alleged phrase used by Julius Caesar to denote his swift & conclusive victory against Pharnaces II of Pontus at the Battle of Zela.

I came, I saw & I conquered – that’s what it translates into.

Two companies in different periods of this decade & in different industries had come, had seen & are conquering the status quo in their respective domains.

Although Jio’s reign has been only India-specific whilst Facebook is a global behemoth in its own right, the parallelism is quite apparent if we scour their surfaces.

‘Back to Business’ for me with this blog, both literally & figuratively, as I write about business after a brief hiatus.

In 2,321 words, I shall attempt a comprehensive breakdown of the strategies of these 2 firms.

As always, let me lay down the structure… It aids both me (the writer) & you (dear reader) keep coherent track.

“I am as much interested in the smallest detail as in the whole structure.” – Marcel Breuer, Architect

(A) Quick Comparison Of Facebook & Jio

(B) Facebook’s Trajectory

(C) Jio’s Trajectory

(D) Bi-Lateral Mapping

(E) Inference

(A) Quick Comparison

Parameter/Company Reliance Jio Facebook
Industry Telecom & Entertainment  Social Media
Presence India Worldwide
Headquarters Navi Mumbai, India Menlo Park, California, USA
Founded  2010 2004
Revenue (Previous Quarter) $ 971 Million $ 10.3 Billion
Users  138.6 Million 2.07 Billion

Now, this is just a brief, customary comparison. Idea is to give only a quick-look.

A prima facie observation would render this not very relevant because Jio is a new entrant in its industry whilst Facebook is, by now, essentially a veteran.

This aspect will be covered in a ‘relevant’ comparison further below.

(B) Facebook’s Trajectory

As most of us know, Facebook started in 2004 when Mark Zuckerberg came up with the idea in his Harvard dorm room.

Here, we shall not delve into the story of how it was conceptualised. Rather, let’s look at the trajectory of how the ‘concept’ of Facebook has evolved over the years.

Let’s have a further breakdown.

(i) Industry Status Quo During Entry

Facebook entered the scene in 2004 when the erstwhile social networking behemoths were at the helm – MySpace, Orkut & Hi-5 (in no particular order).

Not until 2007 did it gain momentum (in India at least) because Orkut was grabbing the lion’s share of users till then.

But even then, from my personal experience of growing up as a teenager during the period, Facebook never really surpassed Orkut till 2009. Hi-5 was slowly fading away and MySpace had its own space purely because of music being its selling point.

Add to these 3 juggernauts of Myspace, Orkut & Hi-5, Yahoo! Messenger was a popular messaging platform back then – often negating the need to use social networks at all when you could directly chat up your friends for casual banter!

Slide1.PNG

(ii) Unique Selling Points Of Entry

When Facebook did enter, what did it provide ‘different’ to the users?

The drawbacks of Orkut were the entry-points for Facebook to capitalise on.

USPs can be summarised as below.

  1. Privacy: Lot more secure than Orkut, where lack of privacy was a major hiccup and let to its downfall & Facebook’s rise.
  2. Comprehensive Social NetworkOrkut only had 2 major attractions – scrapbooks & communities. The first was a very rudimentary form of public chat that only involved two people. The second, however, was the most interesting feature because you could interact with all kinds of people who shared the same interests as you did. It was a big deal back then. MySpace was mainly for the music aficionados & Hi-5 largely popular amongst teenagers. Facebook came in with plethora of features like a News Feed, Wall, Groups & Pages (combating Communities of Orkut) and live chat with friends. All of these were bundled up in multiple privacy options – you could choose what you share with whom.
  3. AdvertisingOrkut never sold itself as an advertiser-friendly portal. Facebook, on the other hand, showed the way saying everyone can benefit from our success – ad monetisation.
  4. User DiversityUnlike MySpace (music-centric), Orkut (communities/groups-centric) & Hi-5 (teenager-centric), Facebook’s neutrality in features caters to people of all ages, regions & interests.

(iii) Core Features & Their Outcomes

Going with a top-down approach, there are 2 core outcomes of Facebook’s 2 core features – (a) Comprehensive Social Networking & (b) Emotional Appeal. Yes, (b) is inherently part of (a).

  1. Comprehensive Social Networking (Core Outcome/Identity) – News Feed, Wall, Groups/Pages (Core Features)
  2. Emotional Appeal (Core Outcome/Identity) – LIVE chat (Messenger), Likes, Comments, Apps (Core Features)

It’s important to add ‘Emotional Appeal’ as a category because that’s what differentiated Facebook from all the other networks during its entry.

(iv) Cross-Functional Expansion

Now, this is the crux of this post. This is what will be the basis of comparison too, between Jio & Facebook.

It’s a brief analysis of (A) what domains the company is diversifying (apart from its usual business) into & (B) what new business identity (A) results in. (A) is given below & (B) is covered in table followed in the next section.

(a) Acquiring WhatsApp

WhatsApp is Facebook’s largest acquisition at USD 22 billion. Reason for acquiring being huge user growth in developing markets which will help gain access to these mobile user bases & will also aid Facebook’s Internet.org initiative, Mark Zuckerberg’s plan to implement internet access to the two-thirds of the world not having internet access as of yet.

(b) Facebook Marketplace

If you have observed your Facebook homepage left-hand side tab (on desktop), there’s an icon ‘Marketplace’. Click on it & it takes you to a mini-Amazon-like webpage where one can buy & sell clothing, electronics, classifieds, entertainment, vehicles, etc.

(c) Facebook Payments

It’s a peer-to-peer payment service wherein Facebook Messenger will be the medium through which sending & receiving cash is made instantaneous. It launched in US in 2015 & was rolled out to UK in Nov, 2017.

(d) Facebook Professional Services

A crowd-sourced reviews & recommendations desktop-only portal about local businesses in your vicinity (spa, salons, plumbing, event planning, automotive showrooms, restaurants, etc). This is a direct combat with Yelp & Google.

(e) Other Domains (Events, Video & Instagram Acquisition)

Integrating event planning with Facebook Events, delighting users by provision of watching YouTube videos directly from Facebook & acquisition of Instagram are other domains Facebook diversified into.

(v) Shift To A Lifestyle Enabler Via Cross-Functional Expansion

So, what’s the end outcome by diversifying as explained above?

Best elucidated by the table below & formula following underneath:

Details Of Expansion Business Identity Gained 
Acquiring WhatsApp Communication Facilitator
Facebook Marketplace for buying & selling E-Retail Facilitator
Facebook Payments (peer-to-peer money transfer via Messenger app) Payments Facilitator
Facebook Professional Services (organize, categorize, and rank the best local businesses in your area) Classifieds Facilitator
Facebook Events (integration of events into Facebook) Entertainment Facilitator
YouTube Videos On Facebook (watch directly from Facebook)
Acquiring Instagram

FORMULA:

Communication Facilitator +  E-Retail Facilitator + Payments Facilitator + Classifieds Facilitator + Entertainment Facilitator

=

LIFESTYLE ENABLER

And that’s how Facebook is evolving as a product and will always be relevant.

(C) Jio’s Trajectory

At the outset, I reiterate, Facebook is a giant compared to Jio in all ways, but the direction that Jio is taking is akin to what Facebook did – if not all, at least most of them.

The features & products offered by Jio is completely different, but the Business Identity is the same as Facebook. Let’s delve deeper.

(i) Industry Status Quo During Entry

Slide1

Again, a very similar status quo to what Facebook was confronted with upon entry – 4 major players. In Jio’s case, Airtel, Vodafone & Idea (now merged with the former) were the behemoths while other Telcos like Aircel, BSNL, Docomo, etc formed a collective 4th competitor.

It entered pretty much like an unseeded player at a tennis grand slam.

(ii) Unique Selling Point Of Entry – Affordability In Connectivity

Unlike Facebook, here, there was only one selling point to users during Jio’s entry – affordability.

Data being offered at incomparably low prices that disrupted the entire Telecom space.

Users, prior to Jio, had to pay as much as INR 450 for 1 GB of data/day.

Now, Jio offers 1 GB data/day for as low as INR 149 with a validity of 28 days.

That’s a sharp 66% drop in price of high speed 4G data. 

(iii) Core Features & Their Outcomes

This is a category radically different from Facebook. That said, the Business Outcome remains the same. Let’s dive.

(a) Mobile TelephonyThis is a no-brainer. Basic voice & data services is what a conventional Telco was offering, is offering & will continue to offer since that’s what a Telco symbolises fundamentally – connectivity provider.

(b) VoLTE Rich Voice/Video CallsNow, this is a new technology. VoLTE stands for ‘Voice Over Long Term Evolution’. Basically, it means voice calls over high speed internet 4G instead of traditional means (over 2G/3G). What it means for the end user is superior call quality (making it easier to make out not only what the person on the other end of the line is saying, but also their tone of voice), improved coverage, better battery life & rich video calling. Ultimately, is an HD voice/video call capability.

(c) Rich Communication ServicesRich communication services (RCS) is mobile carriers’ alternative to mobile messaging apps like WhatsApp and Facebook Messenger and it enables brands to employ rich media and interactive elements to engage consumers, as Gartner says. Jio boasted world’s largest deployment of RCS, surpassing 100 million subscribers within 170 days of launch via its Jio4GVoice app which also powers VoLTE calls.

Going with a top-down approach, there are 2 core outcomes of Jio’s 3 core features – (a) Connectivity Provider & (b) Emotional Appeal.

  1. Connectivity Provider (Core Outcome/Identity) – Mobile Telephony (Core Feature)
  2. Emotional Appeal (Core Outcome/Identity) – VoLTE Rich Voice/Video Calls & Rich Communication Services (Core Features)

(iv) Cross-Functional Expansion

Striking resemblance with Facebook in the outcome of the below points would be evident as you read on.

It’s a brief analysis of (A) what domains the company is diversifying (apart from its usual business) into & (B) what new business identity (A) results in. (A) is given below & (B) is covered in table followed in the next section.

(a) Jio PhoneIt’s a 4G feature phone released by Jio. Feature phones are just a bit over and above your usual basic mobile phone. It has, in addition to voice and text facilities, basic multimedia and internet capabilities too. Purpose of launching the 4G feature phone was for Jio to reach out to all kinds of users. With this, Jio can now enable people without smartphones and/or smartphones without the 4G LTE capability use Jio’s services at just an upfront refundable price of INR 1,500 for the phone.

(b) JioNet Wi-FiSelectively free Wi-Fi hotspot services across cities.

(c) Jio BroadbandLikely to launch high-speed fibre to the home (FTTH) broadband in more than 30 cities early this year.

(d) Jio Apps: Bundle of multimedia apps providing entertainment, music, cinema, OTT TV content, etc to the user.

(e) Jio TV: With a multi-service operator (MSO) licence in place, in future, Jio is also planning to offer TV services.

(f) Jio Money – It gives you the convenience of being able to carry a lot of money with you, while keeping it secure and making payments in seconds. Jio Money acceptance is getting larger by the day.

(g) Jio Coin: Jio’s own cryptocurrency, allegedly, is in planning stage.

(h) Digital Coupons For Kirana Stores: Turning the road-corner small grocery stores into a lucrative business opportunity in the midst of the ‘Amazon-Flipkart-Snapdeal’ wave in India via digital coupons is what Jio has next in store.

Jio will offers its users special discounts that can be availed at these small stores. This way, users will remain allured to Jio’s arsenal of services.

The stores benefit, users benefit & Jio also benefits.

(v) Shift To A Lifestyle Enabler Via Cross-Functional Expansion

So, what’s the end outcome by diversifying as explained above?

Best elucidated by the table below & formula following underneath:

Details Of Expansion Business Identity Gained
Jio Phone Communication Facilitator
Jionet Wi-Fi
Jio Broadband
Jio Apps (OTT entertainment content via TV, Music) Entertainment Facilitator
Jio TV
Jio Money Payments Facilitator
Jio Coin
Digital Coupons At Kirana Stores E-Retail Facilitator

FORMULA:

Communication Facilitator + Entertainment Facilitator + Payments Facilitator + E-Retail Facilitator

=

LIFESTYLE ENABLER

And that’s how Jio’s trajectory is strikingly similar to Facebook’s. 

(D) Bi-Lateral Mapping

Now, this is just a table summing up the similarities for thorough understanding.

Jio’s Cross-Functional Expansion Common Business Identity Gained Facebook’s Cross-Functional Expansion
Jio Phone Communication Facilitator Acquiring WhatsApp
Jionet Wi-Fi
Jio Broadband
Jio Apps (OTT entertainment content via TV, Music) Entertainment Facilitator Facebook Events (integration of events into Facebook)
Jio TV YouTube Videos On Facebook (watch directly from Facebook), Acquiring Instagram
Jio Money Payments Facilitator Facebook Payments (peer-to-peer money transfer via Messenger app)
Jio Coin
Digital Coupons For Kirana Stores E-Retail Facilitator Marketplace for buying & selling (clothing, electronics, classifieds, entertainment, vehicles)

Common Strategic Identity Gained = LIFESTYLE ENABLERS

Remainder (what outcomes Jio yet does not have):

Facebook Professional Services (organize, categorize, and rank the best local businesses in your area) Classifieds Facilitator

(E) Inference

Inference is more about the Telco industry & how disruption is the new normal in this space for the past 2 years.

Gone are those days when a Telco used to offer just traditional services of voice, SMS & data.

OTT apps are displacing each of these. Voice over LTE calls (calls over 4G internet) via an app (Jio4GVoice in case of Jio) is displacing normal voice calls & apps like WhatsApp/Hike/WeChat are displacing SMS.

This has only resulted in Telcos having to find new revenue streams, like shifts to offering entertainment, payment-modes & enabling daily life.

Jio’s entry, thus, has dislodged conventional mindsets.

It is playing like a mini-Facebook in its own right in terms of (i) identity (lifestyle) & (ii) infrastructure (IT systems capable enough to handle huge scale of users).

Jio’s on a journey of being Web-Scale – meaning, trying to reach the scale of Big 3 of Facebook, Amazon & Google.

It’s time for Telcos to gain a new strategic identity.

Being a connectivity provider is a mere part of the pie now. The lion’s share goes to being a relevant company in the life of the digital consumer.

It all means to say, to stay relevant, a Telco has to become a
LIFESTYLE ENABLER. 

Veni. Vidi. Vici. 

 

 

 

 

 

 

Advertisements

4 Comments

Add yours →

  1. A detailed analysis indeed.

    Jio did manage to give its competitors a punch in the face for the prolonged monopoly in the industry.

    Overall a good one! Keep going buddy.

  2. Nice one Shakti. Liked how you narrowed down the similarities and drew the conclusion in this one.. Keep writing!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: