Why Reliance JIO Is Only A Half Step Into The Right Direction?
The world’s biggest startup worth a whopping 150,000 crore has taken roots in India. And, it has the vision to change the digital lives of people and the country. Yes, you got it right. We are talking about Mukesh Ambani’s most ambitious venture ever – Jio.
Jio is offering the cheapest ever internet data, at a fraction of what the other providers are offering. That too, 4G network and at 40 to 80 times faster than the current average speeds! As expected, the competition is stiffened with fear, while the customers are celebrating. There is one more category of people who are cheering the arrival of Jio. They are startup entrepreneurs. So, what impact will Jio have on these entrepreneurs and how it can be a key driver in changing the course of ‘Startup India’? Here are the answers.
Access to untapped markets
According to FICCI-KPMG Indian Media and Entertainment Industry Report 2015, the internet users in India will grow by at least 50 million yearly till 2020. However, the internet penetration is far low at 19%. Jio’s 4G network will connect 18,000 cities and towns, and more than 2 lakh villages. By March 2017, it will cover 90% of India’s population and by 2020, it will have 100-120 million subscribers. This explosion in the connectivity is expected to give these existing as well as upcoming startups a huge access to the unexplored markets, especially Tier II & Tier III cities and rural pockets.
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More entrepreneurs, new locations
Jio plans to tie up with thousands of Indian entrepreneurs to use its platform. This will, in particular, encourage startups which are operating in digital space. Such partnership will also give a boost to entrepreneurs to launch their startups in small cities and towns and reduce ‘overcrowding’ of a startup in current hubs such as Bangalore, Gurgaon, Hyderabad and other top cities.
Venture capital fund exclusively for startups
Jio has set aside Rs 5,000 crore in venture capital fund called the Reliance Jio Digital India Startup Fund. The aim of this fund is to create entrepreneurs who can provide services in areas that Jio is planning to foray in future. Jio will soon introduce apps around education, health, entertainment, rural livelihood, agriculture and on-demand content, all of which could open up new vistas in the startup ecosystem.
For instance, Jio will be launching huge, virtual libraries spanning 10 million songs, 60,000 video songs, 1 lakh episodes of TV shows in 10 languages and 6000 movies, besides operating 300 live TV shows. When the consumption of content goes up, there will be more opportunities for startups to provide such services.
Similarly, if Jio can reach the remotest villages, which are primarily dependent on agriculture for livelihood, startups can reach out to new target audience such as farmers through apps, chatbots, and videos on farming, cattle maintenance, weather updates, and so on.
Related Article: Mukesh Ambani Invests INR 5,000 Crore For Startups
With Jio, the data will flow at super speed and exchange of real-time information will become easier. The startups will also be able to manage its digital workforce better instead of worrying about internet breakdowns. This will empower entrepreneurs to take quick and timely business decisions, especially during campaigns and a crisis or an emergency situation.
Enhanced customer experience and services
Jio is viewed as a feature-rich and user-friendly platform for Augmented Reality (AR) and Virtual Reality (VR). As the consumption of data goes up, customers will expect more visual and Artificial Intelligence (AI) enabled elements on their mobile sets. Definitely good news for startups working in AI, AR, and VR!
But…..the road ahead, although promising, is not smooth for the startups!
Smartphone and data prices
The biggest hurdle still remains money. Data access has no meaning without a smartphone. While Jio has also introduced affordable smartphones starting Rs 2,999, a poor rural Indian would rather buy a basic phone at 500. Until a smartphone reaches the places Jio is planning to cover, Jio’s network is of no use to startups.
Also, despite the much celebrated ‘cheap data’ from Jio, another push is needed in the data plans at the lower end. Jio’s plans provide the economic net access only at a pack of Rs. 500. The cheaper packs provide data at rates comparable to existing players. Till the time this is not addressed, it is going to be difficult for the startups to touch the proverbial ‘broad base of the pyramid’.
Value for money
While entrepreneurs are excited about reaching out to more people across every nook and corner of the country, the ability to convert the internet into paying customers will remain a challenge. The startups will have to still ensure that they provide the much-demanded value for money to customers, especially in the small town and rural areas.
Last mile delivery
E-commerce startups are still struggling with the last mile delivery of their products. Selling to a new customer in a new territory isn’t enough. Ensuring that the product reaches him is what really matters. For that, the logistic infrastructure has to be in place. So, while Jio can help startups to ‘sell’, it can’t help much to ‘deliver’.
However, challenges aside, Jio has opened up a huge opportunity for the startups. Right from budding startups to unicorns like Flipkart, Amazon, and Quikr, all would have access to a previously untapped market. Even if a small percentage of it is monetized, that is going to be huge in terms of opportunities and revenues. And not only the buyers, even new suppliers would emerge from this unexploited market, and could catapult India to an era of digital entrepreneurship.
With mobile handsets, India saw a boom in micro businesses where everyone from plumber to shopkeeper was connected to clients locally. Connecting them through the internet can usher in a bigger boom for startups as well as SMEs who would be able to reach out to the entire world.
Mukesh Ambani believes that Jio is an opportunity to transform the lives of our 1.3 billion Indians. Amen.
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