There’s a technology race developing between India and China at the frontier are emerging technologies like 5G, Big Data, AI, Blockchain & Cryptocurrencies. China already has an advantageous position in many of those areas, including 5G and AI, and is looking to challenge Bitcoin and the USD with its digital Yuan.
Facebook’s recent moves with Whatsapp & Libra are interesting strategies within this larger game of worldwide tech domination where the likes of WeChat and TikTok are resoundingly successful market leaders. An enormous reason for the success of WeChat is its complete market domination within China’s 1.4 Bln population. Moreover, WeChat has seamlessly integrated into the daily lives of its users. It’s far above just a chatting app: it’s a platform for shopping, ordering groceries, booking travel, dry-cleaning, reserving a table at a preferred restaurant, and sending money among other services. Add the 40 Mln global Chinese diaspora who use WeChat to speak with loved ones back home, and you’ll see why WeChat is one among the leading social media networks with over 1.2 Bln global users.
Prior to the Trump administration’s latest trade salvo, WeChat’s parent firm Tencent was worth over Facebook. Facebook’s objective with Libra, WhatsApp & investment in Reliance Jio is to form Facebook membership more valuable, thus expanding its member-base by becoming a one-stop buy everything the firm has got to offer, very similar to WeChat in China.
Firstly, let’s start with the opportunity for Crypto assets. Cryptocurrency has many detractors but its biggest selling point is its ability to deliver “financial inclusion”. Globally 1.7 Bln of the global population lacks access to a bank or financial organization body. Services like Western Union and Moneygram generate $50 Bln plus in annual revenue by targeting the “unbanked” segments of the worldwide population. The unbanked might not have access to a bank, computer, or maybe a landline, but they are doing often have access to a telephone.
There are several gaps and bottlenecks with existing payment and money transfer services, especially when sending money abroad. Anyone who has tried sending money internationally can speak to the value, process, and time involved to both send and receive international wires. Cryptocurrencies like Bitcoin [BTC] could potentially address this challenge.
On the flip side, the arrival of Cryptocurrency and ICOs has led to the arrival of cryptocurrencies with little to no value, or digital currency with no discernable purpose. The challenge for Bitcoin and lots of several other Altcoins within the market is the lack of sufficient market reach or adoption. it might be difficult for cryptocurrencies like Bitcoin to become payment methods without wide-spread adoption by both users and merchants. Within its present form, Bitcoin along with other cryptocurrencies aren’t very “liquid” or widely in circulation among the mainstream.
This is where Facebook comes in. Globally Facebook and Whatsapp have 2.45 Bln to 2 Bln users respectively. India is among the largest marketplace for both Facebook and Whatsapp, each with 260 Mln as well as 400 Mln users. Additionally, Reliance Jio is India’s leading telecom player with a rapidly-expanding userbase of 400 Mln users. Reliance Jio is additionally a market leader within the Indian 5G space and has partnered up with Google to launch affordable 5G phones in the Indian market. These low-cost 5G phones would even be targeting the unbanked segments of the Indian populace. This collaboration with Reliance strategically positions Facebook to try in India what WeChat did in China. the amount of smartphone users in India is expected to reach 442 Mln by 2022, demonstrating the potential of India as the largest untapped market within the world.
WeChat built an e-commerce platform on a messaging application, inspiring Facebook to duplicate on a worldwide basis what WeChat accomplished in China, by starting with India. The mixing of messaging and payments alongside access to the Reliance infrastructure provides Facebook a template to duplicate in other emerging markets.
Therefore, Facebook with its various affiliates like Whatsapp and now collaboration with Reliance Jio has access to the leading userbase within the world for its Libra project. This lets Facebook take a definite competitive advantage over any existing Cryptocurrency project: a lively and vibrant user base that will drive mass adoption. Leveraging the Whatsapp messaging gateway, which incorporates those not covered by formal banking, Facebook has the right hook to entice its users to use its messaging ecosystem as a worldwide and native payment/money transfer solution. Almost like WeChat, it’s tremendously simple to use who are already using Whatsapp to speak with their loved ones and to use the same platform now to transfer money and make payments. Within the Americas, Europe, and the Middle East, the remittance community of Filipinos, Indonesians, Indians, Central Americans, Pakistanis, Bangladeshis along other countries are all on Facebook because can communicate without any language barrier. These users can potentially swing to Libra and Whatsapp Pay. After its pilot program in India, Whatsapp pay recently received approval from the Brazilian Central Bank, chatting with its global ambitions.
If Facebook and Reliance Jio are successful in enabling trade and business via WhatsApp, then they’re well on their path to turn WhatsApp into a worldwide super-app, like the position WeChat enjoys in China. The Libra component drives financial inclusion & lets micro-businesses to grow, further expanding Facebook’s market dominance.