International

New $54 Mobile Phones Could Broaden Reliance’s Reach In India

India is looking at not only vocal about local commerce, but also domestically produced phones and localized payments.

India’s Reliance Industries has asked suppliers to produce up to 200 million low-cost versions of its Jio smartphones over the next two years, as reported by Bloomberg. The news service said the company would offer the phones to customers for as low as about $54 if they sign up for Reliance Jio phone service.

Bloomberg cited unnamed sources as saying the phones will be made in India and use the Android operating system. Jio will pair them with low-cost wireless plans that also offer streaming media services.

The Reliance efforts shine a spotlight on efforts within India to spur domestic manufacturing, along with domestic consumption of Indian-made products and services.

“We are, of course, trying to build our domestic companies. We have a sweet spot in entry-level phones,” Pankaj Mohindroo, chairman of the India Cellular & Electronic Association, told Bloomberg Television.

The Reliance efforts have implicit backing from U.S. companies and investors such as Facebook, as the company has garnered more than $20 billion in investments over the past several months.

Google is also buying a $4.5 billion stake in the company (about 8 percent), which would seem to fit the narrative of an Android push. (It should be noted that Reliance’s choice of the Android system could be all its own, as the Google investment remains under regulatory review.)

There are also hints of how Jio’s low-cost phones could become a fulcrum for further eCommerce efforts. As we noted earlier in the month, Reliance Retail has extended an offer to sell part of itself for $20 billion to Amazon. That deal and its low-cost phones could cement an ecosystem that links retailers, platforms, consumers and mobile tech.

The attractiveness of offering a soup-to-nuts commerce ecosystem in the region was highlighted by PYMNTS earlier in the year. After all, Jio already has about 400 million Indian subscribers or more than 35 percent of the market. It also has a music-streaming service called JioSaavn, as well as a streaming TV business called JioTV.

Additionally, Jio said earlier this year that it’s seeking to become the first telco to offer a Unified Payments Interface (UPI) service integrated into its app. Such payments functionality would boost financial inclusion among unbanked and underbanked populations who have access to technology, PYMNTS noted at the time.

Add it all up and the stage has been set for Indian digital commerce done via mobile means, as demonetization has been in place through the past four years. Reliance has also announced JioMart, a pilot program for a grocery delivery service that will feature an online-to-offline ordering system on WhatsApp.

With locally made phones harnessing local payment methods, Reliance would carve a greater slice of such initiatives — nationwide in scope. Such moves could help realize Indian Prime Minister Narendra Modi’s dream of spurring consumers to be “vocal about local” goods and brands –- and vote for them with their (digital) wallets.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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