The FT profile Mukesh Ambani: the relentless rise of Asia’s richest man ($) by Benjamin Parkin and Anjli Raval, is a fairly studious and reasonably even-handed (as much as one can perceive on these topics — billionaire appraisals are invariably divisive) profile of likely of Mukesh Ambani, the richest man in Asia. This summary is exactly on the money —
Reliance Industries was a lucrative, if unglamorous, petrochemicals and oil refining group when Ambani took control in 2005, three years after his father’s death. But over the past decade, he has embarked upon a project that has made him one of the most talked about people in Silicon Valley. Jio, the mobile operator he launched in 2016, has already muscled aside competitors to become India’s largest. Ambani hopes it will become the country’s answer to China’s Alibaba, a home-grown tech giant in one of the world’s fastest-growing internet markets.
The one ostensibly over-covered theme about the Ambanis is how Mukesh catapulted in fortune and business success in a contrasting trajectory to his sibling Anil, who inherited and subsequently squandered (perhaps) a more attractive portfolio.
In a 2005 peace deal brokered by their mother, the pair divided the conglomerate. Anil, seen as the more stylish brother and married to a Bollywood star, spun off Reliance’s finance, power and existing telecom businesses and ventured into film production. The comparatively unassuming Mukesh took the core oil products business.
I would say Mukesh’s wealth and success almost has to do with the founding and the smashing emergence of Jio — who aggressively underpriced service has met the increasing appetite of massive internet consumption in rural and suburban India.
Jio is the Amazon of India and more. (Amazon is also big in India, and has begun dominating the otherwise massively granular retail market). Denizens in hushed tones are wary of Jio’s size and dominance, but customers absolutely can’t do without it due to price and convenience. Personally speaking, I noticed that Jio absolutely transformed the travel experience in India.
Jio is cheap! I know of many families that accessed the internet for the first time due to Jio. As Vedica Kant (former student!) astutely documents the birth of Reliance and the growth of Jio and notes that Jio font is oil spelled backward. [This is a fantastic and well-researched article, even digging in to find a fantastic interview of Mukesh Ambani by Simi Garewal]. Jio has the cheapest data rate among all the places in the world (less than $ per GB) at a massive scale (70% of all $G traffic in India). Jio did not just stop at low prices, she writes, it also invested in improving products…
Jio continuously innovated even after it launched. For example, to cater even cheaper devices for the mass market segment, Reliance worked to develop the Jio feature phone at the price point of Rs 1,500 (~$20). By last year the JioPhone had ~30% of the feature phone market share. By some estimates the company has sold nearly 100M JioPhones, i.e., ~25% of the subscriber base use the phone. It also adopted a holistic approach to user experience, integrating content with its phones from the get go. It has continued to build out its suite of apps, the most recent being JioMeet.
Despite low marginal costs, etc, building scale in India is hard given the diverse, highly federal, over-regulated internet growth market. Jio has cracked it — and now, Facebook is here trying to talk to Jio, and make a second attempt at the market, after its Free Basics kerfuffle.
After the bust of homegrown startups like Flipkart, Reliance (through) may also be the last, long-standing competitor to Amazon in India. As I always note, it might have a lot to do with cracking the entertainment market!