Daily News Digest- 15th Nov'13

Thought of the Day:

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Following made the Headlines:

India:

• Yellen is Sachin of Markets, for a Day: Indian stocks ended a seven day decline after overnight comments by Janet Yellen, President Barack Obama’s nominee to head the Federal Reserve that the US stimulus programme would continue until the economy improved and Reserve Bank of India governor Raghuram Rajan played down concerns on core inflation and the fiscal deficit. However, key benchmark indices failed to hold on to early gains as inflation based on the wholesale price index rose to an 8-month high. WPI for October accelerated to 7%, mainly driven by higher fuel and manufactured goods prices. While fuel and power inflation for October rose to 10.33% from 10.08% in September that for manufactured products was reported at 2.5% versus 2.03% in September. Food inflation rose to 18.19% from 18.4% in September. Primary articles inflation came in at 14.68% versus 13.54% in September. “Halloween might be behind us, but inflation is still trick or treating,” Leif Eskesen, chief economist for India and Asean at HSBC, said in a note. “This underscores the need for stepped up structural reform implementation and a hawkish central bank to scare away the inflation ghost.”

• Reebok India Targets 40% of Total Sales From Women: Fitness brand Reebok India is targeting 40% of total sales from women customers as it plans to open 100 fit-hub concept stores by April 2014. “There is a big emphasis on focusing on women consumers. We are seeing big increase in the percentage of women’s business... we are targeting 40% business from women’s stores as we open 100 fit-hub stores by April 2014,” Adidas Group India Managing Director Eric Haskell said. Adidas Group owns the Reebok brand. At present, contribution from women customers to Reebok's turnover is under 30 per cent. “This (women's segment) is a growing category. We are focusing on it to drive growth,” Haskell said.

• Intel Sees Growth Opportunity in Internet-of-Things: Intel is betting on more pervasive use of computer chips in all walks of life, especially in Asia Pacific where economies are growing at a fast clip, to drive its future growth. In India, rise of better infrastructure and greenfield technology deployments will drive its next phase of growth and the company is in conversations with potential clients in transport, energy and manufacturing sectors, a senior Intel executive told ET. “We view the internet-of-things driving the next wave of computing. Early indications from India are that we are seeing lot of interest around these new solutions,” said Rick Dwyer, vice-president of sales and marketing group and general manager of worldwide embedded systems group at Intel. Internet-of-things refers to the growing trend of devices such as refrigerators, washing machines, cars, air conditioners and medical devices getting connected to the internet. This helps in collecting data from such devices or to control their operation via internet. In a global ranking that assessed different countries’ readiness to drive the internet-of-things trend, India was ranked 16th by IDC. The Santa Clara, California based company said it has set up a new business unit, called the ‘internet-of-things solutions group’, to broaden its reach in this segment, particularly in markets such as India, China and Indonesia where enterprises are now deploying intelligent technology systems to improve operational efficiencies. Dwyer said in markets such as India, Intel expects to see the emergence of smart cities, where intelligent devices with embedded chips become critical components. “It’s hard to say how big the internet-of-things business is going to be for Intel, but every source suggests the growth is going to be in billions,” Dwyer said. 

• Kenneth Cole to Explore JV Possibility with Reliance: “Congratulations to @Sachin_rt ‘Cricket's God of Gods’ playing his last game in India, distracting all as we try to work. #ThankYouSachin,” American fashion designer Kenneth Cole tweeted even as the cricketer was out in the crease at Wankhede Stadium in Mumbai. Cole does not seem to follow cricket or know Sachin Tendulkar well, but the moment he figured the importance of the day for cricket fans in India, he put out a candid message in the master blaster's honour. And he himself is not distracted. Cole is here to meet his local partner Reliance Brands for the first time after the launch of his namesake fashion wear brand last year and, among other things, discuss the possibility of forming a joint venture. “We plan to talk about it,” he told ET when asked about the possibility of having a joint venture with Reliance Brands, which currently is his firm Kenneth Cole Productions’ master franchisee in the country. During his trip, Cole will interact with his counterpart Indian designers, see shopping malls to understand consumer behaviour, and chalk out expansion plans including opening new stores and sourcing products with his local partner. Currently Kenneth Cole products such as shoes, apparel and accessories are sold at seven mono-brand outlets and two shop-in-shops in the country. Cole said he does not have any “financial agenda” in his mind. “I do not go in any market just to make money. We are trying to make an impact and have a healthy working partnership and the rest will follow,” he said. “Part of the plan here is to walk around in the malls, understand the domestic market and see what other global brands are doing here,” he added. Cole is also looking at India as a sourcing destination for the brand's global operations. “I was making handbags in Kolkata about 20 years ago. And now we are also making clothing and apparel in Delhi and NCR. We are doing a lot of development here which we never did before,” he said. The designer currently owns 80% of the equity in Kenneth Cole Productions and the rest is with investors and strategic advisors, who are also on the company's board.

• KyaZoonga co-founder faces chin music: Six years ago, when Neetu Bhatia, a cricketerturned-investment banker, decided to get into the online sports ticketing business, little did she knew that she would land on a sticky wicket. Not just once, but twice. Being the official ticketing partner for batting legend Sachin Tendulkar’s farewell match, Bhatia’s KyaZoonga earned more brickbats than bouquets. But the online firm was expecting this – it had faced a similar situation in 2011 during the ICC World Cup. The website went live with the ticket sale for Tendulkar’s 200th and final Test match on Monday at 11 am but soon crashed. “This always happens during landmark events. No matter how much you prepare to handle the deluge, it is impossible to make everybody happy. With a skewed supply and demand ratio, there isn’t much we can do,” said the 38-year-old entrepreneur, citing similar episodes during international events like the London 2012 Olympic Games and the upcoming 2014 FIFA World Cup.  KyaZoonga competes with Bookmyshow, in which US venture capitalist Accel Partners pumped in $18 million last year, and it has the lion’s share of the online entertainment ticketing market. Bhatia was a state-level cricketer and wanted to play for the country but destiny had other plans. After graduating from a Pune engineering college, she went off to do a masters from the Massachusetts Institute of Technology (MIT). She later worked as a consultant and investment banker with McKinsey, Lehman Brothers and the Bank of Montreal in the US before donning the entrepreneurial hat. At the Bank of Montreal, she worked for a long time dealing with clients like Time Warner, Google, Cingular and AT&T.

• With 254 million users by 2014, India to beat US in internet reach: Study: As over 200 million Indians log onto the internet, the country will surpass the United States as the second largest web market in the world after China, by the end of next year according to a new report. The Internet and Mobile Association of India said India will have over 213 million users by the end of December. "This phenomenal growth will spark off new web-based startups in the consumer internet space. Travel and e-commerce are areas to watch-out for," said Subho Ray, president of IAMAI. While it took a decade to move from 10 million to 100 million, the next hundred million users have been added in just three years. IAMAI which co-authored the report with research agency IMRB estimates that decline in smartphone prices and internet data plans will catalyse greater adoption and catapult the user base to 254 million by end 2014. "India is all set to see a wave of new web businesses, which will entirely leap frog to the mobile and not even touch the PC," said Phanindra Sama, cofounder of online ticketing venture RedBus, which was sold to Ibibo Group for about $100 million (Rs 600 crore), this year. "The future crop of most successful entrepreneurs will own web based businesses," he said. India has also seen a demographic shift in past 12 months. College goers under the age of 21 years have become the largest category of internet users accounting for about 60 million internet users in the country. Rural India with about 72 million Internet users is also a hot target for internet startups. The dramatic growth of internet in India is also attracting overseas Indians to the country's thriving startup ecosystem, similar to what happened in China a decade ago. "There is much more opportunity in India," said Rohit Chaddha, who returned from the UK to establish online food delivery platform FoodPanda last year and has raised funding from German investment firm Rocket Internet and iMena Holdings from West Asia. "VC money flows to markets which have large problems to be solved with startups solving them, India is one such market," said Deepinder Goyal, 30, cofounder and CEO of Zomato, an online food guide, which raised $37 million this week from Sequoia Capital and InfoEdge, valuing the company at over $150 million. For global internet corporations too, India is now the preferred choice for new investments. Google has over 100 million users in India, while Facebook has about 82 million.

International:

• Man Utd reports record revenues for first quarter: Manchester United has reported record revenue of £98.5m for the first three months of its financial year. The 29% revenue rise came after a 63% jump in sponsorship income and an increase in earnings from TV deals. There were 12 new sponsorship deals signed, including one with Russian airline Aeroflot. The club predicts revenues for the whole year of £420-430m, bringing it closer to Europe's wealthiest clubs, Real Madrid and Barcelona. Staff costs for the quarter rose by 31% to £52.9m.

• Heinz says three North American plants to close: Food maker Heinz has announced the closure of two plants in the United States and one in Canada. The firm says 1,350 jobs will be lost, which adds to the 600 job cuts announced in August. Heinz was bought in June by Berkshire Hathaway, the investment firm owned by Warren Buffet, for $12.3bn. The cuts total 200 jobs in Florence, South Carolina, 410 jobs in Pocatello, Idaho, and 740 employees in Leamington, Ontario, in Canada. Production will be switched to other plants, which will receive fresh investment and new staff. Heinz will employ around 6,800 staff in North America after the changes come into effect.

• PlayStation 4 v Xbox One: Experts on next-gen battle: The release of the PlayStation 4 in North America - it goes on sale in Europe and Latin America in a fortnight - is seen by many as the true dawn for next-generation console gaming after the troubled launch of Nintendo's Wii U. Early reviews of Sony's new machine have praised its graphics for looking "cinematic"; commended its latest DualShock controller's added touchpad and redesigned thumbsticks and triggers; and remarked that the console is much quieter and easier to navigate than the seven-year-old original PS3. In a week's time Microsoft fires back with the launch of the Xbox One. It will be more expensive, but includes a more advanced body-movement sensor in the Kinect; better voice recognition; and a more ambitious bid to take charge of your living room thanks to its ability to control satellite and cable TV set top boxes. The revelation that two cross-platform launch titles - Battlefield 4 and Call of Duty: Ghosts - both feature higher resolution graphics on the PS4 than Xbox One, has played to Sony's favour.

• Under Armour to Acquire MapMyFitness: Under Armour is branching out into the digital space. The Baltimore-based active wear brand said today it would pay $150 million to acquire MapMyFitness, which makes popular GPS-based fitness tracking applications. More than 20 million athletes use the tech firm’s MapMyRun, MapMyBike and other programs — and another 200,000 users sign up each week. The company’s apps help runners, for instance, plot out their routes, track their progress and speed, and keep tabs on their friends’ workouts. “This partnership is about Under Armour enhancing our digital expertise to drive the future of performance innovation for the global athlete community,” said Kevin Plank, founder and chief executive officer of Under Armour Inc. “We will build on the community of…users that MapMyFitness has cultivated in the connected fitness space, and together we will serve as a destination for the measurement and analytics needs of all athletes. Innovation has always been at the core of our company, and now we are better positioned to design open, digital products for the athlete of tomorrow and become more proactive in providing solutions that will help people across the world lead healthier lifestyles.” MapMyFitness will operate as a wholly owned subsidiary of Under Armour and will continue to be based in Austin, Tex. The deal is expected to close by the end of the year and will be paid for with borrowings under the company’s revolving credit facility, cash on hand or a combination of the two. Under Armour also plans to evaluate longer-term funding options for the transaction. The planned acquisition did not change Under Armour’s 2013 financial guidance and outlook for next year.

• Glenn J. Rufrano Named O'Connor CEO: Glenn J. Rufrano, a 30 year-veteran of commercial real estate and former chief executive officer of Cushman & Wakefield, has joined O’Connor Capital Partners as chairman and ceo. Rufrano acquired a full partnership stake in O’Connor Capital, a privately owned, independent real estate investment, development and management firm. He was a founding partner at The O’Connor Group, the real estate company’s predecessor.  O’Connor Capital Partners has approximately $3.5 billion of assets under management including 14 million square feet of properties. Over the past three years, the firm has invested $1.7 billion in retail properties ranging from high-street retail to Class A malls. Recently, it acquired a large joint venture interest in six malls owned in partnership with the Westfield Group. The company also invests in residential real estate and is based in New York City, with a regional office in Mexico City.