Daily New Digest- 12th Dec'13

Thought of the Day:

Did you know?

Following made the Headlines:

India:

• Hooked To AAP, Murthy says he’ll Bat for Nilekani: Infosys Chairman NR Narayana Murthy has said that former colleague Nandan Nilekani has his vote, and the Aam Aadmi Party of Arvind Kejriwal his wholehearted admiration. Murthy, who returned from retirement in June as chairman of the company hefounded, described as a “remarkable achievement” AAP’s debut performance in the Delhi assembly election, where it won 28 out of 70 seats. “What Arvind (Kejriwal) has done is that he has redefined what is possible,” he told ET. Murthy, 67, had financially backed Arvind Kejriwal’s Right to Information awards initiative.

• Hero Acquires 60% Stake in JV with Magneti Marelli: Country’s largest twowheeler maker Hero MotoCorp on Wednesday said it has acquired 17.49-lakh shares, constituting around 60% stake, in its joint venture with Italian firm Magneti Marelli, which designs and produces advanced systems and components for the automotive industry. The JV plans to sell, distribute and market complete twowheeler fuel injection systems and components. While forming the JV, the partners had said they would invest $8.5 million in the ratio of 60:40 JV over a period of three years.

• Mercedes Benz Launches Centre of Excellence in India: German luxury car-maker Mercedes Benz on Wednesday launched its Centre of Excellence here, making India one of the few markets where the company has such an inhouse centre for customisation and experience for its high-performance models. The centre houses the Mercedes’ latest AMG range of vehicles. The objective of the Centre is to offer customer experience, under which a prospective buyer of an AMG model can customise the interiors and the exteriors, including the colour.

• Google’s Online Shopping Festival Off to a Flying Start: The second edition of Google’s Great Online Shopping Festival got off to a flying start on Wednesday with participating online retailers reporting more than 50% higher sales than normal days despite the official website for the festival going down due to technical glitches. “The response has been phenomenal,” Nitin Bawankule, industry director for e-commerce at Google India, said. “We expect the next two days to be even bigger.” This year the Great Online Shopping Festival, or GOSF, is a threeday affair with about 200 online retailers taking part. Last year, it was a one-day event with 80 participants. Infibeam.com reported 80% jump in traffic and almost 60% jump is actual transaction in the first 10 hours of the shopping festival.“By midnight, we expect traffic to go up 150%,” Shekhar Singh, head of corporate communications at Ahmedabad-based Infibeam, said. Similarly traffic and sales jumped 50% at Yebhi.com that offered 10% discount on electronic products and 33% discount on every other product they sell. Saurabh Malik, business head of Indiatimes Shopping, said Google has created enough buzz around the campaign and Indiatimes is expecting sales to go up almost five times during the three days compared to the normal days. He said Indiatimes also has been advertising about its plans for GOSF on Google and Facebook. Sportswear giant Puma said it expects its overall sales to go up 20 times this year. Manu Kumar Jain, co-founder at Jabong.com, said sales on the first day went up four to five times over usual sale. Many online retailers have even created micro sites for GOSF and some have links inviting shoppers to avail discounts. For example, UK-based shoe retailer Clarks has special GOSF price mentioned on discounted shoes and accessories. The official website for the festival, however, played spoilsport, as it was not functional until late in the evening due to technical glitches. Initially, the website went down due to an interface problem with mobile devices as Google was betting big on a chunk of traffic from mobile phones, a senior executive at an ecommerce firm said, quoting Google officials. Later, the site crashed again due to heavy traffic.

• Flipkart launches one-day delivery just days after Amazon launched similar service: Just days after Amazon announced its one-day delivery service in India, Flipkart too has announced a similar facility. Flipkart is offering this facility in Delhi, Noida, Mumbai, Chennai, Bangalore, Pune and Hyderabad. Orders need to be placed before 6pm on the previous day and such orders have an additional charge of Rs 90 per item. Ravi Vora, senior vice president of marketing at the books to jewellery e-tailer, said that the service was in response to customer demand for urgent deliveries. "Given the large volumes that we handle it wasn't feasible to address them on a case-to-case basis. We have now built the capability into our supply-chain and can now offer it as a guaranteed feature," he said. Last week, Amazon had launched one-day guaranteed delivery of products that are shipped by the ecommerce major in cities likeBangalore, Mumbai, New Delhi, Ahmedabad, Hyderabad and Pune. The orders need to be placed by 3pm the day before and there is an additional charge of Rs 99 per order. Amit Agarwal, vice president and country manager at Amazon India, had said at the time that the service will be expanded to a larger number of cities. Amazon launched an online marketplace in India about six months ago. Indian ecommerce companies, mostly startups that have been in operation for under six years, have been preparing for Amazon's entry for quite some time. Flipkart, one of the country's largest online retailers raised capital of upto $360 million (Rs 2,200 crore) fund earlier this year.

• UTV's Ronnie Screwvala backs lingerie site Zivame founded by BITS Pilani alumni: UTV founder and entrepreneur Ronnie Screwvala is leading a $6 million, or Rs 36 crore, investment into Zivame, a lingerie e-commerce startup which rides on the increasing women traffic in India's internet story. Bangalore-based Zivame — founded by 33 year-old BITS Pilani alumnus Richa Kar two years ago — is betting on quadrupling online sales to Rs 1,000 crore in the next 3-5 years. Screwvala's investment company Unilazer Ventures is pumping in most of the cash, while existing investors too are participating in this round. Zivame, which competes with other multi-brand e-tailers like Myntra and Jabong for online lingerie sales, has now raised $9 million after netting $3 million from IDG and Kalaari Capital in January this year. "We are making a non-decrepit category like lingerie more accessible and a part of fashion accessories for women. Twenty percent our women customers have never shopped online before, and in a sense we are a change agent for many of them," Kar told TOI. India has about 150 million internet users, with women comprising 39 per cent of the traffic but growing faster than men in the domestic digital economy. This is significant as internet's share of Indian GDP estimated at 3.2 per cent is the highest among the emerging countries. India's heavily fragmented lingerie market is estimated at $3 billion, dominated by unbranded players, dogged by a certain lack of shopping experience. "We invest in broad-based consumption stories, which are scalable lending itself to building a brand. Indian shopping habits in this segment has not even touched the tip of the iceberg. Online shopping will be massive as it lends to private shopping," said Screwvala, who raked in Rs 2,000 crore selling UTV Software Communications to Walt Disney in 2011. Globally, lingerie giant Victoria Secret garners over 27 per cent of its $5.5 billion from online sales. The leading domestic lingerie brands like Peri Peri and Enamor are taking cue in a rapidly transitioning market. "We started selling online just twelve months ago, but 70 per cent of our sales are already through multi-brand e-commerce channels. This amazed us. Good deals, convenience and privacy are among the key reasons driving the growth," said Akshay Mahendran, managing director of Daiki Brands, a Mumbai-based owner of Peri Peri and Biara. Kar said the latest funding would be deployed to bolster technology backbone - to improve personalization, recommendations and visual merchandising - as well as marketing to get more tier II women buy online.

International:

• Google Opens Data Centres in Singapore and Taiwan: Eyeing the rapidly growing Internet user base in Asia, especially India and China, technology giant Google opened its first data centres in Singapore and Taiwan. According to China Internet Network Information Centre, the country has a whopping 591-million internet users, while in India it is about 205 million. “Two years after we announced our plans to keep up with Asia’s Internet growth with our first data centres in the region, our facilities in Taiwan and Singapore are now up and running,” the US-based firm said in a blogpost. 

• Microsoft's Xbox One catching up its sales with rival Sony's PlayStation 4: Microsoft Corp has sold more than 2 million Xbox One video game consoles since its Nov. 22 launch, catching up with rival Sony Corp's PlayStation 4 released a week earlier. The U.S. software giant on Wednesday said it took 18 days for Xbox One's global sales to surpass 2 million. Japan's Sony last week said it took 15 days for PS4 sales to cross 2.1 million. The Xbox One, on sale in 13 countries, is selling quicker than its predecessor, the Xbox 360, and is sold out at most retailers, said Microsoft spokesman David Dennis. "We're manufacturing as fast as we can" to replenish supplies at stores during the holiday season, Dennis said. The Xbox One, priced $499 in the United States, and PS4, priced $399, offer improved graphics for increased realism and faster processors permitting smoother play, as well as numerous exclusive games. With the Xbox One, Microsoft hopes to not only entice gamers but appeal to a broader consumer base of TV fans and music lovers with its interactive entertainment features and media applications. Robert W. Baird & Co analyst Colin Sebastian in October said he expected shipments of 2.5 million to 3 million consoles for both the Xbox One and PS4 in October-December.

• Canadian retailer Hudson's Bay posts bigger quarterly net loss: Canadian department store operator Hudson's Bay Co posted a bigger third-quarter net loss, mainly due to costs related to its acquisition of U.S. retailer Saks, but reported slightly higher same-store sales from its Lord & Taylor chain. Lord & Taylor same-store sales rose 1.6 percent, the first growth since the third quarter of last year. Consolidated sales of Hudson's Bay rose 6 percent to C$984.1 million ($926.6 million). The company's net loss widened to C$124.2 million, or C$1.04 per share in the quarter ended Nov. 2 from C$14.4 million, or 14 Canadian cents per share, a year earlier. Excluding acquisition-related and restructuring costs, the company earned C$8.9 million, or 7 Canadian cents per share. Hudson's Bay completed its $2.4 billion acquisition of Saks Inc last month.

• Hilton Worldwide raises $2.35bn via share sale: The Hilton Worldwide hotel chain has raised $2.35bn (£1.4bn) from a share sale, making it the second-largest listing in the US this year. It sold 117.6m shares at $20 each, the upper end of the $18 - $21 range it had set, when it announced the sale. Hilton has said it will use the money raised through its offering on the New York Stock Exchange to pay down debt. The share sale marks Hilton's return to a public listing after being acquired by Blackstone Group in 2007. Blackstone bought the hotel group for $26.7bn in October 2007, taking it private in one of largest buy-outs before the global financial crisis. The share sale comes at a time when the global economy is showing signs of recovery and there has been a pick up in the travel industry. Hotel room rates and occupancy levels have been rising and are expected to rise further in the coming months. That has helped Hilton generate good investor interest in its share offering. The firm sold 5 million shares more than it had initially said it would. Hilton's hotel brands include Conrad, Waldorf Astoria, Doubletree, Embassy Suites, Homewood Suites, Home2Suites, Hilton Garden Inn, Hampton Inn, and Hilton Grand Vacations.

• Royal Mail to join FTSE 100 after share price surge: Royal Mail, the newly-privatised postal service, will be joining the FTSE 100 index of blue-chip companies. The company's share price has surged more than 80% since its first day of public trading on 15 October, giving it a market capitalisation of nearly £6bn. The privatisation was controversial and opposed by the Communication Workers Union (CWU), even though employees were given shares in the company. Critics say Royal Mail was undervalued by the government. Announcing its periodic rebalancing of the FTSE 100 constituents, FTSE Group said Royal Mail's promotion to the big league would take effect from Monday 23 December.

• Karstadt Taps Ikea Exec as CEO: Ending a long search and weeks of speculation, Eva-Lotta Sjöstedt has been named chief executive officer of the Karstadt department store chain, effective Feb. 24. Sjöstedt, who was previously deputy global vice president of the Ikea Group, succeeds Andrew Jennings, who is vacating the ceo post at the German retailer when his contract expires at the end of the year. The 47-year-old Swedish manager began her career as a fashion designer and then buyer for various retailers in Asia. She has held several top management positions at Ikea, both at company headquarters and in Japan and Holland, and is considered to have key turnaround experience in highly competitive markets. Such experience, industry observers say, is more than crucial in her new post. Karstadt has been involved in a bumpy turnaround process since the department store group filed for bankruptcy in 2009. Investor Nicolas Berggruen acquired the troubled chain in 2010 and, as Stephan Fanderl, chairman of the Karstadt board, acknowledged Wednesday, “In a difficult retail environment, we’ve not had an easy year.” Sjöstedt said the group’s goal must be to find new ways of fulfilling the future wishes and demands of its customers, building on the group’s tradition, experience and accomplishments to date. Calling upon the support of the 83-door chain’s employees, she said, “We must quickly make Karstadt profitable.” In September, Berggruen sold a 75.1 percent stake in the group’s three premium houses — KaDeWe in Berlin, Alsterhaus in Hamburg and Öberpollinger in Munich — as well as the 28 Karstadt Sports stores to the group’s biggest landlord, the Austrian Signa Group. Signa, in turn, has sold half of that stake to the Israeli businessman Beny Steinmetz. Reports suggest that Signa, which already owns the physical real estate of KaDeWe and 16 other Karstadt doors, is poised to take over another five Karstadt sites from the investor group Highstreet. The reports also say Highstreet plans to sell another 20 Karstadt store properties by the end of the year.