Daily News Digest- 11th March'14

Thought of the Day:

“If you don't stand for something you will fall for anything.”
Peter Hamilton

Did you know?

The largest air force in the world is the US Air Force. The second largest air force in the world is the US Navy.

India:

Apple Seeds Smaller Stores to Enjoy the Fruits of Success: Apple plans to go local with a vengeance, setting up small, neighbourhood shops in big cities and tier-II markets, in a bid to get closer to potential buyers as it pushes ahead with an India-specific strategy aimed at trying to grab market share from Samsung. The shops will be set up by Apple distributors Redington and Ingram Micro besides existing trade partners and follows the revival of the iPhone 4 for sale in India and other emerging markets, which gave buyers who covet the brand the option of a phone that costs much less than latest models. Apple has also directly approached some trade partners and retailers regarding setting up neighbourhood stores. Samsung is widely present in the Indian retail market place, offeringsmartphone and tablets through more than 1,000 Smartphone Cafes. Apple is late to the game, only having seriously focused on India in the last two years but having since then given the local management a freer hand. Apple India has sought to push phones and tablets through exchange and finance programmes.

Unilog Forays into Luxury Retail Biz: Bangalore-based Unilog Content Solutions has forayed into luxury retail through a new company Fervour, which will sell Italian brands such as Nina Ricci, DSquared2, Iceberg and Frankie Morello through alicensing agreement. Fervour will start its operations in India from a multi-brand retail outlet in Bangalore. “I had inherited interest for fine living and felt deprived that why these brands are not available in our country. This made me to look for opportunity in the luxury market, which is more confined to Delhi, Mumbai and Bangalore. Luxury is a slow but growing market but there is huge potential,” says Vatsal Poddar, vice chairman of Fervour. The first store spread over 2,000 sq ft opened on the upscale at Vittal Mallya Road, a hub for luxury brands in Bangalore. It houses men’s and women’s apparel, accessories and perfumes, which can go up to . 100,000. The company has a licensing agreement with the European design houses that has made a mark in their own market. Fervour, which is betting on niche luxury market through its multi-brand retail concept, plans to strengthen its presence in Southern cities like Chennai and Hyderabad over the next three years, before going to other markets like Mumbai, Delhi and Kolkata.

Ex-Apple CEO John Scully's Inflexionpoint to launch mobile phone brand Obi in April: The name is Obi. That's the mobile phone brand which will be launched by John Sculley in April in India, a market where the former Apple CEO plans to grow his company's IT and telecom distribution business to $1 billion in two years. Sculley-promoted Inflexionpoint will initially invest about $20 million towards setting up a design centre, supply chain, sales and marketing network to launch the brand in the country, which will be scaled up gradually as business improves, the company's Asia chief executive Neeraj Chauhan said in an emailed response to ET's queries. India will be the company's first stop for investments, marketing and sales, before spreading the handset brand and business to growing markets in Asia Pacific, Middle East and Latin America. Singapore-based Inflexionpoint, an IT distribution company, is entering the mobile device market for the first time globally. "Mr Sculley is quite excited about the project and actively provides strategic inputs. We benefit from his marketing and branding insights. He has committed to travel to India every quarter to oversee this project," said Chauhan who will oversee the Indian business and investments.

Indian wearable device raises $200k online: A wearable device developed by a 23-year-old Indian based in Kerala has just concluded an overwhelmingly successful campaign on crowd-funding platform Indiegogo. Fin, a tiny hardware product that you can wear on your thumb as a ring and which converts your whole palm into a gesture interface, has raised about $200,000 from some 1,600 people around the world who have pre-ordered the product. Fin's initial target was to raise $100,000. But in mid-February, when it found its target could be achieved faster than anticipated, it extended the campaign's deadline to March 9, resulting in a doubling of its collections. This is the second Indian hardware-cum-software startup to have had a great innings on a crowd-funding platform in recent times. Late last year, Gecko, a coin-sized electronic device with a multitude of uses and developed and marketed by a Bangalore startup, raised orders worth $135,485 - more than double the initially targeted $50,000. Fin has been developed by Rohildev N, who grew up in Malappuram in Kerala and who graduated from Kathir College of Engineering in Coimbatore in 2012. Eight months ago, he established RHL Vision Technologies at the Startup Village in Kochi to work on touchless technologies, a project he started during his final year of engineering.

India to get first H&M store in November: Clothing retailer H&M Hennes & Mauritz AB (H&M) will open its first store in New Delhi by the end of this year since it has fulfilled all legal requirements to establish a local entity.“If everything goes right, the store should be open in the first week of November,” said a person familiar with the development who declined to be named. The Swedish firm was the first fashion label to announce 100% foreign direct investment in the country, after India relaxed policies governing the entry of single-brand retailers. It said in December that it will invest Rs.720 crore and open 50 shops in the country in the next few years. The company also wants to sell its products online after local laws permit foreign brands to establish a retail presence on the Internet, said people aware of the development who requested anonymity. The young Indian shopper is increasingly demanding accessible and trendy fashion wear, spurring demand for labels such as H&M, Forever 21 andZara, of which the latter has seen some success in the domestic market. H&M competes with Spanish retailer Inditex that owns brands such as Zara and Massimo Dutti, retailing trendy clothing and accessories for women, men, teens and children, mostly in Europe and the US. Zara entered India in 2009 through a joint venture with Trent, the retail arm of the Tata group.

From E-comm to B-comm: The Bansals get it right: Even a decade ago, the name "Bansal" would have brought in images of coaching classes in Rajasthan's Kota, but today it is the common factor binding the who's who of India's fledgling e-commerce sector. Five young men who answer to that name have emerged as trailblazers of Indian e-commerce, taking on global biggies like Amazon and eBay for top honours in the country's exploding market for online retail. Online marketplaces Flipkart and Snapdeal, apparel retailer Myntra and eyewear retailer LensKart all have Bansals at the helm. Such is their clout that they account for nearly Rs 10,000 crore of the total online retail pie of about $2 billion. But their adeptness at trade and commerce is not a state secret. As a sub-sect of the Aggarwal community, the Bansals are known for running a tight ship when it comes to business and entrepreneurship. "We (Bansals) have the math, finance and data skills that are extremely important for e-commerce," said Rohit Bansal who teamed up with schoolmate and Wharton alumnus Kunal Bahl to set up online marketplace Snapdeal in 2010.

Retailers build a fortress against online onslaught: After reporting losses of close to $200 million in the holiday quarter, Radio Shack, the American chain of electronic retail stores, announced last week that it would close a fifth of its 5,000 stores. Competition from online majors, especially the largest in the world, Amazon, is said to be behind the decline of Radio Shack and many others across product categories. The US media has compared the sales numbers of Amazon and Radio Shack to bring out the disruptive nature of online retail: in 2003, both companies posted annual sales of $5 billion; in 2013, Amazon reported $75 billion and Radio Shack, $3.5 billion. Underscoring that point rather tellingly, popular American website Salon wrote: "When you can't compete on either price or selection, you are doomed." That perhaps is the fear playing out in the Indian retail market too, where e-commerceis nascent but is growing at a furious pace (estimated at 88 per cent in 2013, to touch $16 billion), in the process making brick-and-mortar companies nervous, to put it mildly. Tension between online and offline retailers has been simmering for a while, but it came to the fore last month when Chinese computer manufacturer Lenovo posted this advisory on its website: "e-commerce websites like Flipkart, Snapdeal and Amazon India are not authorised Lenovo resellers. We encourage you to check your warranty entitlements when you buy from these websites." Lenovo then listed its authorised stores. A Lenovo executive says a lot of resellers have cropped up at some of these sites, largely due to a marketplace kind of a set up, and they were selling at very low predatory prices. "These, we believe, may or may not be authorised or genuine products," he says. Earlier, Toshiba and Nikon too had put out similar advisories.

Indian textile industry working to boost business in Bangladesh: Indian textile businessmen are focusing on increasing the country's market share in Bangladesh to offset the impact created by China in last few years, say industry experts. "Bangladesh is a natural trading textile partner for India. But for last two years, China is increasingly consolidating its footsteps in the Bangladeshi markets," Sanjay Murarka, partner of Kolkata-based FM Textile Private Limited, told PTI yesterday on the sidelines of the ongoing International Ethnic Week (IEW) Goa 2014. A proper and concentrated focus on Bangladesh markets can work wonders for the textile industry, which is amongst the top trading communities in India, he said. "From Surat itself, the trade of textiles to Bangladesh is to the tune of Rs 1,000 crore," Murarka said. The ongoing IEW, which has 1,000 Indian and 400 international visitors joining hands, has provided Business to Business (B2B) platform for buyers and the sellers. Surat Dreams, a Gujarat-based textile business initiative, which has organised the event, expects over Rs 1,000 crore business deals to be signed among participants. The textile businessmen from the US, UK, Bangladesh, Dubai, Colombo are looking out to expand their horizons during the two-day-long event that began here yesterday.

International:

Adidas, Nike battle for football supremacy in World Cup year: With the football World Cup only three months away,Adidas AG and Nike Inc. are squaring up for a marketing battle to match the fierce on-field football rivalry of nations like Brazil and Argentina. The sportswear giants dominate a football kit industry worth more than $5 billion annually. They vie for the title of market leader in the supply of hi-tech boots and jerseys to fans inspired by Argentine Lionel Messi, who wears Adidas, or new Brazilian idol Neymar, who is in the Nike camp. A bootmaker since the 1950s and a World Cup sponsor, Germany’s Adidas regards soccer as its territory and wants to avoid being overtaken by younger but larger American rival Nike, as has happened in other sports. “Forget all you may have heard or written about a weak Adidas performance in football in 2013. We are leading this category that is so close to the Adidas DNA,” chief executive Herbert Hainer said last week. “2014 is a football year and it will be an Adidas football year,” he added, targeting record annual soccer-related sales of €2 billion ($2.8 billion). However, Hainer conceded that competition is fierce, with the top two brands sharing upwards of 80% of the market for many football products. Nike has built its business swiftly, having got heavily involved in soccer only 20 years ago when the World Cup was played in the US. It generates revenues of $2 billion from the sport and calls itself the leading football brand. It will provide kit for hosts Brazil and a total of 10 of the 32 finalists this year—outscoring Adidas and Puma AG in that regard.

Peter Philips Named Creative and Image Director of Christian Dior Makeup: Peter Philips has been appointed creative and image director of Christian Dior makeup, effective immediately, the company announced. “I am honoured by the responsibilities that are entrusted to me by Christian Dior makeup, whose values, savoir-faire and innovation I respect,” said Philips. “His talent and his unique and modern vision of beauty are recognised around the world,” Claude Martinez, president and chief executive officer of Parfums Christian Dior, added in a statement. Philips stepped down from his previous role as global creative director of Chanel cosmetics in 2013. During his tenure at Chanel, he garnered widespread industry acclaim for his inventive use of unexpected materials, his novel product lines and the artistry of his beauty looks for the house’s runway shows and campaigns.

Retail M&A Market Seen Favoring Sellers: Buy, buy, buy — or should that be sell, sell, sell? Investment professionals expect 2014 will be an active mergers and acquisitions market for retail and apparel, compared with the levels of 2013. And given current deal flow activity, executives at companies prowling for good assets to acquire say the year is shaping up to be a seller’s market. Competition is expected to be keen from both strategic and financial buyers, as well as high-net-worth individuals and sovereign wealth funds. Research firm Preqin estimated that private equity firms alone, on a global basis, ended 2013 with $1.07 trillion available for deals this year, a combination of the $554 billion raised last year plus the uninvested capital from prior years. Adding to the competition for good assets is the continued open window for initial public offerings, allowing owners of assets available for sale to consider testing the IPO waters instead. Last year, global annual IPO proceeds rose 37.5 percent to $137 billion, the largest gain since 2004, when U.S. IPOs had annual proceeds totaling $51.9 billion, according to IPO investment advisory firm Renaissance Capital.

Chanel Confirms Turkish Customs Probe: Chanel acknowledged Monday that it is the subject of an investigation by Turkish Customs authorities, and that it is cooperating fully. However, the French fashion house stressed it has yet to be officially notified of any wrongdoing under Turkish law, and it took sharp exception to “a number of accusations in the media, which we refute.” Daily newspaper Hürriyet was among Turkish media to report on the Customs probe. Chanel noted that it conducted an internal audit in 2012 that revealed “major irregularities and failings” in the local management of its two boutiques in Turkey. “Those irregularities led us to terminate the employment of the manager of our boutiques at the time for noncompliance with our internal policy and business rules,” Chanel said. “This situation is absolutely exceptional, and since then we have further tightened our controls.” The privately held firm added that it “takes the utmost care to comply with the regulations in the countries where we are present, and we remain ready to assist the authorities and the legal system in bringing the facts of this case to light and taking all necessary action.”

eBay cuts chief executive John Donahoe's pay by 53%: E-commerce giant eBay has cut the total compensation of its chief executive, John Donahoe, by more than half. Mr Donahoe was paid $13.8m (£8.3m), including salary and bonus, in 2013, down from $29.7m a year ago. While his basic salary rose by 2%, Mr Donahoe's annual cash incentive fell by 43% from a year earlier. The company said that while their chief executive had performed well, the firm's financial performance "did not fully meet expectations". eBay generated earnings of about $850m in the final quarter of last year - an increase of 13% - but its results have not been meeting expectations. However, the main explanation for the severity of Mr Donahoe's pay cut is his one-time award of $14.8m in performance shares in 2012, which doubled his compensation that year. His sharp drop in pay comes amid an ongoing battle between the firm and activist shareholder Carl Icahn over its online payments business, PayPal. Mr. Icahn has called on eBay to spin off PayPal, which it acquired in 2002 for $1.5bn (£905m) It has been a key driver of eBay's growth as an increasing number of consumers turn to online shopping, prompting increased use of online payment services. The division accounts for nearly 40% of the firm's total revenue. Mr. Icahn, who owns more than 2% of eBay's shares, has also nominated two people to eBay's board. However, on Monday eBay said that its board of directors "does not endorse any Icahn Group nominee or the Icahn proposal". It also urged shareholders to vote against the nominees put forward by him.

Sears, Kmart, American Apparel Among Least Engaged Brands: Sears Holding Corp. had both its brands place among the 10 lowest ranked in customer engagement in a survey by brand consulting and research firm Brand Keys. Kmart finished third from the bottom and Sears sixth from the bottom in this year’s distillation of the lowest-ranked brands. The bottom 10 also included American Apparel Inc. in the seventh slot and Coty Cosmetics at number eight. Blackberry finished lowest among the 555 brands studied by Brand Keys with a ranking of 52 percent, meaning respondents rated it as satisfying just more than half of the attributes consumers look for in an ideal brand in its category. Quiznos, the embattled sandwich maker that has drastically cut its store count in a battle against insolvency, was second at 57 percent, followed by Kmart at 59 percent, Sony e-readers at 60 percent and the Wow search engine at 60 percent. Sears qualified for the sixth slot with a rating of 64 percent, followed by American Apparel at 65 percent and Budweiser (regular) at 70 percent. Coty Cosmetics hit the ninth spot at 71 percent, and Volkswagen rounded out the bottom 10 with a rating of 79 percent.

Currency:

· 1 USD= ₹ 60.809

· 1 EUR= ₹ 84.328

· 1 GBP= ₹ 101.197

· 1 AUD= ₹ 54.861

Glitter Meter: India

	Gold (INR/10g)		Silver (INR/kg)
City	Current	Change	Current	Change
Chennai	30340.00	30	45875.00	15
Mumbai	29860.00	30	45875.00	15
Delhi	29620.00	40	45875.00	15
Kolkata	29740.00	30	45875.00	15

World Indices:

Exchange	Last	Change
DJIA	16418.68	-34.04
FTSE 100	6689.45	-23.22
CAC 40	4370.84	+4.42
DAX	9265.50	-85.25
Nikkei	15231.47	+111.33
Hang Seng	22328.80	+63.87
Sensex	21918.83	-16.00
NASDAQ	4334.45	-1.78

*Disclaimer:
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