Daily News Digest- 30th June'14

Thought of the Day:

Did you know?

Following made the Headlines:

India:

• Soon You can Buy Onions Online, Courtesy Reliance: Grocery will be the sharp edge of Reliance Industries' e-commerce wedge. It plans to offer express deliveries of fresh fruit and vegetables to homes in Mumbai, making it the first such bid to bridge the last-mile connect by a large retailer. India's thirdmost valuable company will make its debut in the e-commerce business with the Mumbai grocery venture by the year-end. Reliance plans to extend its retail business into e-commerce with the promise of a wider range of goods than currently available online, battling it out with an array of rivals ranging from Flipkart to niche startups, not to speak of Amazon and eBay. As for the grocery segment, smaller firms such as localbanya.com and bigbasket.com deliver fresh products to consumers in some cities. The grocery venture, which will be run through a subsidiary, follows a successful pilot project at the Reliance Corporate Park office in Navi Mumbai. Over the past year or so, its 10,000 employees there have been buying home care, personal and pharmaceutical products along with food through the Reliance FreshProject Direct website.

• Google Tops Search for Best Workplace, Again!: If you google `India's best company to work for', the answer you will get is Google. For the fifth year in a row, Google India has emerged the country's best company to work for followed by Intel, which remains in second place for the second year. Marriott Hotels is in third spot, a sharp improvement from ninth position last year, replacing American Express, which is in fourth place. Now in its seventh year, `India's Best Companies to Work For' is a study conducted by The Economic Times and Great Place to Work Institute, based on a methodology that has been validated the world over. This year, 600 organisations spanning 20 industry categories participated in the survey of which the top 50 in the list of `India's Best Companies to Work For' were felicitated at a ceremony in Mumbai on Friday. This year saw the introduction of a Hall of Fame, whereby companies that have featured in the top 50 for five years in a row were recognised. The infotech industry has built a reputation for having best-in-class workplace practices, so it doesn't come as a surprise that more than half the companies in the top 10 are from this sector. Multinational companies, whose human resource practices are handed down from the parent, have tended to dominate the list in the past, and this year is no exception.

• E-tailers, Small Vendors Party Together in this Marketplace: When online retail started becoming popular in India, the fear was that small merchants would become uncompetitive and be forced to shut shop. What has happened, on the contrary, is that tiny brick-and-mortar sellers are proving to be the foundation on which the structure of India's online retail industry is being built. Even a couple of years ago, the socalled marketplace model linking merchants and customers was not central to the plans of companies such as Flipkart and Amazon. Instead, they were constructing an inventory-led model where they would buy goods from producer, stock them in large warehouses and deliver directly to customers. But the government intervened, preventing foreign investment in inventory-based ecommerce, thus putting the marketplace model at the centre of action.

• Hackers Targeting E-comm Sites for Ransom: India's fledgling e-commerce industry has become the target of large scale Internet attacks, which are constantly trying to bring down these websites. According to a recent report by Akamai, e-commerce industry in India has become the second largest target for distributed denial of service (DDoS) attacks by hackers after enterprises. India saw a 2.6% increase in attack traffic in first quarter, placing it at seventh position among countries with attack traffic, according to the Akamai State of the Internet Report. “We have observed a huge spike in attacks against ecommerce companies in India. The purpose of many of these attacks is to extort money from e-commerce companies as a ransom to stop the attacks,“ said Sidharth Pisharoti, country sales head, Akamai. It is still not immediately clear whether any e-commerce company in India has so far paid any extortion money to attackers.

• Star-struck AI may Dust Off Plan to Hire More Cabin Crew: Air India's top executives are set to renew discussions on hiring additional cabin crew as a way of “improving service standards“ after the national carrier recently joined global airline group Star Alliance, a person familiar with the matter said. The airline's customer-service division has raised the issue but no number has yet been proposed to the human resources department, this person said. The proposal would go against the grain of Air India's efforts to cut its massive wage bill. The airline hasn't made any such recruitment in the past few years, though a proposal had been made last year too to hire cabin crew. Air India has 3,400 cabin crew of its own and another 800 on contract. Before getting into Star Alliance, the airline had an internal target to cut the number to 2,100. The Director General of Civil Aviation (DGCA), India's avia tion regulator, has stipulated a minimum number of cabin crew for each aircraft type, but airlines usually deploy more.

• Inox in talks to buy smaller rival Satyam Cineplexes: Inox Leisure Ltd, India’s second largest multiplex chain, is in talks to buy Satyam Cineplexes Ltd in a transaction that may be valued at Rs.220 crore, signalling further consolidation in the movie exhibition business. Inox Leisure will sell treasury stock to raise funds for the acquisition, said three people familiar with the transaction, including two bankers who had sought the mandate to raise funds for the acquisition. Yes Bank Ltd has been given the mandate to sell the treasury stock and look for acquisitions. A fourth person who was approached by Inox Leisure for funds also confirmed that talks were on. The acquisition of Satyam Cineplex will strengthen Inox Leisure’s presence in North India, a territory that is dominated by larger rival PVR Ltd. Ajay Bijli-controlled PVR overtook Inox by acquiring Cinemax India Ltd in November 2012 to become the largest multiplex operator in India.

• PayPal goes slow on India, focuses on analytics: The Indian e-commerce market may be booming with a number of local players seizing the opportunity to bolster their presence in the online payments segment, but eBay Inc-owned online payment platform PayPal Inc. is yet to decide on its re-entry into this market. While PayPal launched its service in 10 more countries this month, taking the number of markets it is present in to 203, it is yet to decide on its plans for India. “It’s on the plans, but (I) can’t give you a definite answer to announce that this is the timeline or strategy at this point,” Sam Hamilton, vice- president of data technology at PayPal, said in an interview in Hyderabad. Owned by eBay, PayPal moved out of India in phases because of Reserve Bank of India (RBI) regulations that treated it as a quasi-financial body since it offers services like the online wallet that allows users to store money in the online account.

• Chinese handset maker Xiaomi to make India debut on Flipkart: Following the footsteps of Motorola, Chinese handset maker Xiaomi is also teaming up with e-Commerce major Flipkart to launch its handsets in India. Touted as the 'Apple' of China, Xiaomi had launched its official website in India earlier this month, announcing its entry into the fiercely competitive Indian smartphone market in the next few weeks. According to sources, Xiaomi is expected to bring two smartphones in partnership with Flipkart in the next 2-3 months. They added the agreement between the parties is in the final stages and the launch on the online market place will happen next month.

International:

• Google Execs Visit Cuba to Promote Open Internet: A team of top Google executives is visiting Cuba to promote open Internet access, according to a dissident blogger who says she met the group in Havana. The team, led by executive chairman Eric Schmidt, met with Cuban officials as well as independent people in the technology and digital field, according to a report on the independent news website 14ymedio.com, which was started last month by blogger Yoani Sanchez. Google is on an official two-day visit “to promote the virtues of a free and open Internet,“ the report on 14ymedio.comsaid. Schmidt appeared to confirm the report when he retweeted a message on Twitter posted by Sanchez about the visit. Neither Google nor the Cuban government made any official statement about the executives' presence in Cuba. Cuba does not allow open Internet access. Only 2.6 million out of a population of 11.2 million have Internet access, almost entirely limited to government-run centres, foreign companies and tourist hotels. Most of those who do have ac cess are only been able to explore a limited, statecontrolled basket of approved websites.

• American Apparel Adopts Poison Pill Defense: American Apparel Inc. said Saturday a special committee of its board of directors has adopted a one-year stockholder rights plan — otherwise known as a “poison pill” — aimed at strengthening the board’s ability to protect shareholders. “The company’s shareholder rights plan was adopted in response to reports of rapid accumulations of the company’s outstanding common stock,” the company said.

• How to Map an International E-commerce Strategy: Taking your business global is one of the biggest challenges retailers face in this challenging economic climate. The answer? Don’t force it, said Uwe Bald, vice president of international business at the Hamburg, Germany-based Hermes NexTec. “The strategy is highly dependent on the products being sold,” said Bald, in an interview following the Internet Retailer Conference and Exhibition (IRCE) here this month. Hermes NexTec is a division of Otto Group and supplier of e-commerce services to fashion brands like Escada and mainstream retailers like H&M and Lands’ End. Hermes is unrelated to the luxury company of the same name. Its parent company, Hermes Group, generated revenues of $2.8 billion in 2013. 

• Tui Travel and German parent Tui announce merger plan: German travel giant Tui and its UK subsidiary Tui Travel have announced plans to merge following years of speculation about such a deal. The firms said a merger would deliver a number of benefits, including 45m euros (£36m; $61m) of cost savings a year. Tui currently owns a 55% share in its UK subsidiary. The share prices of both companies rose following the announcement, with Tui up 3.5% in Frankfurt and Tui Travel up 4% in London. "The independent directors of TUI Travel and the executive board of TUI AG are pleased to announce that they have reached an agreement in principle on the key terms of a possible all-share, nil-premium merger of TUI Travel and TUI AG," a joint statement said. Under the proposed terms of the deal, Tui Travel shareholders would receive 0.3999 new Tui shares for each Tui Travel share they own. The merged company would have its headquarters in Germany but would keep a listing on the London Stock Exchange.

• Ikea launches the first website on Instagram: Ikea, with the help of ad agency Instinct, created a new website to launch its PS 2014 collection and the website is built entirely through Instagram. The agency released a short video to show how the Instagram site works. Each of the 34 items in the PS 2014 line has its own Instagram account so shoppers can take a closer look at the products and get inspired when decorating their own spaces at home.

• Bebe Exits 2B Business: Bebe Stores Inc. said it will exit its 2B business by July 5, the end of fiscal 2014. The company also has identified key initiatives as part of a cost-reduction program that is expected to generate $9 million to $10 million in annualized pretax savings beginning in fiscal 2015. The company is exiting 16 2B mall-based stores and its e-commerce business so that the specialty chain can focus on its core Bebe brand retail and outlet stores, e-commerce and international licensing businesses. The company said the cost-reduction program will target both direct and indirect spending across the organization, including plans to reduce corporate and field management positions.

• Rick Owens Opens Flagship in Milan: Rick Owens’ first flagship has opened in Milan, located in the artsy Brera district, in Via Monte di Pietà, near the La Scala theater. Created by Los Angeles architect Patrick Tighe, the boutique’s minimal design includes pillars in rough wood, walls with a white cement casting and mirrors all around. “The architect has created monoliths of environmentally responsible Styrofoam which have been digitally etched with the music of the finale to “Salome”, my favorite opera by Richard Strauss — a recurring motif in everything I do," said Owens. The boutique carries the women’s and men’s main lines as well as DRKSHDW, the denim collection, and the Lilies lines, a collection of draped jersey. Pieces from Owens, furniture collection will rotate in the boutique.

• Dov Charney Inks Deal to Increase Stake in American Apparel: Dov Charney is doubling down. The founder of American Apparel Inc. — who was ousted as president, chief executive officer and chairman last week — plans to borrow to buy more shares in the company. The former executive inked a deal with Standard General, which plans to buy up at least 10 percent of the company’s stock and then loan Charney the money to buy that stake, according to a filing with the Securities and Exchange Commission.

• Todd Vogensen Named CFO of Chico's: Todd Vogensen has been promoted to senior vice president and chief financial officer of Chico’s FAS Inc. He succeeds Pamela Knous, who’d been executive vice president and cfo and has left the company. Vogensen reports to Kent Kleeberger, executive vice president and chief operating officer, who served as cfo for over three years until Februrary 2011. Vogensen is a five-year veteran of Fort Myers, Fla.-based Chico’s who was most recently senior vice president of finance and earlier vice president of planning and strategy and vice president of investor relations.

• SuperGroup Acquires Its Scandinavian Distributor : SuperGroup, the parent company of the British streetwear brand Superdry, has purchased the SMAC Group, SuperGroup’s long-time Scandinavian distributor. SuperGroup said the business was purchased for an “undisclosed sum” and paid for in cash from the firm’s own resources. The acquisition means that SuperGroup will now have the rights to trade the Superdry label in Denmark, Norway and Finland. The company said the acquisition will help SuperGroup to meet its “ambitious plans for the region,” so the firm can invest its own capital in its store roll-out, improve wholesale margins and retain local operational and management expertise. SuperGroup will work with the existing SMAC team, led by Stine Elmkvist and Lars Thygesen. SMAC is based in Aarhus, Denmark, and has four owned Superdry retail stores, eight franchise stores and what the company called a “thriving” wholesale business.