Daily News Digest- 14th Aug'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Kaun Banega Crorepati? 400 Already in Flipkart: About 400 employees with stock options at online retailer Flipkart have hit the crorepati' jackpot because of the surging valuation of the online retailer. The bonanza is reminiscent of the times when thousands of employees -among them office assistants, drivers and receptionists -at another Bangalore-based company Infosys hit Esop paydirt. “About 400 of the employees who own a stake have now become crorepatis,“ said a person who has direct knowledge of the employee stock option scheme at Flipkart, which received $1 billion 6,000 crore) in funding last (month, valuing it at $7 billion. About one-fourth of Flipkart's 7,000 full-time employees own a stake in the company. At the senior-most level, nearly 20 employees who are at the grade of senior vice-president or above and joined over two years ago are now dollar millionaires, meaning their stock options are worth at least on paper. The firm's stock options get vested over four years.

• Indian-origin professor wins Maths 'Nobel': Early in the morning on Wednesday, despite recuperating from an eye surgery, NR Narayana Mur thy took the unusual step of writing to the editors of major newspapers and TV channels. Murthy was excited about a young mathematician he had known, Manjul Bhargava of Princeton University, who had won the Fields Medal for mathematics on Tuesday. His aim was to sensitise editors to the importance of this event, and to tell young Indians what to strive for. “A Fields Medal is harder to get than a Nobel Prize,“ Murthy told ET later. “We knew he was extraordinary. “ Bhargava is the first Indian-origin mathematician to get the prize. He is not always known through his Indian origins, and is often called a Cana dian-American mathematician. But although Bhargava did not grow up in India, his Indian roots are deep. He learned tabla with Zakir Hussain and is an accomplished player. Bhargava loves Sanskrit poetry, especially the mathematics of its rhythms. But as a mathematician, he was a star, one of the best among the best. “This award is a tremendous inspiration for Indian students and teachers of mathematics,“ says Vasudevan Srinivas, senior professor at the Tata Institute of Fundamental Research (TIFR) in Mumbai. Bhargava is a regular visitor to India, and speaks often at conferences in the country. “His clarity of thought when he gives lectures is impressive,“ says Ramesh Srikantan, a professor at the Indian Statistical Institute in Bangalore, who was a post-doctoral researcher at Princeton while Bhargava was a graduate student there. Those who know him say that what he explains always seem simple. “We feel why didn't we think of it?“ says Srikantan. Bhargava's Indian connections are deep even in mathematics. His first major work, actually his PhD thesis, cited the work of only a few mathematicians, one of which was Srinivas Ramanujan. The other was Friedrich Gauss, the greatest mathematician who ever lived. It is rare for a mathematical paper to mention so few authors, and it was because so few people had succeeded in what he did. Gauss lived 200 years ago. Bhargava was the first to improve upon on what Gauss did. The work was on an area called binary quadratic forms, or squares in simple terms. Gauss gave a method to compose a quadratic form in terms of two other quadratic forms. While Bhargava was reading this work -very few people apparently read it -he was stuck by his incompleteness and thought he could improve it. According to the Fields Medal citation, Bhargava got the idea while playing with a Rubik's cube, one of his favourite toys. He extended Gauss' composition law to higher degree polynomials. “It was an amazing (find) after 200 years,“ says CS Rajan, professor at TIFR. The work was so original that he became an instant star in the mathematical world. He became a professor at Princeton University soon after finishing his PhD. He continued to make fundamental contributions to mathematics, even supporting people with money. For example, he gave good contributions to the Ramanujan Society in India a few years ago. “His financial support helped us in our conferences,“ says Alladi Sitaram, emeritus professor at the Indian Statistical Institute. One of his recent contributions was to an area called elliptic curves, which he made along with an Indian graduate student of his, called Arul Shankar. Shankar is now a post-doctoral fellow at Harvard University. He studied at the Chennai Mathematical Institute, where his father Shiva Sankar is a professor. “Manjul is pleasant and gentle person,“ says Shankar. “People who operate at this level often have huge egos or are abrasive.“ In the end, it is this humility that impresses all those who meet him. In the morning, Murthy wrote to the editors. “He is as unassuming and friendly as he is brilliant. I hope the government of India will award him the Bharat Ratna.“

• In Radical Revamp, Mor may Come to RBI as COO: The Reserve Bank of India board has approved Governor Raghuram Rajan's proposal for a radical overhaul of the institution aimed at shaking up a system seen as staid and rigid, by shrinking organisational bloat and reducing overlaps. It also seeks to establish the post of chief operating officer, an executive who's likely to be made responsible for executing the central bank's reform agenda. “RBI board has approved the broad contours of the restructuring plan, including plan, including the creation of a position of a COO,“ the central bank said in response to a query from ET. The new position may not be ranked at deputy governor level as sought by Rajan, at least for the time being, said two people familiar with the matter. The next rung, or the third-highest rank at the central bank, is that of executive director. Nachiket Mor is regarded as the most likely candidate for the COO's job. Mor is a former executive director of ICICI Bank and also headed the RBI committee on financial inclusion. Rajan wants to trim the 27 different departments at the central bank. He's also said to be keen on making lateral hires from the private sector as is done in the US and UK. The board's approval for his plan is a boost for Rajan, who has already taken steps to transform monetary policy-making by adopting the inflation-targeting framework suggested by his deputy Urjit Patel. This approach is cited as the reason for the two decades of prosperity before the 2008 credit crisis. Although the government has not yet formally approved this, statements from finance minister Arun Jaitley and others indicate that it's broadly in agreement with this strategy. The creation of the new post will be discussed further with the government as it will require legislative changes. “Since that position is intended to be at the DG (deputy governor) level, the position's status will have to be discussed further with the government, and then will require legislative change,“ said RBI. The COO will probably be entrusted with implementing the ambitious reforms that Rajan wants, including pushing financial inclusion, differentiated banks and developing new structures for financial markets, said one of the persons cited above. It will not interfere with the existing structures that administer banks and financial markets, the person said. Rajan spoke highly of Mor in comments to ET when he chose him to head the financial inclusion panel last year. “We could not pick up a better and more capable person who has seen all aspects ¬ the theoretical as well as the practical -to give us a sense of the future of what we should be doing,“ Rajan had said. Rajan's broader plan includes bringing every aspect of the central bank under just five functional departments that will be supervised by the four deputy governors and the COO. Some departments such as the supervision and inspection departments of banks as well as non-banking finance companies could be merged to avoid overlap. Currently, these report to different deputy governors.

• Hero Electric Launches ‘Photon' Scooter at Rs 54,110: Two-wheeler maker Hero Electric on Wednesday launched a new scooter model -Photon -across major metro cities at a price of 54,110 (ex-showroom, Delhi). “We are confident that the new Hero Electric High Speed Photon will further augment our growth in the electric vehicle segment,“ Hero Electric CEO Sohinder Gill said in a statement. The company claimed that the electric scooter received positive feedbacks during test marketing in select markets. The scooter was unveiled earlier this year. This product is the result of strong in-house development and years of research, the company said. The company is targeting various customer segments including working women and senior citizens, it said.

• BCCL Acquires Stake in Omnipresent Retail India: Bennett, Coleman and Company (BCCL) has bought a stake in Omnipresent Retail India, which operates the ecommerce retail portal eDabba.com for an undisclosed amount. The company now has 700 retail outlets, spread across 175 cities and towns, through which it sells about 250 brands under electronics, jewellery, apparels, sunglasses, etc. Omnipresent Retail is planning to increase its presence to 5,000 retail outlets and is aiming a sales turnover of Rs 500 crore over next three years.

• Carlsberg Pours in Rs 200 Crore to Boost India Market Share: Carlsberg is investing Rs 200 crore in India as the world's fourth-largest brewer looks to emerge a big player in the country's increasingly competitive beer market dominated by Heineken-backed United Breweries and SABMiller. While Carlsberg has been very aggressive in terms of innovation and product launches in the country, its market share in India at 8% is the lowest the Danish brewer has in a big market across the world. Carlsberg is keen to change that as part of a wider global growth strategy of focusing on growing markets such as India amid stagnant conditions in its core European business. A Carlsberg India spokesperson said the latest investment is of a normal business nature. Experts said the Indian arm will need its parent's support to stay aggressive as it's not yet generating enough funds. Carlsberg India, still considered a fringe player, posted net sales of 394 crore with a loss of 168 crore in the year ended December 2012. Numbers for 2013 are not yet available. One big reason for Carlsberg not yet generating enough funds in India is its dependence on mass brands and failure to make much ground in the premium space. Unlike most global markets where its top seller is the milder version of the eponymous lager, Carlsberg's Indian unit has been focusing on more strong beer such as Tuborg Strong and Elephant because strong beer accounts for 80% of overall sales volume. “Tuborg, which was launched as a premium brand, had to slash prices to gained initial share. Moving away from its pricier positioning to compete with mass brands has impacted its margins,“ said an analyst at a domestic brokerage house. “There has been a lot of pressure on Carlsberg's Indian business to turn profitable, which isn't easy if just Tuborg does well,“ the person added. And pushing premium beers won't be easy when most of its global rivals, too, look to boost their presence in fast-growing emerging markets such as India. Asia, which accounts for 35% of global beer consumption, is the largest regional beer market. SABMiller, makers of Foster's and strong beer Knock Out, invested around $77 million in the country a year ago to expand its capacity and portfolio.

• Max Ties Up With Spar Again, Plans 20 Stores: Max Hypermarket has signed up once again with Dutch food retailer Spar International and plans to open 20 stores as its licensee in the next five years, a day after ending a franchise deal with French retailer Auchan Group in India. A unit of Dubai-based Landmark Group, Max partnered with Spar International a few years ago but ended the tie-up in 2012 after opening 13 stores, subsequently tying up with Auchan. Max Hypermarket sees retail sales exceeding 300 million by 2019 from its stores that will now be rebranded Spar. “We are pleased to renew and extend our business partnership with Spar International,“ said Viney Singh, managing director, Max Hypermarket. “This new arrangement will ensure that the stores are operated to the highest international standards of quality and food safety and provide customers with an enhanced shopping experience.“ In March, Tesco entered into an agreement with the Tata Group to form a 50:50 joint venture with Trent Hypermarket to become the first -and so far only -overseas supermarket chain to have applied for and received approval to set up retail stores in the country after India allowed overseas companies to own up to 51% of local ventures in 2012, but with restrictions. Global retailers such as Wal-Mart Stores and Metro prefer to operate wholesale cash and carry stores despite foreign direct investment (FDI) being partially allowed in multi-brand retail. “Our previous presence in the market provides a strong foundation to grow the brand in the years ahead and we look forward to working closely with Max Hypermarket to bring quality fresh foods, low price and a convenient shopping environment to con environment to consumers in India,“ said Gordon Camp bell, managing director, Spar International, which is one of the world's largest food retailers with more than 12,000 stores worldwide and retail sales of 32.2 billion in 2013.

• Petrol Prices in City to Go Down by Rs 2.18: Petrol will become cheaper by 2.18 a litre in Delhi and up to 2.38 in some cities on the Independence Day, bringing its pump prices to the lowest in one year, as the fuel slumped in international markets. ET reported on Tuesday that state oil firms would announce the price cut before Independence Day. Oil minister Dharmendra Pradhan on Wednesday tweeted about the change in pump prices “in the range of 1.89-2.38” per litre. Prices vary depending on cities and states because of local levies. This is the second biggest price cut announced since October 1 when companies slashed petrol price by 3.66 a litre in Delhi. And, two consecutive price cuts this month have reduced retail price by 3.27 per litre this month — on August 1, oil companies had cut 1.09 a litre in Delhi.

• No to Retail FDI, but Policy Intact For Now: The government will not entertain any foreign investment proposal in multi-brand retail, commerce & industry Minister Nirmala Sitharaman has said, reiterating the ruling BJP's stance on the sector. Sitharaman, who was responding to a question in Rajya Sabha on Wednesday, said the mandate given to the new government was on the basis of the BJP's manifesto, which clearly said “we do not entertain FDI (foreign direct investment) in multi-brand retail“. BJP has criticised the UPA government-approved multibrand retail policy that allows 51% foreign direct investment (FDI), but has not made any move to roll it back. Only British retailer Tesco has announced a $110-million investment in partnership with the Tata Group's Trent to open front-end stores in Maharashtra and Karnataka. On whether the government would scrap the policy, the minister had told ET last week, “No action yet. Status quo remains. Since no application has come, there is no hurry for us to address the issue. If an application comes, we will take a call“. Separately, in a written reply to a question, Sitaraman said no decision has been taken on the policy. “No decision has been taken with regards the Multi-Brand Retail Trade (MBRT) policy,“ she said.

• I-Day discounts give flyers freedom till end of the year: Independence Day discounts from airline companies seem to have turned into a trend, whose benefits can be reaped till the year-end. Budget carrier AirAsia India became the latest airline on Wednesday to launch an offer giving 20% discount on all seats on all flights booked between Bangalore and Chennai, Kochi, Goa and vice versa. Three domestic airlines and four foreign carriers had earlier come up with special offers for bookings done by August 14 this year too. For SpiceJet and IndiGo, the Independence Day sale is on till Thursday and is valid for travel between September 1 and December 15. GoAir is also offering a discount. For the AirAsia India discount, the booking period is till August 17 for travel from August 12 to December 14. “Travellers can avail of discounted fares by making advance bookings for the peak festival season as fares are likely to rise as we get closer to the dates. We have already seen bookings increase by over 100% since Monday, and anticipate further increase in bookings over the next few days as the promotion gathers momentum,“ said Sharat Dhall, president, yatra.com. Among the foreign carri ers, Qatar Airways is offer ing up to 25% off on economy and premium cabin fares for booking till August 15, valid for travel till December 10, on routes to Europe, the Middle East, Africa and the Americas. Virgin Atlantic has a three-day offer under which flyers booking an upper class or a premium economy ticket need to pay only 68% of their base fare along with taxes. British Airways too has an offer open for booking till August 14, but valid for travel till December 31. American Airlines’ discount offer is for travel to select destinations in the US.

• Peter England to endorse brand without celebrity face: After having film stars as its brand ambassadors, Peter England, the largest menswear brand in the semi-premium category, has decided to keep the celebrity quotient aside for the time being even as the company is eyeing a sizeable expansion. The Madura Garment's brand was endorsed by 'Rang De Basanti' actor Siddharth, who was the brand ambassador since 2010. His contract with the company expired six months ago. The company's Chief Operating Officer Kedar Apshankar said the firm is evaluating the benefits of celebrity-led advertising vis-a-vis non celebrity-based advertising. "We had successful ambassadors in the past. But we are at the interim phase right now and will take stock of the situation," Apshankar told PTI here. Peter England had announced that it will be launching 100 more exclusive stores this fiscal to help fuel the targeted 20 per cent volume growth.

International:

• Mexico awards 83% of oil reserves to state firm Pemex: The Mexican government has granted national oil firm Petroleos Mexicanos (Pemex) the rights to 83% of the country's proven and probable oil reserves, as part of a broad overhaul. But Pemex will only get 21% of possible reserves, less than it had asked for. Those are the areas where oil has not yet been discovered and which will require a greater degree of investment and exploration to fully exploit. Mexico enacted new rules this week to open up the country's energy sector. Private oil companies are now allowed to operate in the country for the first time in 76 years. The next round of bidding will see private oil firms vie for the remaining 79% of possible reserves.

• UK jobless rate nears six-year low: UK unemployment edged closer to a six-year low in the three months to the end of June, official figures have shown. The Office for National Statistics said the unemployment rate fell to 6.4% in the quarter, the lowest since late 2008 and down from 6.5% in May. The number of people unemployed fell by 132,000 to 2.08 million. But average wages excluding bonuses rose by 0.6% in the year to June, the slowest rise since records began in 2001. Including bonuses, wages fell 0.2%, the first fall since 2009.

• Macy's cuts sales forecasts to recover previous losses: US department store chain Macy's has cut its full-year sales forecasts to make up for first-quarter losses, when bad weather kept shoppers away. Macy's cut its same-store sales forecast to a range of 1.5% to 2% for the full year, from a previous forecast of 2.5% to 3%. Shares in the company, which also owns Bloomingdale's, were down 4% at $56.77 in early New York trading. Separately, the US Commerce Department said July retail sales were unchanged. Consumer spending accounts for 70% of economic activity in the United States. With the figures showing a hesitancy to spend, the US economy could be hurt as a result. While spending dipped at US department stores and car dealerships, losses were offset by gains at grocery stores, petrol stations, restaurants, clothing shops and building material stores. Macy's earnings for the quarter failed to meet analysts' estimates. The store's net income rose to $292m (£175m), or 80 cents per share, from $281m (£163m), or 72 cents per share, a year earlier. Macy's chairman and chief executive officer Terry J Lundgren said: "We are approaching the second half of 2014 with confident optimism... tempered with the reality that many customers still are not feeling comfortable about spending more in an uncertain economic environment." Despite US employers adding more than 200,000 jobs a month for the past six months, wages have failed to rise above inflation, which has hit spending. Retail sales have increased 3.7% over the past 12 months, but economists doubt that spending can grow much faster if incomes do not increase.

• Hong Kong's Cathay Pacific sees big profit jump: Hong Kong airline Cathay Pacific has reported a jump in first half earnings as a new strategy involving more flights to US destinations paid off. For the six months to June, net profit rose to 347m Hong Kong dollars ($45m; £27m). That is nearly 15 times more than the 24m Hong Kong dollars the airline earned in the same period last year. However Cathay's chairman warned that the environment for both the group and the industry "remains challenging". In a filing to the Hong Kong Stock Exchange, Chairman John Slosar said: "We face significant competition in our passenger business. This makes it difficult to maintain yields. The air cargo business remains problematic because of excess capacity. Intense competition similarly puts pressure on yield." To stave off intense competition in the region, and compete for travellers, Cathay had embarked on various discount campaigns, which led to strong travel demand from Hong Kong.

• Activewear, Technical Fabrics Seen as Key Trends in Las Vegas: What’s next? That’s the burning question for retailers who are headed to the Las Vegas trade shows this weekend in search of the latest big idea to spark consumer interest. Although the revolution in fit is still driving sales for many stores, the momentum has slowed from its peak a few years ago. And while there are still some men who need to modernize their wardrobes to slimmer silhouettes in suits and dress shirts, men’s retailers and manufacturers are looking for the next opportunity. For some, it’s fabric and technology that will fit the bill. European designers — often the originators of trends in the men’s wear industry — have begun to integrate innovative fabrics into their collections to strong response. For others, it’s bringing the fit revolution into other categories, or it’s accessories such as jewelry, leather goods and footwear that will lead to enhanced business.  Perhaps the most promising sales generator is the whole activewear trend, a category that has been on fire for most of the year. According to The NPD Group Inc., the men’s activewear market grew 7 percent in the 12 months ended June 30, while men’s suit sales dipped 6 percent in the same period.  “Everything related to activewear is what’s driving customer interest right now,” said Durand Guion, vice president and men’s fashion director for Macy’s Inc. The trend is taking hold for fall and is expected to continue into spring and beyond, he said. This includes everything from traditional activewear to “fashion active,” which Guion defined as the “hybrid of active and street coming together.” Performance fabrics are showing up in everything from dress shirts to polo shirts, he said, as innovations in golf and other sports categories expand into all classifications of men’s wear. This includes everything from the track jacket and the jogger pant to furnishings that don’t wrinkle or retain odors. Guion said men are “responding to performance fabrics in polos and T-shirts and now expect the same technology in dress shirts.” Wicking, moisture management and antimicrobial features all “make more sense than ever,” he believes. The same holds true for fit. Guion said that today’s guy finally “understands it,” and has moved beyond merely looking for replacement clothing to embracing the slim silhouette in all areas of his wardrobe. “He’s comfortable with the slimmer fit now and that continues to be an important message in all categories,” Guion said. In terms of color, Guion is expecting “capsules of neutrals” to take hold for early spring. “Bright colors are a hard sell when it’s 30 to 40 degrees outside,” he said. So grays and browns that coordinate back to that men’s wear’s staple — black — will be popular early on with “paler and dustier” colors making an appearance as the season goes on, he said. Patty Leto, senior vice president of merchandising for the Doneger Group, is also seeing the influence of activewear throughout the market. “Activewear has been so strong for the past two years, and I don’t see that slowing down,” she said. “But what is driving the business is newness in fabrics and the benefits they provide, and that’s spilling over into the sportswear world. The lines are blurring and the rules are no longer defined. It used to be that he wore a suit and a tie, but now he can wear a blazer with a jogger and still look respectable. It’s driven by the younger guy, but the older guy is getting it, too.” She said comfort, performance, stretch and technical features are the four big talking points for retailers these days. “He likes activewear, it performs for him, and even though I don’t like the word, I see the whole ath-leisure thing going forward into spring.” Related to this trend is the “reemergence of the street influence in the contemporary market,” Leto continued. “It’s knit and comfort and newness-driven.” She said the jogger pant is “on fire across the country,” and a real opportunity for stores. “It’s something new that he doesn’t own.”

• American Apparel Appoints Laura A. Lee to Board: American Apparel Inc. has another board member, Laura A. Lee. Lee is currently the head of East Coast content partnerships for Google/YouTube, where she oversees more than 150 television, film, new media and original entertainment partnerships. Before joining Google, she was a vice president and head of business development and operations for MTV. Colleen Brown, nominating and governance board chair, said, “Laura brings a deep understanding of the Internet space and digital launch initiatives, combined with a strong background in major brand building and key partnership development, to the American Apparel board.” Brown was named to the board last month, and has the distinction of being the first woman to serve on the retailer’s board. Now there are two women on the company’s board. Three others were also named to the board last month: David Glazek; Thomas J. Sullivan and Joseph Magnacca. All of the new appointees join existing board members Allan Mayer and David Danziger, who serve as cochairmen. The reconstituted seven-member board was part of an agreement inked by American Apparel and Standard General last month, when the hedge fund agreed to give the retailer up to $25 million in funding. That agreement also gave founder Dov Charney the temporary title of strategic consultant.

• Target CEO Brian Cornell Discusses Personalization: Brian Cornell, Target Corp.’s new chief executive officer, on Wednesday held a town hall event at the retailer’s Minneapolis headquarters, his first meeting with company employees. Showing that he’s a leader for the future, Cornell and Target used Twitter as the platform of choice to communicate his message. “All of us need to be students of the consumer,” Cornell was quoted as saying on Target’s Twitter account. “We need to be quick, we need to be decisive, we need to be agile.” He went on, “We need to move forward with speed. To me, leadership is about surrounding yourself with a great team.” Touching on a popular theme in retailing, Cornell said, “The days of mass communication and mass marketing are behind us. Today is about personalization.” Cornell shared that his son was the first person who encouraged him to apply for the role of Target ceo. “Why Target? I believe Target is an extraordinary brand,” he said. “I believe the Target brand is best positioned to win in the omnichannel environment. “Where would I like to see us over the year? I’d love to see a headline: Target is building momentum,” Cornell said. “In the next couple of months, it’s about listening & learning through the eyes of our team.”  Cornell said “style innovation is critically important and the core DNA of this company.” In terms of merchandise, “The guest’s vote is the most important in the room. It’s important to win the right way, with high ethical standards and in a way that fosters inclusion.” Cornell didn’t deny that Target has a long road ahead. “We have work to do,” he said. “I’m going to ask questions and will be searching for opportunities to drive growth.

Tech:

• Microsoft Launches ‘Most Affordable' Lumia Phone: Microsoft Devices on Wednesday announced the launch of “most affordable“ Lumia 530 dual SIM smartphone for Rs 7,349 in India. Microsoft Devices said Lumia 530 will be Rs 7,349 available in stores at a best buy price of ` starting August 14. The new Lumia 530 will provide a powerful entry to Windows Phone 8.1 with a Quad Core processor. This device will expand the reach of Windows Phone as it allows more people to enjoy Lumia innovations and Microsoft services similar to those offered in high-end Lumia smartphones, the release added. “The affordable smartphone segment is growing exponentially, driven primarily by youth who are constantly looking out for smartphones with power-packed features at affordable prices,“ Viral Oza, Director-Marketing, Nokia India, said.

• Paytm in Talks with PEs to Raise $350 M: M-commerce company in talks with Asian private equity players, deal likely to be finalised by year-end; funds to be used for tech upgrade. Mobile commerce player Paytm has started talks with Asian private equity firms to raise about $350 million, most of which will be used for technology improvement and logistics expansion, with a deal expected to be sealed by the end of this year. “We have initiated talks with private equity players, serious investors based in Asia,“ Vijay Shekhar Sharma, Chairman and Managing Director of Paytm owner One97 Communications, told ET without divulging any names. Sharma did not say how much equity would be offered to investors but added that he was open to increasing the fund size depending on interest. Paytm offers mobile wallets that allow consumers to use mobile phones and other handheld devices to pay for purchases. One97's wallet is a semi-closed, or prepaid, instrument and it allows users to pay for postpaid mobile, data-card and utility bills. The m-commerce company recently ventured into the marketplace model for companies selling apparel for men and women, electronics and home furnishing. It allows online buyers to chat with the sellers and get bargains on deals on products through the mobile phone, Sharma said. Paytm is the latest among e-commerce players to have either raised money or are looking to do so amid a massive surge in India's online retail industry. Bangalore-based Flipkart recently raised $1 billion, taking its valuation to $7 billion while eBay-backed Snapdeal raised over $233 million this year. Global e-commerce giant Amazon announced a $2 billion investment in its India business to take on rivals, indicating the interest and potential of the space. Delhi-based Paytm plans to use the funds to build mobile operations and a platform for aggregating courier companies to ensure deliveries to all 36,000 pin code zones in India. Sharma said that at present only 5,000-7,000 pin code areas in the country are covered by e commerce retailers. The company aims to cater to a far larger geography, with same-day delivery in metros and top cities. It also wants to have a larger catalogue for users to choose from, which will entail increasing the products and product categories offered and the number of merchants to 1 million.

• Amazon.in to Launch Gift Card Store: Online marketplace Amazon.in is launching a gift card store that will feature over 70 brands, continuing with its strategy of adding at least two new product categories every month. Gift vouchers of brands like Pantaloons, Shoppers Stop, Lifestyle, Lakme Salon, Nike, Domino's Pizza and Café Coffee Day will be part of this new store that comes within weeks of the site starting its own electronic gift cards. “We want Amazon.in to be the single destination for all the gifting needs of customers,“ said Srinivas Rao, general manager of payments at Amazon India. The company is also set to target corporate clients who will have the option to buy Amazon gift cards in bulk on the store or integrate it with internal rewards and recognition. The corporate cards will be launched in the next couple of weeks. The gift card market in India is a lucrative one--estimated to grow from the current Rs 2,500 crore to about Rs 9,000 crore in three year. Amazon has partnered with Bangalore-based gift card technology startup QwikCilver Solutions which powers the gift card business of retailers like Shoppers Stop, Lifestyle, Westside, Titan, Croma and others. Rival Flipkart allows customers to buy electronic vouchers that can be redeemed against products sold by its arm WS Retail.

• New Ezetap Features to Make Banking Easier: Bangalore-based Ezetap, which makes it possible for merchants to accept payments on credit and debit cards on its handheld device, has packed in a bunch of new features to extend its utility. Opening a bank account through Aadhaar, checking one’s bank balance, or transferring cash are a few of the things that the device can now offer to consumers. “This could allow even merchants to become business correspondents for banks, by helping people open accounts, support tasks like cashin, and cash-out,” said Abhijit Bose, chief executive officer of Ezetap. The device, which is used by banks like SBI, HDFC and Citibank, could also do facilitate peripheral things one would do at an ATM – check balance, transfer money, get a mini-statement etc. “We are confident that such solutions will be a key component of the future of Inclusive Banking in India,” said AP Hota, CEO of National Payments Corporation of India.

• New rivalry: It's Amazon Murthy vs Flipkart Premji: India's tech titans and fierce cross-town rivals, Wipro's Azim Premji and Infosys' N R Narayana Murthy, are squaring off in the burgeoning $3-billion ecommerce market space too. Premji has gone with the domestic players; he has investments in Myntra (recently acquired by Flipkart) and Snapdeal while Murthy has placed his bets on global e-tailing giant Amazon. Earlier this year, the Wipro chairman, through Premji Invest, and a clutch of other investors, pumped in about $50 million in fashion e-tailer Myntra. Snapdeal got $100 million in funding from five investors, including Premji Invest. More recently, Amazon and Murthy's family office, Catamaran Ventures, floated a JV to help small and medium businesses join the online bandwagon. Catamaran holds a majority 51% in the JV , Taurus Business and Trade Services. “Myntra and Snapdeal needed money and expertise from successful Indian entrepreneurs. From an investment perspective, Premji's investments are a more classic VC style investment that fosters local entrepreneurship with a very high risk reward ratio,“ said Praveen Chakravarty , a successful angel investor and co-founder of Mumbai Angels. However, he has a counter view on the Amazon transaction. “It seems to me as a low-risk, financial return focused yield investment that has risen out of an opportunity driven by regulations in India.“ Sources privy to developments in Amazon told TOI that the US e-tailing behemoth was scouting for a big brand that could invest Rs 100 crore in cash with a guaranteed return on investment of around 20% at the time of exit. TOI could not ascertain the nature of the Amazon Catamaran tie-up, as both parties have not disclosed financials of deal. “Amazon doesn't need money nor does it need hand-holding and guidance,“ said a senior executive of a Bangalore-based VC fund-house, who requested anonymity. Deepak Srinath, director--digital practice at Bangalore based Allegro Capital Advisors, said comparisons between Premji and Murthy's venture is not like-to-like. “Having said that, it's easier to be a financial investor. But in the case of Catamaran, they are setting up full-scale operations and would be managing business operations. It's not easy to stick your neck out in this fashion which is a high-risk game in itself.“ Aashish Bhinde of Avendus Capital said both Murthy and Premji have carved their own paths to align with players in the country's e-commerce play. When asked if Murthy's embraced a safe game plan with assured returns, while Premji's is a higher risk affair, Bhinde said he doesn't agree with those characterizations. “I believe they both are bullish about the sector but have different investment strategies. While one is taking a portfolio investment approach, the other has made a more strategic move,“ he added.

• Microsoft loses $400 million on Xbox One: Tech giant Microsoft has recently reported a $400 million loss on its Xbox One gaming console since the time it was launched. The recent report shows that Microsoft spent $400 million more than it earned from the console. While Xbox console sales increased from 9.8 million units in 2013 to 11.7 million units in 2014, manufacturing and distributing costs went up to $2.1 billion while platform revenue only reached $1.7 billion, AdWeek reported. Microsoft is spending more and more money on Xbox One to make it a device as a way to use multiple Microsoft products and services simultaneously. However, Xbox strategy head Yusuf Mehdi acknowledged that a number of non-gaming features were removed from the Xbox One, such as app streaming and digital game purchasing, in response to user feedback, report said. To win over gamers who only want to play games, Microsoft also removed its bundled motion capture device Kinect in May so it could lower the price of Xbox One to match market leader Sony PlayStation 4.

• Time for America's PC e-retailer Newegg.com to set up shop in India: Well, well, well, look who decided to show up in India and it's about time. After Amazon another big dealer, this time in the PC business, steps on to the Indian Turf. Newegg.com has been a very big name when it comes to PC hardware and peripherals in USA. Now the company has finally set shop in India and will sell the goods to Indian customers from the online platform. After Singapore, Ireland and New Zealand, India is the next big destination for them. To start with, the Indian customers will get limited number of product verticals, but soon will be expanded and users can buy more. The prices of most the products have been kept competitive, however the shipping price might be high in some cases. Newegg will go up against Flipkart, Amazon and Snapdeal, who already have a firm hold in this sector. Newegg will also face tough competition from the offline retailers situated in places like Nehru Place (Delhi) and Lamington Road (Mumbai). These offline stores give products at rock bottom prices, which the online stores cannot beat. This could be one of the challenge Newegg faces here. However, times are changing and people do not mind spending the extra buck for convenience of home delivery. Things in the PC market just heated up, consumers should gear up for some great deals and discounts from these E-retailers.

• Candy Crush Maker King Digital Announces $150 Million One-Time Dividend: King Digital, which makes the popular Candy Crush mobile game, was down more than 25% in afterhours trade on Tuesday after announcing a surprising $150 million special dividend. King Digital's net income in the second quarter totaled $161.7 million, and the company reported $832.2 million of cash and cash equivalents at the end of the quarter. So it isn't like the company doesn't have the funds to pay out a dividend, which is worth $0.469 per share outstanding and is payable on September 30, but a large payout from a company that recently went public is a surprising move. And investors, at least in immediate reaction, have not taken kindly to the announcement. King Digital also said that, "In addition, the Company's executive officers, directors, founders, and affiliated funds, including Bellaria Holding S.a.r.l of whom Apax WW Nominees Ltd is the sole shareholder, together representing 80% of outstanding shares, have agreed to a new lock up with the Company through the date following the Company's announcement of fourth quarter and full year 2014 earnings." In the second quarter, the company earned $0.59 per share, which was in-line with analyst expectations. Bookings were also better than expected, coming in at $611 million against expectations for $606 million. King said bookings would slow in the third quarter, with the company expecting bookings of $500 million to $525 million, with full-year bookings of $2.25 billion to $2.35 billion. With a decline of more than 23%, King Digital has had more than $1 billion taken off its total market capitalization in just a few minutes after this report. King Digital's time as a public company hasn't gone the smoothest, with the stock just once closing above its initial offering price of $22.50.

• Amazon credit-card reader poses challenge to Square: Amazon has released a smartphone and tablet add-on that can be used to swipe debit and credit cards to allow payments. The Local Register device is targeted at small businesses as an alternative to a cash-register system. The US firm plans to take a 2.5% cut of swiped transactions from next year, but is offering a discounted rate of 1.75% in the meantime. Both charges undercut Square and PayPal, which offer similar gadgets. Square Register charges 2.75% per swipe, while the PayPal Here service charges 2.7%. All of the firms must deduct interchange and assessment fees imposed by the credit-card companies and banks involved, which account for the bulk of the cost passed on to the device owners.

• Alibaba Bonus Scheme Strengthens Jack Ma's Control: Jack Ma, founder and executive chairman of Alibaba Group Holding, holds deep sway over executive and board appointments at China's biggest e-commerce company, and that influence is set to strengthen further at the firm, which is heading towards a New York IPO that is expected to raise more than $15 billion later this year. In Alibaba's latest filings with the U.S. Securities and Exchange Commission (SEC), it said Ma this year initiated a bonus program that allowed senior executives and Alibaba staff to acquire share rights at an affiliated company he controls. Alibaba on Tuesday underscored the potential conflict of interest from Ma's role as Alibaba's executive chairman and as the controlling shareholder at the company which holds Alibaba's affiliated Alipay payment business - even as the company said it was forging a closer relationship with the unit. "If conflicts arise," Alibaba said in an amended SEC filing, "such conflicts may not be resolved in our favor." Companies routinely amend their filings ahead of an IPO. In Tuesday's filing, Alibaba expanded its "risk factors" comments, but it was not clear whether this reflected any concerns raised by the SEC or potential investors. Alibaba's CEO Jonathan Lu, chief people officer Lucy Peng, and chief risk officer Shao Xiaofeng, are among 20 senior executives who have benefited from the bonus program, taking share rights which provide the holder with the economic benefits of the stock, company registration documents show. All 20, along with Ma, are members of the Alibaba Partnership, the 27-member group which will have the exclusive right to nominate a majority of Alibaba's board of directors, documents show. A bonus scheme granting employees at a listed company shares in an unlisted affiliate doesn't raise any legal concerns, but it is unusual for a firm to allow an executive to independently determine compensation, corporate governance experts say.

• Instagram Hires New Ad Chief: Instagram is ready to make some money. Facebook Regional Director James Quarles has been tapped as Instagram’s new Global Head of Business and Brand Development, according to a Facebook spokesperson. Quarles will oversee Instagram’s revenue strategy, including its advertising and sales efforts. He will report directly to Instagram cofounder Kevin Systrom, and will manage both the marketing and sales teams. The position is a new one for Instagram, a sign that the company is most likely pushing forward with additional plans to generate revenue. It may also add more structure to the company’s existing ad efforts, which had been divvied up among a handful of Instagram employees, including Jim Squires, director of market operations, and Matt Jacobson, head of market development. Instagram already offers advertisements in user feeds, but works carefully with brands to ensure ads don’t feel out of place on the platform. Instagram enforces a number of ad rules to protect the quality of its feed, including no text overlays on ad images and no repurposed images, according to Business Insider. It’s a system that keeps ads from sticking out like a sore thumb, but isn’t necessarily scalable. Quarles will also work to develop new “monetization products,” according to a spokesperson, but it’s unclear what those might look like. Quarles has a long history working with brands and advertisers. Before taking the job at Instagram, he spent three years in Facebook’s London office managing some of the company’s largest brand accounts and partnerships. He also spent more than six years as a marketing director with Dell before joining Facebook in 2011. He’ll take up his new post with Instagram this fall.