Daily News Digest- 21st Aug'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Centre, States Iron Out More GST Glitches: India's ambitious plans to reform the indirect tax regime through a goods and services tax (GST) took a few significant steps forward with the Centre and states agreeing on the details of its structure. GST seeks to replace a multitude of indirect taxes with one, removing barriers to movement of goods and services across state boundaries and turning the country into a single market. This would improve efficiency, reduce delays and bump up the GDP by 1-2%. The tax, which was to have been rolled out from FY11, is stuck because the Centre has not been able to convince states that they'll be adequately compensated for revenue they lose as levies imposed are scrapped. On Wednesday, the empowered committee of state finance ministers decided the threshold for the levy of the tax. “It was decided that Rs10 lakh in respect of general category of states and Rs 5 lakh for special category and northeastern states,“ Jammu and Kashmir finance minister Abdul Rahim Rather, who heads the empowered committee on GST, told reporters after a meeting of the panel on Wednesday. This means GST will be levied on all retailers and service providers with a turnover of more than Rs 10 lakh in general category states and Rs 5 lakh in special category states. This removes a key stumbling block in the finalisation of the GST structure and is expected to speed up the talks on implementation of the tax reform, though significant differences still persist. GST will replace service tax, excise, state value-added tax and a number of other local levies. The new government has already signaled its intent to take GST forward and has said it will address all concerns of the states. “Overall, the seriousness around GST has gone up significantly and we seem to be moving fast towards its implementation,“ said Pratik Jain, partner at consultancy KPMG. “Agreement on threshold of Rs 10 lakh is certainly a positive step as this issue was being debated for a long time.“ The levy will have two components -central GST and state GST. There are differences between the Centre and states over control of central GST. States want to have legal control of central GST up to a limit of Rs 1.5 crore. But the Centre is only willing to give up administrative control. Above the Rs 1.5-crore limit, dual control is prescribed, on which there are no differences. “The discussions on letting the state governments take administrative responsibility for those having turnover up to Rs 1.5 crore would provide relief to millions of small businesses that were concerned about having to deal with multiple authorities under GST,“ Jain said. Both sides are expected to finalise these issues soon. A panel appointed by the empowered committee with representation from the Centre and states has been tasked to iron out these issues.

• Indians Go for Premium Buys Despite Consumer Slowdown: Indians increasingly prefer premium variants of consumer products despite a slowdown in overall consumer spending, and marketers now roll out as many premium products as economy ones to cash in on the trend, says a new study. Higher-priced and value-added variants of a slew of products including shampoo, hair oil, soap, fairness cream, shaving preparations, toothpaste, tea and bar soap grew faster than economy variants in the year ended May , and 48% of all new launches in FMCG space were premium products, according to findings by researcher IMRB and Kantar Worldpanel. “The premium landscape is evolving and redefining the consumer profile,“ Josep Montserrat, global CEO of Kantar Worldpanel, said. “Triggers for this include higher monthly expenditure, increasing working population and increased access to modern trade and e-commerce, all of which is translating into more value-conscious demand,“ he told ET. Marketers say penetration of value-added products is on the rise, triggering launch of premium products that offer better margins to companies. “There is already a plethora of brands at the entry-level, while premium products are creating a newness in the market triggering more launches,“ said Chitranjan Dar, ITC's divisional chief executive for food business. He said the firm's recent foray into healthy biscuits under Sunfeast Farmlite brand has picked up well. Mayank Shah, group product manager at Parle Products, said: “While factors like monsoon-linked slowdown in consumption is cyclic, long-term trends indicate that we are moving up the value chain. Consumers are looking to gratify themselves with value-added premium products while companies get better profit margins.“ Parle Products recently launched premium Milano centre-filled dark cookies. According to the IMRB report, consump tion of body lotion and face wash rose 8% and 14%, respectively, in the year ended May. Demand for premium cream biscuits and bar soaps have increased in small towns where consumers' household aspirational purchases rise once their basic needs are met. The report said small towns are seeing the fastest increase in households shopping from modern trade.

• Hotels Warm Up to Franchise Model: Two months ago, the management of the Tata Group's budget hotel brand Ginger set up a special six-member task force. It's been entrusted with plotting Ginger's rapid growth through franchising, something the brand hasn't attempted before. “So far Ginger has grown through greenfield developments, but now we are studying the different facets of the franchise model to scale up our presence,“ said PK Mohankumar, MD and chief, Roots Corporation, the Tata-run Taj hotel group subsidiary that manages Ginger Hotels. Executives at Indian and international hotel chains are warming up to the franchise concept as it's turning out to be a viable growth model for hotel brands and asset owners. It's also less prone to the risk of going awry than management contracts, although the latter generate more revenue. Ginger plans 80 hotels by 2016-17, up from the current 30, and the bulk of these will be franchises. Franchises account for a third of the 15 properties in the portfolio of mid-market chain Keys Hotels. “It helps in ramping up business and to scale brand visibility more quickly,“ said Sanjay Sethi, managing director and CEO of Berggruen Hotels, which owns the Keys Hotels brand. Global chain Hilton Worldwide opened the Double Tree by Hilton in Pune under a franchise agreement with city-based Panchshil Realty. “We would consider franchising in instances where the owning company of a hotel has strong credentials in managing a hotel to the highest standards,“ said Rajesh Punjabi, vice president, development, India, Hilton Worldwide. In the last few years, there have been several cases of owner-brand ties turning sour under management contracts. The franchise model bridges the gap between the owner's cost concerns and the hotel brand's expansion ambitions. “There is lesser friction because if you are not managing the hotel then the owner cannot do the finger pointing,“ said Dilip Puri, India managing director of Starwood Asia Pacific Hotels and Resorts, which recently converted two of its existing five-star hotels in the south that were under management contracts into franchises.But brands also need to ensure that standards are maintained. “Some owners develop the capability of managing the hotel well and it is in these cases we consider changing from a management contract to a franchise,“ Puri said. Under the franchise model, the hotel company gets a fixed fee for licensing its brand while the owner operates and manages the hotel. “It helps in reducing the operations cost structure and puts the onus of performance on the asset owner without sacrificing fees for the hotel brand company,“ said Priyakant Amin, director, Convention Hotels India (CHI), which owns and builds hotels. Typically, a management contract entails a hotel brand getting a fixed percentage of the revenue and operating profits whereas a franchise involves only the brand licensing fee. “The brand takes up almost 1012% of the top line in terms of all the charges in a management contract, whereas under a franchise we can save almost 5% of that cost on the top line,“ said a Bangalore-based hotel owner who has plans of converting his upscale hotel into a franchise property. However, the revenue earned by a hotel brand under this model is only around 40% of what it gets in a management contract. “There is lack of control on the asset quality and quality of service within the hotel as the brand works at an arm's length from running the hotel,“ said Sethi of Keys Hotels.

• Dreamliners in trouble, again: It was a terrible Tuesday for Air India with three aircraft -including two Dreamliners -suffering from different snags. While a Dreamliner had to be grounded in Dubai, an Airbus A-320 cracked its windshield when it was enroute from Goa to Chennai. The A-320 managed to land safely in Chennai but will now be grounded till the windshield is replaced. The first trouble erupted in the early hours of Tuesday when a Dreamliner was to fly back from Dubai to Delhi with 239 passengers. The aircraft had trouble with its spoilers -a recurring feature with the Boeing 787 in AI fleet. This device acts as a speed breaker on an aircraft and its actuators make it go up or down on wing tips during takeoff to alter drag and during landing to increase rate of descent. Without this important device perfectly functional, an airplane can't be allowed to get airborne and had to be grounded. AI made alternate arrangements to fly its guests to Delhi. The second trouble broke out on Tuesday morning when another Dreamliner was taxiing out from Delhi to fly to Bangalore with 136 passengers on board. “This aircraft had a technical issue and had to return to the terminal. The flight to Bangalore then took off after two hours,“ said an official. The third issue was possibly the most serious. An A-320 flying from Goa to Chennai (AI 976) cracked its windshield enroute. “The aircraft landed safely in Chennai. A windshield has several layers and the crack observed Tuesday was on one or two of the layers. It did not shatter and was safely intact for the flight and landing. The windshield will now be replaced at the earliest so that the aircraft can fly again,“ said an official.

• SpiceJet beats IndiGo in flight occupancy: SpiceJet Ltd beat bigger rival InterGlobe Aviation Pvt. Ltd-run IndiGo in flight occupancy in July even as analysts warned of overcapacity in the airline market. SpiceJet had the highest flight occupancy of 79.4% in July among Indian airlines while IndiGo’s occupancy fell to 67%, according to data released by the Directorate General of Civil Aviation (DGCA) on Wednesday. Other airlines also flew their planes at least 30% empty in a month that is considered lean for airlines as schools reopen after summer vacations. Air India Ltd’s occupancy rate was at 69.6%, Jet Airways (India) Ltd’s was at 64.2%, GoAir at 69.7%, Air Costa at 65.5% and AirAsia India at 69.8%, according to the data. “IndiGo has seen a sharp decline in loads and at a load factor of 67%, it is the lowest in the year so far. The largest carrier in India and biggest low-cost carrier is last in terms of LF (load factor) amongst GoAir, SpiceJet, AirAsia and itself,” said Ameya Joshi, an aviation analyst. “With capacity expansion on fast track, it looks like the industry is going into an overcapacity mode in the days to come, with multiple flights being launched. This will put pressure on yields and loads.”

• Press Play raises $500,000 from angel investors: Press Play Pvt. Ltd, a Delhi-based travel entertainment start-up on Wednesday said it has raised $500,000 from a group of angel investors. The company, which was launched last year with a seed capital of $1 million, is also in talks to raise a Series A round of funding by the end of this month, Anand Sinha, co-founder of the company, said over the phone. The company provides tablets to passengers who travel long journeys in buses for a cost of Rs100. The tablets can be attached to the seats and are pre-loaded with movies and music. “We have already provided our service to 25,000 customers across eight cities and are looking to launch in four more cities in the next 40 days,” said Sinha. The company has tied up with the state transport corporations of Himachal Pradesh and Rajasthan and a taxi rental company to provide its services. The start-up has also partnered with games studios and movie production houses for content. It is looking at growing its current employee base of 80 to 300 and increasing its presence to 50 cities by the end of this fiscal year. “Having worked with Zomato, we have experience in overseas expansion. We are looking to expand to international destinations by the end of 2015,” said Sinha.

International:

• Samsung buys US air conditioner firm Quietside in "smart home" push: Samsung Electronics Co Ltd said on Tuesday it had acquired U.S. air conditioner distributor Quietside LLC as part of its push to strengthen its "smart home" business. It is the South Korean firm's second such acquisition within a week after it said on Friday it had purchased SmartThings, a U.S.-based platform developer which builds apps that allow users to monitor, control and automate devices at home. So-called "smart homes" enable users to control multiple household appliances from a mobile device and are an area of increasing focus for technology companies like Samsung Electronics, the world's biggest maker of smartphones. A Samsung Electronics spokesman said the South Korean company acquired 100 per cent of Quietside, but declined to elaborate on the price or other details. "Because air conditioning products are a necessity in all buildings, including homes and offices, this acquisition is expected to be of help to our future smart home business," Samsung Electronics said in a statement. Samsung Electronics aims to become the world's top home appliances maker by 2015, ahead of Whirlpool Corp. Quietside, which has around 500 stores in the United States, sells air conditioners for homes and offices.

• Another big American retail brand reaches a settlement in a racial profiling case: After a high-profile investigation that lasted 18 months, Macy’s today agreed to pay $650,000 to settle a racial profiling case and will hire an independent monitor to address complaints from minority shoppers. The New York state attorney general’s office opened the investigation in February 2013, after receiving reports from customers who said they faced heightened surveillance from clerks and security officers at the Macy’s flagship department store at Herald Square in Manhattan. Some of the shoppers were wrongfully detained. The issue attracted public attention when it was discovered that one of the shoppers alleging unfair treatment was Robert Brown, an American actor known for his work on the HBO series Treme. State attorney general Eric Schneiderman said in a press statement that an inquiry found that Macy’s had “detained African-Americans, Hispanics and other minorities for allegedly shoplifting at significantly higher rates relative to whites.” He continued: “It is absolutely unacceptable—and it’s illegal—for anyone in New York to be treated like a criminal simply because of the color of their skin.” Macy’s has not responded to requests for a comment.

• Russia watchdog shuts four McDonald's in Moscow: Russia's main consumer watchdog has temporarily shut four McDonald's restaurants in Moscow as part of an investigation into food standards. Watchdog Rospotrebnadzor claimed the restaurants had breached "numerous" sanitary laws. McDonald's said it was looking at the complaints, adding its "top priority is to provide safe and quality products". The closures come amid rising tensions between Russia and the West over the crisis in the Ukraine. Previously when diplomatic tensions are high, the regulator has controversially banned products including wine from Georgia, cheese from Ukraine and apples from Poland, according to BBC Moscow correspondent Daniel Sandford. Earlier this month, Russia imposed a "full embargo" on food imports from the EU, US and some other Western countries, in response to sanctions over Ukraine. Wednesday's action by the regulator is part of an ongoing investigation into McDonald's food standards in Russia. In July the watchdog filed a lawsuit in Moscow urging the restaurant chain to withdraw certain products. McDonald's said that restaurants on Pushkin Square, Manezh Square and Prospect Mira in Moscow had been temporarily closed, and said it wanted to "re-open the restaurants as soon as possible". "We will continue taking care of our employees and will do our best to continue the success of McDonald's business in Russia," the firm added.

• Taxi firm Uber starts same-day grocery delivery service in US: Taxi and private car hire service Uber has launched a grocery delivery service in the US. The Corner Store facility is available as an option via its main smartphone app and covers more than 100 items. The products are competitively priced against high street stores, and there is no delivery fee. The service is an "experiment" limited to Washington DC at this time, but it makes them the latest in a series of tech firms to move into the sector. Amazon operates AmazonFresh, a same-day "fresh produce and grocery" delivery service, in California and Seattle. Google offers Shopping Express, a fast-delivery service from Whole Foods, Costco and other stores, that was launched in San Francisco and is now being expanded to New York and Los Angeles. And Instacart charges a fee to send "personal shoppers" to pick up and deliver a wide range of goods from selected stores promising a one or two hour turnaround. It operates in several US cities including Connecticut, Atlanta, New York and Philadelphia. One retail analyst suggested that Uber might hope to benefit from giving its drivers - who work on a freelance basis - jobs to do during quiet times of the day. However, he questioned whether the business model stacked up.

• American Eagle, Arden Push Fashion Stocks Higher: A relief rally from American Eagle Outfitters Inc. and a rebound at Elizabeth Arden Inc. led the WWD Global Stock Tracker up 0.2 percent to 99.91 today. American Eagle’s stock jumped 12 percent to $12.98 after the company reported a 70.3 percent drop in second-quarter profits, which were still not as bad as projected. And Elizabeth Arden Inc. regained 11.1 percent to $16.72 after the stock fell 23 percent Tuesday following an investment from Rhône Group LLC that could dilute other shareholders.  Markets were generally up in the U.S., with the Dow Jones Industrial Average gaining 0.3 percent to 16,979.13 in New York, but down in Europe, where London’s FTSE 100 fell 0.4 percent to 6,755.48. The weakest stock in the 100-issue fashion tracker was Luxottica Group SpA, which slipped 3.8 percent to 39.07 euros, or $52.04. There were numerous newspaper reports that Andrea Guerra, chief executive, is close to leaving the eyewear group after differences of opinion with founder and chairman Leonardo Del Vecchio. Luxottica issued a statement saying, “The group is not commenting on today’s media speculation. At present no board meeting has been called. We can confirm that for some time the Chairman Leonardo Del Vecchio and the cel Andrea Guerra have been debating the best strategic direction for the group.”

• Billabong Sells Surfstich and Swell Stakes: Billabong International Ltd. said Thursday it has agreed to sell its 51 percent stake in Australian surfwear e-commerce player SurfStitch and 100 percent of the California-based surf site Swell to a consortium of investors including SurfStitch founders Justin Cameron and Lex Pedersen, for 35 million Australian dollars, or $33 million at current exchange. Conditions apply, including the completion of the funding process being undertaken by the SurfStitch consortium, with this condition to be satisfied by the close of business on Monday. Completion is expected to occur in mid-September. In late July, as confirmed by sources close to Cameron and Pedersen, the duo met with a dozen fund managers at their Gold Coast headquarters to discuss the proposed buyback from Billabong and a 300 million Australian dollar ($279 million) IPO. A SurfStitch spokesperson was unavailable for comment at press time. "In recent months we have begun the process of taking over the branded websites previously outsourced to SurfStitch," said Billabong chief executive officer Neil Fiske. "With these agreements we can accelerate our investment in the online presence and digital marketing of brands such as Billabong, RVCA and Element, which will engage our core customers and in turn benefit the wider business."“This is the next natural step for our global market-leading ecommerce operations,” said Cameron. “Today’s agreements will allow both parties to pursue their strategic vision. We’ve valued the close relationship with Billabong and, like Neil, we're glad it’s one that will continue." Founded in late 2008 by Cameron and Pedersen, SurfStitch claims to be not only the largest surfwear e-tailer in Australia and Asia, but the world’s largest online action sports and fashion e-tailer, offering 600 brands and 20,000 products, with sales of 80 million Australian dollars in fiscal 2014, or $75.25 million at average exchange.

• Target's Q2 Profits Drop; Lowers Full Year Guidance: Target Corp. posted a drop in second-quarter profits, hurt by charges related to its data-breach incident from last year. The company said net earnings for the three months ended Aug. 2 were $234 million, or 37 cents a diluted share, a 61.7 percent drop from net earnings a year ago of $611 million, or 95 cents. Net sales rose 1.7 percent to $17.4 billion from $17.1 billion. The company also updated its full year 2014 adjusted earnings per share guidance to $3.10 to $3.30 from prior forecasted range of between $3.60 to $3.90. It also said that updated guidance reflects year-to-date pre-tax data breach expenses of $129 million. The company said guidance does not include an estimate of future data breach-related expenses. John Mulligan, executive vice president and chief financial officer, said, "In the U.S., traffic trends continue to recover and monthly sales are improving, with July comparable sales up more than 1 percent." Brian Cornell, newly named chairman and chief executive officer of Target, said, "I'm excited to join the team as we work to drive U.S. traffic and sales, improve Canadian operations and accelerate Target's digital transformation.

Tech:

• Microsoft Bets Big on SME Segment with Azure: Microsoft on Wednesday said it will allow its over 10,000 channel partners in India to offer the Azure cloud platform to enterprises, a move that will enable the global software giant reach thousands of small and medium enterprises (SMEs) in the country. “Microsoft is making Azure available in the open licensing catalogue for India. We saw that many SMEs wanted our Azure platform but they also wanted to work with their local IT partner for the same,“ Microsoft India General Manager (Small and Midmarket Solutions & Partners) Meetul Patel said. With this move, SMBs in India will now be able to purchase Microsoft Azure cloud platform from their local IT partner, he added.

• Snapdeal's Latest Fashion Mantra to Take on Myntra: Snapdeal, India's second largest online retailer by sales, aims to reach sales of over 6,000 crore from fashion in the next financial year as it gets set to launch a slew of initiatives over the next few days, from bringing skilled artisans on board to introducing occasion-based fashion stores, getting premium designers on the site and launching virtual trial rooms. The company is expecting sales of Rs. 1,500 crore this fiscal from fashion. “We want to be the fashion destination for all Indians,“ said Kunal Bahl, 31, co-founder and chief executive of the four year-old company, which has raised over $233 million (Rs 1,413 crore) this year from investors including Premji Invest, Temasek and eBay Inc. “We have already taken the lead in fashion as it pertains to indigenously manufactured fashion. Now we are leveraging that scale in demand to take the lead in international branded fashion as well,“ he added. With its “bachate raho (keep saving)“ tag line and its focus on unbranded products sold by small manufacturers and retailers, Snapdeal had positioned itself as a mass-retailer, with over half of these 50,000 merchants selling fashion and lifestyle products that account for 60% of its orders.

• Empays Plans to Raise $10 M to Expand Biz: Empays Payment Systems India, a multi-bank payment systems provider, plans to raise $10 million (about Rs. 61 crore) as it seeks to increase its footprint in India and abroad. The four-year-old venture expects to start its fund-raising process in September, according to Ravi Rajagopalan, founder and chief executive of Empays. This will be the company's first round of institutional funding since inception. “We hope to use the proceeds to reach out directly to consumers in partnership with our banking partners, expand to the Middle East, the UK and North America, as well as expand our technology portfolio,“ Rajagopalan said. Mumbai-based Empays, which partners with public sector banks such as Bank of India and private sector financial institutions such as Axis Bank, provides an instant money transfer service that allows consumers to remit money to any recipient using their mobile numbers. Founded in 2010 by Rajagopalan, a former executive with French telecommunications firm Alcatel-Lucent, Empays has also tied up with State Bank of India, the country's largest lender, and the privately-held Kotak Mahindra Bank.

• Bollywood Takes to Twitter, Facebook to Promote Films: Movie companies are betting on Twitter and Facebook to woo audiences and rake in the numbers for their films. Last week, the cast of `Happy New Year' -Shah Rukh Khan, Abhishek Bachchan, Sonu Sood and Boman Irani -changed their names on Twitter to their movie names. Actress Deepika Padukone changed her name to Finding Fanny for her upcoming movie. Twitter says Bollywood has been a big segment for the social media platform this year and it will continue to provide backend support for movie tie-ups. For multiplex operators such as PVR, promoting movies on social media adds 4% to cinema hall occupancies and about 1012% to revenue. Producers including Mahesh Bhatt are focusing on social media, especially for niche films like `Citylights,' which was released in May. For this movie, they spent Rs 4.5 crore on marketing in the traditional media versus a few lakh rupees on social media. Going ahead, Bhatt would rather choose the social medium to amplify the message. “Looking back, we shouldn't have spent so much money on traditional media,“ says Bhatt. Traditional forms of advertising for movies are being supplemented with social media promotions, says film critic Taran Adarsh. “Youngsters are glued to social platforms and at times, it makes a lot of sense for filmmakers to announce and share details of their movies on social media instead of engaging offline with a limited number of fans as well as multiple distributors.“ Adarsh himself uses the medium to tweet weekly movie earnings. Earlier this year, Salman Khan's fans received personalised posters directly from his account (@BeingSalmanKhan) during the launch of Jai Ho. Pratiksha Rao, entertainment partnerships manager at Twitter India, says the company has creative coordination with various partners from the film industry and provides technology innovation to execute these projects. “The platform brings people closer to their interests and it is becoming increasingly important for Bollywood partners to discuss their movies on Twitter first,“ says Rao. She adds that actors have revealed their movie character names on Twitter first, along with the trailers, creating a buzz on the subject. Another factor is the craving by movie fans for personal conversations with actors, which a live medium allows. Marketing a movie requires copious amounts of research and if executed well, a movie that has been engaging on social media can draw traffic to the cinemas, says Anirban Das Blah, MD of CAA Kwan, a celebrity management firm. “It's often the most effective medium and gives a great return on investment since it costs very little compared to traditional forms of movie promotions. It is just a supplementary cost to the entire marketing budget,“ he says. Production houses are increasing their budgets for social media spending. “Until a year ago, online marketing budgets were restricted to 5-10% of the entire spend, but now they are up to 20%, which includes social media and creating shoulder content created especially for the online medium for audiences to engage in,“ says Shikha Kapur, chief marketing officer at Fox Star Studio, which has upcoming Bollywood projects including Padukone-starrer `Finding Fanny' and `Bang Bang,' a Hindi action thriller directed by Siddharth Raj Anand.

• Amazon Links Thousands of Indian Firms to Cloud: Six years ago when most enterprises were still trying to figure out what cloud computing means, Apeejay Stya and Svran Group decided to take the entire $1-billion-plus conglomerate to cloud. Today, the family-held group's entire IT infrastructure is on Amazon cloud. “We wanted to have a standardised IT infrastructure for all our group companies across 52 locations and cloud was the best way to do it,“ said Aditya Berlia, a management board member of the Delhi-based group. The company has moved all its servers, including the mission critical ones, to Amazon Web Ser vices (AWS), reducing its internal IT staff to three from 23 and cutting IT costs by over 80%. “The best part about AWS is that whenever I talk to them once in three months, they come up with a new way to reduce my cost, as against others who are constantly trying to dig into my pockets,“ Berlia said. They are not alone. There are over 8,000 companies in India that have already boarded the AWS ship, including large enterprises such as Tata Motors, Reliance Entertainment, NDTV , Narayana Health, Macmillan India, EROS International, Malayala Manorama and Sony Entertainment. Reliance Entertainment has 40% of its total IT workload on AWS.“When we thought of adopting cloud computing for our variable volumes and games apps, AWS was the one which we have adopted from inception,“ said its CEO Manish Agarwal. Amazon is pushing its cloud services in India by not reducing prices on a regular basis but by promising cost reductions to customer. “We have lowered prices 45 times since 2006 with no external pressure to do so,“ said Bikram S Bedi, head of Amazon Web Services India. “AWS is very comfortable with running high volume low margin businesses, which is deep in our DNA,“ he added. Tata Motors has moved many non-critical applications to AWS.“Our customer-facing systems and our collaboration systems are on the cloud,“ said Jagdish Belwal, CIO at Tata Motors. “For us, the public cloud, is just a mode of delivery. We have our customer, dealer portals on the cloud because it is a more scalable model,“ he said. Belwal believes that once Amazon sets up its data centre in India, the public cloud market will become more interesting as now there are some territorial issues in holding the data in the country.

• Glitches Hit IRCTC Windows App: In September last year, the ministry of railways quietly announced an application for users of its e-ticket portal Indian Railway Catering & Tourism Corporation Ltd (IRCTC), but made it available only for Windows phone and Windows 8 device users, who account for less than 10% in the Indian market. The app, which is available free-of-cost on then Windows store, has been rated four stars by 2,199 users since September 2013, when it was launched. However, most users of the Windows operating system who have tried to use the app have been disappointed so far. “The app requires you to generate a TPIN before logging in. It took me multiple tries and over 30 minutes before I gave up the attempt,“ said city-based school teacher Prerna Maggu. “I managed to generate the TPIN, but when I tried to book a ticket, the site was down for maintenance,“ said Bangalore-based IT profes sional Mayur Naidu. Reviews like these abound on the Windows Store. Problems range from not being able to book or cancel tickets, to slow connection issues and the app not syncing with the online application. The app can be used to “plan a trip, make railway reservations, check the PNR status and perform all the tasks already available on the IRCTC website,“ the press note from the railways ministry had said last year. Last week, the ministry had announced a Train Enquiry Mobile App on the Windows platform, which will be followed by an Android version soon. In the second quarter last year, the Android operating system accounted for 91% of the Indian market, according to market research firm International Data Corpora tion (IDC) data. Only 5.4% of Indian users preferred Windows OS. According to CyberMedia Research, Windows platform accounted for 3% and 1.5% of the India smartphone market in the first and second quarter, respectively, this year. “It is a very misplaced strategy for India. IRCTC has not done its due diligence,“ said Greyhound Research CEO Sanchit Vir Gogia.“An app that serves a large section of the public should not be limited to one vendor,“ he added. Similar to IRCTC, Jet Airways had also launched an app exclusively for Windows in May last year. It later followed it up with apps for Android and Apple's iOS to cater to a wider user base. The IRCTC has not announced plans to develop its app on any other OS so far.

• Google offers Rs 1.4cr pay at BITS: Technology and ecommerce players have taken the lead over companies in core industries during the campus placements at the Birla Institute of Technology and Science (BITS)¬Pilani. And Google has offered an annual package of Rs 1.40 crore to students selected this year, sources said. The institute hopes to break its last year record of Rs 1.44 crore, offered to one of its students by Facebook. With companies such as Linkedln, Microsoft, Flipkart, Schlumberger, Goldman Sachs and Amazon also visiting the campus, students eye big offers. All these companies have increased their compensation offer by 5-25%, indicating a better job scenario. The BITS placement ses sion for 2014 started off with Google, which conducted its first round (written) on August 18 at the Pilani campus. The company's HR team is slated to visit India in the first week of September. “A good number of students sat for the first round.We hope that a few of our students will make to the final selection,“ said G Balasubramanium, chief placement officer at BITS-Pilani. This year, 2,300 BITS stu dents are eligible for campus placements -53 were placed in two days, with the highest domestic package of Rs 23.5 lakh. Microsoft and Schlumberger have also shortlisted students. Both have offered more than Rs 70-lakh annual package to BITS students. Overall, BITS has placed 150 students at its three centres -Pilani, Goa and Hyderabad. In Goa and Hyderabad, the placement session started on August 13. Facebook, which visited BITS for three consecutive years till last year and offered the highest package in 2013, is not scheduled to visit the campus this year. The placement officer admitted that attracting these big companies wouldn't have been possible without the support of the alumni who have a wide network among companies. The institute is confident that by the end of April 2015, 100% students will get placements. A few students have shown interest in public sector undertakings (PSUs) due to revised pay grades. Many students here have opted out of placement session to open their own startups. Balasubramanium said among those who opted out of placement sessions, 10 have already started their companies, mostly in IT and communication.

• Traditional retailers bitten by e-com bug: Call it the e-lure. Some of the oldest and most venerable names in brick-and mortar retail are clearly e-smitten. Traditional retail brands like sari major Nalli Silks, consumer durables seller Croma, jewellery retailers GRT Jewellers and Kirtilal Kalidas, garment retailer Arvind Brands and white goods seller Viveks are going online, investing big bucks in marketing and entering new advertising avenues like social media. Many of these retail brands have been fiercely traditionalist till recently, swearing by touch-and-feel sales and investing in the personal connect between retailer and customer. Now they are using the e-way as an additional retailing channel to reach new geographies. That there is nil real estate investment involved in expansion is an added benefit. Take the 50-year-old consumer durables retailer Viveks, which has set up a brand store on eBay India, and plans to soon set up its own e-commerce portal. “eBay has a large customer base and this will help us reach newer areas and new customers. Once we learn how online retailing works, we can then move to our own portal,“ Shankar B K, e-commerce head of Viveks, said. Textile manufacturer Arvind, too, has just entered the online world with its brand Creyate. “We see e-commerce as the next big thing. We are convinced that moving forward ecommerce will be a disruptive force....a large part of consumption will move towards e-commerce,“ Kulin S Lalbhai, executive director of the company , said. Nalli Silks, the 80-year-old silk sari maker, also has a presence online which caters to its customers abroad. Even the 75-year-old jewellery retailer Kirtilal Kalidas Jewellers is taking the plunge soon. “We are investing a lot in marketing for the first time and will go all-out on social media. We plan to set up our own portal before diverting our customers to other marketplaces,“ Suraj Shantakumar, director of Kirtilals, said. The company will be joining its 50-year-old competitor GRT Jewellers in the e-world. Such traditional companies are also coming up with new delivery models where customers have the option to survey products on the website and go to the store to collect their product in person, which is a cross between traditional retailing and new-age online shopping. “Rather than looking at them as a threat, traditional offline retailers are partnering with e-commerce portals and are looking at online shopping as an additional channel for reaching customers, and we are seeing age-old companies like Metro shoes, Viveks, Croma, GRT that are doing well online. Many such traditional retailers are coming up with new delivery concepts like the ‘click-and-collect' model where the customer can select the product online and collect it from the retail outlet,“ Kumar Rajagopalan, CEO, Retailers Association of India, said.

• Bombay Dyeing takes e-tailing route to target youth: Bombay Dyeing, the 135-year-old textile major, is moving into the e-tail domain and plans to come up with a full-fledged cellphone-friendly virtual platform, including mobile apps, within two months. The company executed a soft launch of mybombaydyeing.com one and half months ago, while its bed-and-bathroom product range is also available on other e-tail channels like Flipkart, Jabong, FabFurnish, etc. "Currently, we sell just 4% of our products through the e-commerce segment and, looking at the great demand, we are aiming at selling 10% of our products through this channel by next fiscal," Devleena Sashital, head (brand communication and marketing), Bombay Dyeing, told TOI. The textile major is looking at repositioning itself to attract the younger generation and expand its horizon from bed-and-bathroom to a broader and complete home furnishing-to-decoration segment. The Wadia group flagship is going to unveil 50 more company-owned signature and 'model' retail outlets this fiscal, taking the total number to 400. Ashok Kaul, CEO (retail), Bombay Dyeing, said, "We need to make a product range which is more relevant, progressive and has a deeper connect with the youths. For the last one and half years, we are actually reaching out to this segment's requirement and trying to provide more appeal through a contemporary product overhaul."

• Dot-Luxury Latest Domain Addition: Dear dot-com: It’s time to meet your new domain sibling. Say hello to Dot-luxury. Dot-luxury is one of the 600-plus new generic top-level domain names — others include .news, .shop and .web — that join the existing 250 country codes and 22 TLDs such as .com and .net that are already in use. According to Monica Kirchner, who is cofounder and chief executive officer of .Luxury, the firm that won the auction for the rights to the domain name and, in turn, the registration rights to that extension, the new choices make the “right of the dot more relevant” in a search, a component that now becomes more important when deciding on how to build an online presence. Fashion, jewelry, watches, shopping, travel and even real estate are categories that could all benefit from using .luxury as the new domain name when considering what IP address to use, Kirchner said. That’s because the new extensions are expected to help, or at least enhance, a firm’s online presence as well as aid in the discovery component of search results since the dot-luxury extension is “more intuitive,” she said. Kirchner also sees the new .luxury domain for existing brands that have a dot-com presence as an option for a product launch or a service offering. Brands that have acquired a dot-luxury domain extension are likely initially to use it more as a content site until they determine their best approach to the new name, and Kirchner expects that most will at some point include commerce at the new .luxury site. So far, more than 1,100 domains have been registered in just two months, including more than 600 luxury brands. The average cost for a basic registration is $800 a year. Among the brands or companies that have purchased the new extension are Chanel, Gucci, Hermès, Richemont, Rolex, Azzedine Alaïa, Versace, Harry Winston, Ferragamo, Balenciaga and Isabel Marant. While a brand such as Chanel can have chanel.luxury, categories such as mascara.luxury can exist as well, Kirchner said. According to proprietary research disclosed by Kirchner, 50 percent of affluent consumers regularly buy luxury goods and services online. While almost 90 percent expect luxury Web sites to have a .luxury domain, at least 77 percent think a .luxury domain will help them find the best luxury sites. Heather Clawson, the founder of the blog Habitually Chic, is already onboard the .luxury bandwagon. The URL for her blog habituallychic.blogspot.com has changed to habituallychic.luxury.