Daily News Digest- 22nd Aug'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Gap inks franchise agreement with Arvind Lifestyle Brands: Gap Inc., which sells brands such as Banana Republic, Old Navy and Piperlime, has signed a franchise agreement with Arvind Lifestyle Brands Ltd, a unit of Arvind Ltd to enter India. The agreement will be formally announced on Friday. After the Indian government allowed 100% foreign direct investment (FDI) in single-brand retail in September 2012, a handful of companies including H&M Hennes and Mauritz AB and Swedish furniture retailer Ikea announced that they would enter the Indian market on their own. However, a majority of global retailers prefer the joint venture and franchise route to launch operations in India. In 2013, eight of the 10 new international fashion brands that launched operations in India entered the country through franchise or distribution partnerships, according to research by Third Eyesight, a consulting firm. “Franchising is seen as a lower-risk, arms-length model that allows brands to maintain control on products and the supply chain, which are important to maintain consistency, while keeping minimal involvement and investment in the market itself. On the downside are added costs due to low margins and potentially different operating philosophies between the franchiser and franchisee,” said Devangshu Dutta, chief executive officer (CEO), Third Eyesight. Gap operates both company-owned stores and franchise stores around the world. The retailer has company-operated stores in the US, Europe, Hong Kong, China, Japan and Taiwan. Gap ended fiscal 2013 with 3,164 company-operated and 375 franchise stores around the world, it said in its annual report. The decision to enter India through the franchise routes comes after almost a year of discussions. In November, Mint reported that the two companies were in discussions for a possible joint venture agreement for the Indian market. Arvind is also a supplier of denim to Gap.

• Chhabria Enters Mansion House: Kishore Chhabria, who fought epic legal battles with his brother Manu and later with Vijay Mallya over ownership of liquor company Shaw Wallace and Herbertsons, is now battling Tilaknagar Industries over the trademark of Mansion House, a popular brandy brand.On a high after becoming the biggest Indian spirits tycoon, Chhabria-controlled Allied Blenders & Distillers (ABD) has struck a deal with Dutch distiller Herman Jansen to acquire rights over the brandy brand for India and South Asian markets for an undisclosed sum. At a press conference in Mumbai, ABD's CEO Deepak Roy said the company has bought 50% of the brand rights.He did not elaborate on the details. But sources said the brand has been valued at around 220 crore. So, Chhabria will have to pay out half that sum eventually. But this will now pit him against Amit Dahnukar-led Tilaknagar Industries, the country's 5th largest distiller, which is embroiled in a long-running dispute with Herman Jansen over the ownership of the popular brandy brand. What makes the confrontation more heady is the fact that Chhabria had in the recent past made an unsolicited offer to buy out Mansion House and other brands of Tilaknagar, only to be rebuffed. The move had at least temporarily tripped Dahnukar's fundraising plans after Tilaknagar mandated domestic investment bankers to raise equity. “The assignment of the trademarks (Mansion House and Savoy Club) during pendency of judicial proceedings is illegal. Neither the assignors (Herman Jansen) nor the assignee (ABD) are entitled to use the trademarks Mansion House and Savoy Club as it would tantamount to violation of TI's rights in the trademarks. It's also been upheld by the Bombay High Court,“ said Amit Dahanukar, the promoter of Tilaknagar. Alcohol industry watchers see Chhabria's move as a ploy to up the ante against Dahnukar, forcing him to sell.

• Tata Motors Launches Nano Car in B'desh Market: Tata Motors has launched its low budget Nano car in Bangladesh, two years after it announced plans to capture the market in the neighbouring country. “We are confident that the combination of a perfect product with bestin-the-country service and parts back up will firmly establish the Nano's footprint in Bangladesh,“ chairman of Tata's sole distributor Tata Niloy Group, Matlub Ahmed, told the Nano's launching ceremony last night.

• Times Group Ties up with Huffington Post: The Huffington Post Media Group and The Times of India Group, the publisher of this newspaper, on Thursday announced their partnership to launch an Indian edition of The Huffington Post. The English-language website will combine The Huffington Post’s award-winning news and blogging platform with the local expertise and reach of The Times of India Group. Targeting India’s rapidly expanding Internet user base, which is expected to reach 370 million by 2015, HuffPost India will cover everything from politics, media and entertainment to technology, religion and life style, and open up The Huffington Post’s blogging platform to anyone in the country with a story to tell. The announcement was jointly made by Arianna Huffington, President and Editor-in-Chief of the Huffington Post Media Group, and Satyan Gajwani, CEO of Times Internet (TIL), the digital arm of The Times of India. “I’m delighted to launch HuffPost India, which will be our 12th edition since we began our international expansion three years ago,” said Huffington. “In addition to being a hub for global news and a country uffington Post Media Group, and Satyan Gajwani, CEO of Times Internet (TIL), the digital arm of The Times of India. “I'm delighted to launch HuffPost India, which will be our 12th edition since we began our international expansion three years ago,“ said Huffington. “In addition to being a hub for global news and a country that embodies much of the ancient wisdom the world desperately needs now, India has deep personal significance to me. When I was 17, I studied comparative religion at Visva-Bharati University, outside of Calcutta, and travelled across India, falling in love with the country — a love affair that has continued to this day. So I'm extremely grateful for the chance to bring HuffPost to India to tell the stories that matter most -and just as important, to help people throughout India tell their stories themselves, in words, in pictures and in video.“ “The Huffington Post is the first real digital-first news success story globally, and their impact is seen across the world,“ said Gajwani. “They've coupled a best-in-class technology platform with a fresh way of approaching the world's issues today. We've demonstrated our ability to meaningfully grow international media brands, such as Business Insider, Gizmodo, and more. We are excited to combine HuffPost's world-class product with our local reach with consumers and advertisers to tailor-make a great new destination for Indian consumers.“

• Cayenne's Select Edition Out: Porsche on Thursday launched a select edition of its sports utility vehicle Cayenne priced at 86.50 lakh (ex-showroom Delhi). The Cayenne Diesel Platinum Edition is powered by a 3.0-litre V6 turbo-diesel engine, delivering 245 horse power. The SUV market continues to grow in India and the Porsche Cayenne has experienced positive demand year on year, Porsche India director Anil Reddi said in a statement.

• UK's Carnival Group offers Rs.850 crore to buy Leela Chennai: Debt-strapped Hotel Leela Venture has received a solitary bid for its Chennai hotel from The Carnival Group of the UK. The transaction has entered a crucial stage, and now hinges on how big a haircut can the Leela promoters and the lender consortium take as the bid value at Rs 850 crore is lower than promoter expectations of at least Rs 1,000 crore. Leela Chennai and Leela Delhi are on the block to raise funds to pare the group's debt.The Chennai hotel is a 326-key sea-facing property in MRC Nagar in South Chennai. The Leela chain, in which ITC Hotels holds a 12% stake, has been in the red for the past nine quarters. Its debt has risen sharply to around Rs 5,000 crore from less than Rs 1,000 crore a few years ago, forcing the company to sell some assets. Rapid expansion largely driven by borrowings forced the hospitality chain into Corporate Debt Restructuring (CDR) cell in 2012. Now, with JM Financial Asset Reconstruction Company buying nearly Rs 3,850-crore debt, Leela walked out of CDR and is negotiating to sell the Chennai and New Delhi properties. “We do not respond to market speculation and would ourselves report any such development after the board and the stock exchange have been notified,“ a Leela spokesperson said. The Nairs of Leela and The Carnival Group already have a working relationship. Carnival purchased Leela Group's IT Park in Kochi for Rs 280 crore a few weeks ago. Carnival entered the fray after sovereign funds of Du PARING DEBT bai, Qatar and Malaysia, who had shown initial interest, backed out due to higher promoter expectations. The promoters expect at least Rs 1,850-crore fund infusion with the sale of Chennai and Delhi properties. “The deal now needs a push. Either the promoters or JM Financial should now come forward and see how they get the deal going,“ sources said. The Leela group has already sold their 2.20 lakh square feet Chennai IT Park to Reliance for nearly Rs 175 crore. Though signed in 2012, the transaction has hit regulatory roadblock with Chennai's city development authority yet to accord key approvals.

• Sanjay Lalbai's Arvind Ltd enters into franchise agreement with US-based kids retailer The Children's Place: Textile firm Arvind today said it has entered into a franchise agreement with US-based Kid's speciality apparel retailer The Children's Place. Arvind Lifestyle Brands Ltd, its subsidiary is expected to open 50 stores over time beginning in the fall of 2015, the Ahmedabad based firm said in a statement. Commenting on the development Arvind Ltd CMD Sanjay Lalbhai said:" The Children's Place will be the first of its kind Children's retail format in India. It will be a one stop for children from infants to 14 years olds". The Children's Place President and CEO Jane Elfers said:" We are excited to be partnering with Arvind, which has a proven track record of operating successful apparel brands in India. We are making significant strides in our international franchise business and we remain focused on providing great fashion and value for the kids around the world.""Indian kidswear market has a huge opportunity and we are confident of gaining dominant share of the Indian kidswear," said Arvind Lifestyle Brands MD & CEO J Suresh. The Children's Place is the largest kids's specialty apparel retailer in North America. It designs, sells and licences under the brands - The Children's Place, Place and Baby Place.

• SpiceJet makes way for fresh capital infusion: SpiceJet Ltd expanded its authorized share capital on Thursday, enabling the money-losing airline to raise more funds. The Kalanithi Maran-controlled airline informed BSE after a board meeting that it will increase its authorized share capital to Rs.1,500 crore from Rs.1,000 crore. The airline will also create and allot as many as 189.1 million warrants convertible into equivalent number of equity shares, in various tranches, to the promoters of the company. “SpiceJet is expanding the quantum of shares from 100 crore to 150 crore to give extra space for Maran to infuse funds. Currently Maran has reached the threshold limit of 53% the equity, which means he won’t be able to infuse any additional money into SpiceJet,” said a person with knowledge of the subject who declined to be named. “To avoid this, the quantum of total shares has been increased to 150 crore and Maran can infuse at least another Rs.200 crore into SpiceJet in different tranches as convertible debentures.” SpiceJet posted a record loss of Rs.1,003 crore in the year ended March, five times the loss it had in the previous year. Its net worth on 31 March was a negative Rs.1,020 crore. Its accumulated loss rose to Rs.2,189 crore and debt was Rs.1,736 crore. The airline’s cash balance of Rs.450 crore in 2010 had shrunk to just Rs.5 crore. The Maran family have been continuously investing funds into the airline in small instalments every fiscal year according to rules prescribed by the markets regulator. So far, they have invested Rs.1,400 crore into the airline.

• 5 new IITs, 6 IIMs likely to become operational by 2015: The process of setting up five Indian Institutes of Technology (IITs) and six Indian Institutes of Management (IIMs) promised in the Union budget is under way, amid lingering concerns that this would dilute the brand value of the elite institutions and worsen their resource crunch. The human resources development (HRD) ministry has discussed the proposal to set up the new institutes with the finance ministry twice in the last one month and the centre has written to the states where they are proposed to come up, two government officials familiar with the matter said. The schools will open next year and initially function from temporary campuses, said the officials, who declined to be named. “There is always a need for more quality institutions and all the new IITs and IIMs will be operational from the coming year. It’s better to start them early,” said one of the two officials cited above. “The HRD ministry will float a cabinet note soon—may be in the next two to three months,” the official said. The Union budget presented by finance minister Arun Jaitley had proposed IITs in Jammu and Kashmir, Chhattisgarh, Goa, Andhra Pradesh and Kerala, and IIMs in Himachal Pradesh, Punjab, Bihar, Odisha and Maharashtra. The sixth IIM will come up in Andhra Pradesh as part of the Andhra Pradesh Reorganization Bill. The budget allocated an initial sum of Rs.500 crore for the current fiscal year for these institutes. Once all of them open their doors, India will have a total of 19 IIMs and 21 IITs. The second government official said the Common Admission Test (CAT) conducted by the IIMs and the Joint Entrance Examinations (Advanced) conducted by the IIT system will make provisions for admission to all the new institutes.

• Ramchandra Gandhi, founder of Vadilal Group, dies at 89: Ramchandra Gandhi, founder of the Vadilal Group best known for its ice creams, has died at the age of 89, the company said on Thursday in a media statement. Gandhi, chairman emeritus of Ahmedabad-based group flagship Vadilal Industries Ltd, died after being bedridden for two years due to ill health. He is survived by seven children and their spouses, 15 grandchildren and 16 great grandchildren. Gandhi inherited the family business founded by his grandfather Vadilal Gandhi, who initially sold sodas in Ahmedabad before starting to sell ice creams under the Vadilal brand. They were made using the traditional Kothi method, in which a hand-operated machine was used to churn milk with other ingredients, ice and salt. The Gandhis even offered home delivery, with ice creams packed in thermos boxes. In 1926, they imported ice cream- making machines, paying customs duty to the tune of 300-350%. Vadilal, which had expanded to four ice-cream parlours before independence, became popular for its cassata ice cream, which it introduced in the 1950s. Vadilal remained a city brand until 1972-73. Ramchandra Gandhi, born on 15 February 1925, took over the company in 1942, and turned it into a Rs.400 crore business by 2011-12 with the support of his brother Lakshman Gandhi, Vadilal Industries said in a statement. By the late 1970s, Vadilal, together with Kwality and Joy, had a major share of the ice-cream market that was then opening up to multinational companies (MNCs). Last year, the organized ice-cream market was pegged at Rs.2,500 crore, according to industry estimates.

• TaxiForSure raises Series C funds from Accel Partners-led investors: TaxiForSure.com, an online taxi aggregator, has raised an undisclosed sum of money from a group of existing investors led by venture capital firm Accel Partners. Existing investors in the company include Bessemer Venture Partners and Helion Ventures. TaxiForSure.com did not share the amount raised but said in a statement on Thursday that “the US based venture capital firm (Accel Partners) is usually known to invest anywhere between $35 million to $50 million in companies at this stage”. The funds, the statement added, will be used to hire new talent, grow the company in existing cities and expand to new cities. In May, TaxiForSure closed its Series B funding of $10 million. TaxiForSure launched in Bangalore in June 2011 and was founded by Aprameya R. and Raghunandan G., graduates from the Indian Institute of Management, Ahmedabad. The company has doubled its transactions every three months since January 2014, making it the fastest growing taxi aggregator in India. “We are looking to expand to 30 more new cities in the next one year,” Aprameya Radhakrishna, TaxiForSure’s co-founder and director said over the phone. 

International:

• Argentina debt plan ruled 'illegal' in US court: Argentina's plan to exit its debt default by asking investors holding defaulted bonds to swap them for new locally issued debt has been ruled "illegal" by a US court. New York Judge Thomas Griesa said the plan was "lawless". However, he stopped short of finding the country in contempt of court. Argentina was trying to get around an earlier court ruling banning it from paying interest to investors who had accepted restructured bonds. Mr Griesa ruled in July that the country must first pay the hedge funds holding out for full payment on the bonds on which it defaulted in 2001. "I want to be very clear, this proposal is a violation of the current orders of this court... it is illegal and the court directs that it cannot be carried out," Mr Griesa said on Thursday. The hedge funds, which bought Argentina's bonds at a big discount after its economic meltdown and previous default in 2001-02, are owed an estimated $1.3bn (£766m).

• Australian winemaker TWE hit as it destroys excess wine: Australian winemaker Treasury Wine Estates (TWE) has reported its first annual loss due to slower sales in China and oversupply in the US market. TWE posted a net loss of 101m Australian dollars ($94m; £57m) for the year ended June, compared to a net profit of A$47m the previous year. Slow sales last year led to the group destroying thousands of bottles of excess wine at its US division. The firm also reported an impairment charge of A$384.5m. Without the one-off charge, the group would have earned A$112.8m in net profit after tax. TWE is the world's largest listed winemaker and owns brands such as Wolf Blass, Rosemount and Lindeman's. It is also behind Australia's most well-known winemaker, Penfolds. The company said sales in China were hit by the government's austerity measures. But that was offset by "continued strong volume growth in Hong Kong and increasing momentum in South East Asia."

• Bon-Ton Leads Fashion Stocks: Bon-Ton Stores Inc. led fashion stocks higher today, jumping 12.8 percent to $10.21 despite posting net losses for the second quarter. The beleaguered department store chain, however, saw comparable-store sales rise 1.6 percent for the three months and outgoing president and chief executive officer Brendan Hoffman said the company was well positioned for fall. The company is now looking for diluted earnings per share of 25 cents to 55 cents for the full year, ahead of the 17 cents analysts had penciled in. Bon-Ton was far and away the strongest issue in the 100-stock WWD Global Stock Tracker, which gained 0.4 percent to 100.33. The measure of stock performance launched at 100 on July 8. The weakest stock in the tracker was Sears Holding Corp., which fell 6.8 percent to $33.50. The company’s second-quarter loss widened to $573 million, marking its ninth-consecutive quarter with red ink. CEO Edward S. Lampert is trying to reinvent the troubled chain with a member-centric model focued on the Shop Your Way program. Global stocks were mostly moving higher today. The Dow Jones Industrial Average gained 0.4 percent to 17,039.49 in New York, while the FTSE MIB rose 2.1 percent to 20,010.51 in Milan and the Nikkei 225 increased 0.9 percent to 15,586.20 in Tokyo.

• Dollar General Reaffirms Commitment to Acquire Family Dollar: In the face of Family Dollar's rejection of its offer, Dollar General said it is committed to acquiring its competitor. Rick Dreiling, Dollar General's chairman and chief executive officer, said, "We are disappointed that the Family Dollar board of directors has concluded that our proposal is not reasonably expected to lead to a superior proposal without informing itself of all relevant information." Family Dollar earlier today rejected Dollar General's $9.7 billion offer for the company, citing antitrust concerns. Dollar General made its competing offer earlier this week. Family Dollar last month inked an agreement to accept Dollar Tree Inc.'s $9.2 billion offer, which is still subject to customary closing conditions.

• Stage Disappoints in Q2, Lowers Guidance: Stage Stores Inc. registered among the biggest earnings “misses” of the second-quarter retail cycle and brought down its full-year estimates. Shares slid $1.02, or 5.5 percent, to $17.48 in midday trading Thursday on the New York Stock Exchange and hit a 52-week low of $17.19 earlier in the day. For the three months ended Aug. 2, the Houston-based operator of the Stage, Bealls, Goody’s, Palais Royal and Peebles nameplates reported net income of $11.2 million, or 35 cents a diluted share. This was 16.5 percent higher than the $9.6 million, or 29 cents, registered in the 2013 quarter, when it incurred charges for discontinued operations, but was 17 cents below the consensus estimate of analysts of 52 cents. Sales also fell short of estimates, retreating 3.2 percent to $377.4 million from $390 million and more than $20 million below the consensus estimate of $397.6 million. Comparable-store sales fell 4.2 percent while gross margin grew to 29.8 percent of sales from 29.6 percent in the year-ago period. “We found the second quarter to be challenging, but we were encouraged that our sales trend improved towards the end of the quarter,” said Michael Glazer, president and chief executive officer. “We were pleased with the performance of our back-to-school categories as well as cosmetics, which delivered another strong quarterly performance.” He said the positive momentum seen in the final two weeks of July “has continued into August” and that inventories, up 2.1 percent from year-ago levels overall, were flat on a comparable-store basis.

• Laura Weil Out at New York & Co.: New York & Co. Inc. is looking to both rev up its business and fill Laura Weil’s office in the C-suite. Weil resigned as the retailer’s executive vice president and chief operating officer after two years. The 509-door retailer has begun to search for a new chief operating officer. The company also said its second-quarter losses narrowed to $147,000, or breakeven on a per share basis, from a loss of $2.7 million, or 4 cents, a year earlier.  On an operating basis, the company posted income of $200,000, up from losses of $2.4 million a year earlier. Sales for the three months ended Aug. 2 rose 1.4 percent to $226.1 million from $223.1 million with a 2.3 percent gain in comparable-store sales. “While we continue to operate in a challenging retail environment, during the quarter we experienced increases in average dollar sale, conversion and average unit retail,” said Gregory Scott, chief executive officer. “This led to a breakeven performance, which represented a significant improvement over last year’s operating loss and the highest second quarter gross margin performance since fiscal year 2008.” New York & Co. expects its sales to gain slightly in the third quarter.

• Li & Fung Profits Rise 16% in Half: Sourcing giant Li & Fung Ltd. on Thursday posted higher first-half net profit and sales despite a “mixed economic landscape.” These are the first financial figures Li & Fung has released since it spun off its Global Brands business into a new company last month. The company said net profits attributable to shareholders grew 16 percent to $111.4 million but excluding losses from discontinued operations — namely the Global Brands business — profits rose 45 percent to $209.6 million. Net profits included a noncash gain of $98 million on the write-back of contingent considerations. Sales for the six months ended June 30 rose 3 percent to $8.71 billion. Core operating profit decreased 9 percent to $227.02 million. The company said its strategic additional expenditure on people, infrastructure and service initiatives bit into margins. “The company now, after the GBG spin-off, is simplified. We’ve refocused back to our core businesses of sourcing and logistics,” said Spencer Fung, group chief executive officer, adding that “2014 is going to be a year of investment. With that we’ll be able to achieve organic growth. “We’re increasing our costs in terms to set up for new customers, to set up new geographies to improve our infrastructure,” he said during a press conference Thursday. Fung noted the company is opening a sales office in Myanmar and will be opening new offices in China. The company is also looking to expand its network into Kenya and Ethiopia, he added.

Tech:

• Seen an iPhone Queue? E-Commerce's is Bigger: No one likes to miss the bus a second time. Investors who missed out on the ecommerce boom in the country that began earlier this decade are keen to make amends this time round. These investors, ranging from private equity and venture funds to international hedge funds and brick-and-mortar retailers, are currently evaluating a number of online companies, especially niche single-category retailers in segments such as web-only fashion, babycare and eyewear. “We are very aggressively looking at investing in ecommerce, especially something with local connect or an offline presence,“ said Manas Tandon, principal at TPG Growth India, which has not invested in a consumer Internet company in India so far. “We have seen some interesting businesses,“ said Tandon, whose fund has backed businesses such as accommodation listings provider Airbnb and messaging app Viber globally. Tandon declined to reveal the names of the companies that his fund is in talks with. Recently, Hong Kong hedge fund Steadview Capital made its India entry by investing in music streaming service Saavn, furniture site Urban Ladder and taxi service OlaCabs, the back-to-back deals an indication of the seriousness with which it views the India market. The Internet sector's scorching pace of growth and high-profile deals are fuelling the intense interest. The online retail industry, which was valued at $1 billion two years ago, is expected to reach $32 billion (Rs 1.9 lakh crore) in 2020, according to retail advisory firm Technopak. This year has already seen a flurry of deals -investors have pumped in over $1.6 billion (Rs 9,700 crore) across 24 deals so far this year, compared with $553 million (over Rs 3,300 crore) last year across 36 deals, according to research firm Venture Intelligence.

• EBay considering spinning off Paypal by next year: Report: EBay Inc is considering a spinoff of PayPal, its fast-growing payments unit, as soon as next year, tech news website The Information reported, citing sources. Shares of the online retailer jumped nearly 4 percent to $55.48 at midday. EBay told potential candidates for the position of PayPal chief executive officer, a post that David Marcus vacated in June, about a possible spinoff of the payments unit, the website reported. Marcus is now a Facebook Inc executive. A PayPal spinoff would mark an about-face for the company. EBay CEO John Donahoe has resisted demands by activist investor Carl Icahn to hive off the payments service, saying PayPal was integral to eBay's business - and vice versa - and a split would not make sense. "The board will continue to assess all alternatives to create that long-term value and to enhance the growth and competitive positions of both eBay and PayPal. This position has not changed," eBay spokeswoman Amanda Miller said. Whether eBay has decided to spin off all or part of PayPal, and what structure that could take, remained unclear, The Information reported. Icahn eventually backed off from his demand in April, saying that while he supported a PayPal split in the near future, now was not the time. Some investors, however, feel an independent PayPal can grow by attracting online retailers wary of rival eBay.

• India's Zomato buys Czech & Slovak online food guides for $3.2 million: Online and mobile restaurant discovery guide Zomato has acquired Czech Republic's and Slovakia's largest online restaurant guides, Lunchtime.cz and Obedovat.sk, for a combined amount of $3.25 million. The buyouts seal the company's entry into East Europe and this is Zomato's second overseas acquisition after it bought New Zealand based MenuMania, two months ago. The company spent about $2.2 million for LunchTime and $1 million for Obedovat and plans to double the headcount to about 80 people within six months. "Slowly we will rebrand both businesses to Zomato," said Pankaj Chaddah, cofounder of Zomato. "There won't be any knee jerk reaction (in the merger)." Zomato has taken the approach of inorganic expansion overseas. "It's not really about build vs buy for us - acquiring market leaders with local insight and experience in countries we want to expand to is obviously a good choice since we have a labour-intensive model, and execution is very important for us." Chaddah said. Both companies have common owners and Obdervat has stakeholding in LunchTime. TimesCity, a part of the Times group that publishes this newspaper, has also acquired two companies (Gawbl and DineOut) in the last eight months, and is planning to expand overseas by this fiscal. However low monetisation has always been a challenge as startups in this space, as they depend upon ad sales. To solve this problem, Zomato is coming up with a product which will allow users in most Indian metros to pay restaurant bills through a mobile application. "All merchants in table bookings to food ordering space can give their customers a cash free experience. We will launch the product within three months starting with India and UAE,". Zomato is also looking to enter the Canadian market, after which it plans to focus on North America, Vietnam, Jordan, Kuwait, Saudi Arabia and Ireland. The company is currently present in 13 countries some of which include the UK, New Zealand, Brazil, Turkey, Indonesia and Qatar, besides India. Last November, Zomato raised Rs 227 crore from Sequoia Capital and existing investor InfoEdge. Started in 2008 by IIT Delhi college-mates Deepinder Goyal and Pankaj Chaddah, the company has till date raised about $53 million since its inception. Zomato which plans to charge customers for table bookings and dining from this year, is in the process of registering a local subsidiary in each of the 12 countries it has operations in. "We will install a local payment gateway in each of the local markets to let our foreign customers pay with ease," said Deepinder Goyal, cofounder and CEO of Gurgaon-based Zomato.

• H&M launches Spain online shop to challenge Zara on home turf: Swedish fashion retailer H&M is launching a Spanish online store, adding to the competition faced in its home market by Spain's Zara chain, owned by Inditex. The site will include home decor section H&M Home, just as Zara offers Zara Home. H&M, which has been slower to launch online versus its rivals, has now invested heavily in its web business and plans sites in eight to 10 markets in 2015, after Spain, Italy and China later this year. H&M has been gaining market share despite tough competition from discount retailers, especially in Spain where high unemployment has constrained consumer spending.

• Digital India: Govt to spend up to Rs1.13 trillion in three-five years: India will spend as much as Rs.1.13 trillion in the next three-five years to provide Internet connections to all citizens through an initiative called Digital India. The cabinet cleared the programme on Wednesday, communications minister Ravi Shankar Prasad said. Digital India will act as an umbrella plan to integrate and synchronize all digital initiatives including the national broadband plan and the domestic manufacturing policy. Many of these policies are either in the proposal stage or in various stages of implementation, though heavily delayed. The integration and synchronization under the Digital India plan is expected to ensure timely execution with maximum impact to citizens. The plan will be monitored by the Prime Minister’s committee on Digital India with the ministers of finance, communications, rural development, human resources development and health as members under Narendra Modi’s chairmanship. The plan was first announced by Modi in his speech on Independence Day. Apart from electronic delivery of government services to all citizens and businesses, the plan is expected to create 17 million direct and 85 million indirect jobs, while significantly reducing Indian imports of electronics, according to a presentation of the plan, which was reviewed by Mint. The plan, which rivals any physical infrastructure plan that the government has come out with before, envisages the creation of virtual infrastructure to connect every citizen with high-speed Internet and a plethora of services, using a lifelong digital identity along with mobile phones, bank accounts and a shareable private space on a public cloud. Citizens will be able to easily access government services, which will be seamlessly integrated across departments and jurisdictions, and available in real time on mobile phones and online, in Indian languages.

• Twitter's New BotMaker Cut Spam On The Network By 40%: If you think you’re getting less spam on Twitter, you’re right. Twitter has just unveiled BotMaker, a system that lets the social network create anti-spam bot code on the fly. BotMaker can automatically take down pesky spammers, block suspicious links, and flag shady behaviour — sometimes, even before the accounts in question have had a chance to send out a single tweet. It’s easy for Twitter engineers to set up rules: if an account is blocked by many people after it tweets, for instance, it will be red flagged. Is it effective? You bet. Twitter says that spam on the network has dropped by 40 per cent since BotMaker kicked in. The social network has an in-depth look at how BotMaker works on its engineering blog, so head over to read more.

• Amazon in Shanghai e-commerce pact: Amazon has stepped up its presence in China with a strategic partnership with the Shanghai Free Trade Zone (FTZ). Amazon's branch in China has signed a memorandum of understanding (MOU) with the Shanghai FTZ and Shanghai Information Investment Limited (SII). The deal paves the way for Amazon to bring millions of its e-commerce product offerings from around the world directly to Chinese customers. It comes as Amazon celebrates 10 years of operations in China. Amazon has declined to comment on how much it will spend to set up business in the Shanghai FTZ. In a statement emailed to the BBC, Doug Gurr, president for Amazon China said: "We seek to be the most customer-obsessed on-line shopping platform with vast selections, competitive price and most convenience in China. "Today's partnership announcement with FTZ and SII will help Amazon further realise our vision." Under the pact, Amazon will open its new cross-border e-commerce platform in the free trade zone.