Daily News Digest- 12th Sept'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Caught Between Brown & Green, Cosmetics See Red: The Indian cosmetics industry is furious about a government diktat that shampoos, toothpastes, soaps and other items need to carry a red or brown dot indicating whether the product contains ingredients that are of animal origin, calling it unfair and accusing the Department of Consumer Affairs of issuing the notification without giving companies such as Hindustan Unilever, Procter & Gamble and Colgate Palmolive a chance to give their views. The Indian Beauty and Hygiene Association (IBHA) has petitioned the Bombay High Court, contending that the rule is against the principles of natural justice and that the Supreme Court had dealt with the matter previously. It also said that the issue comes under the Drugs and Cosmetics Act, rather than the metrology department, which has been ensuring that the rule is observed through raids on ware ugh raids on ware houses. The Bombay High Court on Tuesday sought responses from the metrology department and the Union government within two weeks to the plea filed by IBHA against the notification. Hindustan Unilever, part of IBHA, is a copetitioner as well. The division bench comprising justices VM Kanade and PD Kode also directed the metrology authorities not to take coercive action against the companies and posted the matter for hearing on September 23. Metrology refers to weights and measures. “The notification has been issued without seeking comments from the industry, which is against the pre-legislative consultation policy of the government,” a Hindustan Unilever spokesperson said. “It is also pertinent to clarify that this is not a subject matter of the legal metrology department.” According to the June 2014 notification issued by the Department of Consumer Affairs under the Legal Metrology Act, “Every package containing soap, shampoos, toothpastes and other cosmetics and toiletries shall bear at the top of its principal display panel a red or, as the case may be, brown dot for products of nonvegetarian origin and a green dot for products of vegetarian origin.” Products such as lipsticks and lip balms are exempt because they weigh less than 10 grams. The department had directed companies to comply with the changes from July 1.

• Prasoon Joshi is McCann Apac Chief: McCann Worldgroup, the biggest agency network in global advertising giant Interpublic Group's fold, has elevated Prasoon Joshi as its chairman for the Asia-Pacific region, bringing both Greater China and Australia under his purview, with immediate effect, reports Delshad Irani from Mumbai.

• Lightbox , Vertex Venture Invest $5 Million in GreenDust: Investment firms Lightbox Partners and Vertex i Venture have pumped $5 million into Guragon-based GreenDust, according to a person aware of, the development. The investment takes infusion of Lightbox and Vertex into the company to about $10 million. “This fund is part of the investment committed by our existing investors, who are working with us to raise the proposed $100 million in the coming months,“ said Hitendra Chaturvedi, founder of GreenDust. GreenDust, which recently entered into a partnership with Snapdeal for handling the latter's reverse logistics, is eyeing similar collaborations both in India and overseas.

• Shilpa Shetty, Kundra Snap up Defunct Co: Cinestar-turned-business woman Shilpa Shetty, along with her husband Raj Kundra, has acquired BSE-listed defunct company Hindusthan Safety Glass Industries with an intention to diversify their gems and jewellery business through a listed entity. The celebrity couple has acquired 51.51% stake in the Kolkata-based company from the clutch of investors and promoters at an aggregate price of Rs 1.88 crore. The company's market capitalisation was Rs 3.5 crore on September 11. Company promoters Jagdish Agarwal and his family held only 4% stake as on June 30, 2014. Kundra and Shetty, in two separate filings to BSE, said they picked up 25.75% stake each in the Kolkata-based company on September 3, and made an open offer through Mark Corporate Advisors to buy 26% of the stake or 7,94,350 shares of 10 each at 12. “The acquirers intend to build new businesses by diversification into bul lion, gems and jewellery or acquisition of companies in such domains with the approval of the shareholders,“ the Kundras said.

• ITC, L&T can help govt raisers Rs 43k cr: The government has lined up big bang stake sale in blue chip public sector stocks — Coal India, ONGC and NHPC — to raise over Rs 45,000 crore but has so far done little to offload its shares in ITC and Larsen & Toubro, which can help it mobilize another Rs 43,500 crore. While the proposal has been on the table for over five years now, the finance ministry has repeatedly deferred a decision on sale of shares in these two private companies that have no promoter group at the helm, amid intense lobbying to prevent the government from offloading its stake. At the same time, more shares of Axis Bank — the third prominent non-PSU in the portfolio — are expected to be sold in the market as the government chases record disinvestment receipts of over Rs 58,000 crore. Is there a reluctance to sell the ITC and L&T shares? Officials in the finance ministry said they are not holding back the sale and added that a decision will be taken at an opportune time. The government became the owner of these shares by accident when it decided to bail out the erstwhile Unit Trust of India to help the country’s first mutual fund repay its liabilities to retail investors. As part of the deal, dues related to the non-net asset value (NAV) based schemes of the UTI were cleared by the government and after setting all liabilities, the assets, which mainly included shares of top-notch companies, were left with the Specified Undertaking of UTI (SUUTI). Today, SUUTI owns around 11.3% stake in ITC, which is worth over Rs 31,500 crore, while its 8.2% stake in L&T is valued at over Rs 12,100 crore. Based on the current trading price, SUUTI’s 11.6% in Axis Bank (earlier UTI Bank) is estimated to be around Rs 11,500 crore. So, the three stocks put together can help the government mop up over Rs 55,000 crore, which is more than all the disinvestment proposals cleared by the government so far this year add up to. There have been reservations about the government selling shares in ITC and L&T. For instance, shares of ITC, it has been argued, may be acquired by foreign tobacco majors and can have health implications. In case of L&T, the argument is that the company has got into strategic areas, and is undertaking a lot of defence-related activity, which may be compromised if foreign investors bought SUUTI’s shares.

• Time up: HMT Watches to wind down after 53 years: A few decades ago, watches in India meant HMT. It was a prize gift, the sort of thing that parents would promise to give their offspring if they did well in board exams or that would be handed down from father to son, typically at the son's wedding. It's ad punchline portrayed it as "timekeepers to the nation" and nobody suggested that was hype. But time's up for the iconic brand that was launched in 1961 as part of the government's efforts to build a modern India. Like the Ambassador, another marquee brand of the licence-permit era, its clock has finally wound down. Saddled with losses for more than a decade, the government is set to shut down HMT Watches, which was restructured in 1999 to stop the HMT companies from bleeding. But little has changed. During 2012-13, the latest period for which data is available, the ailing public sector company had losses of Rs 242 crore on revenues of Rs 11 crore. Data in the government Public Enterprises Survey shows, the company employed 1,105, which included 181 executives. In contrast, Titan's watch business reported sales of Rs 1,675 crore during the year. HMT virtually had a free run since it was set up in 1961 and set up the country's first watch manufacturing unit in Bangalore in collaboration with Citizen Watch Co. In fact, it claims many firsts to its credit the automatic day-date watch to the first Braille and quartz watches.

• Card Payment Network RuPay Sees Boost From Government Banking Scheme: A government drive to expand banking services in India is giving a boost to home-grown card payment network RuPay, which expects to quadruple the number of users by March and make debit cards more acceptable in a nation where cash is still king. Started in 2012 by a company owned by 10 local and foreign banks, RuPay competes with global payment firms Visa Inc and MasterCard Inc for the few customers in Asia's third largest economy able to afford a debit or credit card. As of July, banks issued just under 435 million payment cards in India, a nation of 1.3 billion people. Most were debit cards. RuPay's share of daily card transactions, however, remains small compared to the global firms, which are more established, offer both debit and credit cards and are accepted by more retailers. RuPay currently offers only debit cards. RuPay users account for just 1.5 per cent of daily card transactions of almost one million at retailers, said A.P. Hota, chief executive of the National Payments Corp of India (NPCI), which runs RuPay. Hota told Reuters the payments network was set to grow rapidly from the government's so-called financial inclusion scheme, which aims to ensure the majority of households has a bank account within months. Under the scheme launched late in August, Indians who open a bank account for the first time automatically get a RuPay card. Hota said the number of RuPay users has now almost doubled from 23 million at the end of July. By March next year, he expects that number to rise to 160 million, with more than 60 per cent of the increase coming from the government scheme.

• Govt moves to ease exits from bankrupt firms: In a move aimed at facilitating the faster wind-up of insolvent companies and providing an easier exit route to investors, the government is considering introducing a bankruptcy code for corporate entities that are headed for failure. The legislation could be introduced by the time of the presentation of the next Union Budget in February, government officials said. The finance ministry formed a committee last month headed by former law secretary T.K. Viswanathan and comprising members from the departments of economic affairs and financial services, the ministries of law, corporate affairs, and micro, small and medium enterprises, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi). The idea is to create a separate set of laws to streamline and update the existing regulations that deal with bankruptcy, although a final decision will be taken only after the terms of reference are finalized by the department of economic affairs towards the end of this month. “The country does not have an insolvency law. This will be for the domestic corporate sector,” a government official said on condition of anonymity. Investors and the regulators have highlighted the need for an efficient bankruptcy system to deal with distressed companies so that investors are able to recover their money at the earliest, especially in the light of many companies facing financial difficulties as economic growth slowed to below 5% in each of the past two years. In his budget speech, finance minister Arun Jaitley had said the government will bring out an entrepreneur-friendly legal bankruptcy framework for small and medium enterprises to enable easy exit, but there are plans to now extend it and create an over-arching framework. Viswanathan confirmed the setting up of the committee, but said the terms of reference are yet to be finalized.

• India lags far behind China in the market cap league: One of the big stories this week has been the news surrounding Chinese e-commerce firm Alibaba, which launched its initial public offering (IPO) this week. Any other week, it would have been the biggest story just by virtue of the size of the IPO, but this week it was pipped by Apple Inc., which released two new phones, a watch and a payment feature built into its smartphones. But let’s look at the Alibaba public offering. The IPO, which is expected to raise over $21 billion, will be the largest in the US and will beat Facebook’s $16 billion public offering by a decent margin. It still may be not be the biggest global IPO though. That honour goes to another Chinese firm, Agricultural Bank of China, which raised $22.1 billion via a listing in 2010. According to a Bloomberg article earlier this week, Alibaba is seeking a valuation of as much as $162.7 billion, larger than 95% of the Standard & Poor’s 500 Index. Each of these numbers are staggering in their own right and even more so when you compare them to India. Consider this. At an expected valuation of over $160 billion, Alibaba will not make it to the list of top 20 companies by market capitalization in the world. But that list already has three Chinese companies—China Mobile Ltd, PetroChina Co. Ltd and the Industrial and Commercial Bank of China Ltd. Each of these, as of this Wednesday (10 September), had a market cap of over $200 billion. Pit these companies against India’s top market cap companies; you see just how wide the gap is. Tata Consultancy Services Ltd (TCS) is India’s largest company by market cap and a well-respected global technology player. But it isn’t even in the triple-digit market cap club. As on last Friday, TCS’s market cap was just under $85 billion—making it 108th in the market cap league tables.

International:

• Alibaba is bringing luxury, fast, to China's middle class: On a cold day in April, a group of New Zealand fishermen set out to harvest 50,000 large oysters from the waters of the South Pacific. Once collected, the briny mollusks were transported to processing facilities, packaged four to a container, sealed in chilled polystyrene containers affixed with bright labelling and put on planes to China. During the next three days, the oysters travelled thousands of miles to 67 cities across the Chinese mainland. There, they were shipped still alive by an army of deliverymen to the homes of thousands of shoppers who had ordered them using Tmall, a website operated by Alibaba, the sprawling internet empire on the verge of an initial public offering that will most likely value it at about $160 billion. It was a logistical feat, transporting oysters from the seabed to the doorsteps of more than 30,000 customers. But it was more than an exercise in supply-chain management. For Alibaba, it was part of a continuing effort to make the instant gratification of global e-commerce accessible to China's expanding middle class. If the biggest internet company in the world's most populous nation succeeds, it will make everything from culinary delicacies to flashy luxury goods available with a few keystrokes. The degree to which Alibaba can deliver on this promise will help determine how much the company is ultimately worth and to what extent it can open up the enormous Chinese market to both global retailers and small businesses in search of growth. "It's a huge opportunity for international sellers to tap into that market," said Victor Anthony, an analyst at Topeka Capital Markets. "Particularly as the Chinese consumer's wallet size is increasing all the time." The Chinese middle class, those earning from $9,000 to $34,000 a year, is poised to balloon in the next 10 years. More than 75per cent of China's urban consumers will fall into that demographic by 2022, according to a recent report by McKinsey & Co. In turn, demand for luxury goods and exotic foods like oysters is set to surge. "Alibaba is working really hard to attract a higher-end customer," said Kelland Willis, an analyst at Forrester Research.

• Apple Watch 'too feminine': Jean-Claude Biver, LVMH: Apple's long-awaited smartwatch looks "too feminine" and its design will not stand the test of time, luxury giant LVMH's watch guru has told German media. Jean-Claude Biver, who heads the French group's luxury-watch division, said the US tech titan had made "some fundamental mistakes" designing the Apple Watch. "This watch has no sex appeal. It's too feminine and looks too much like the smartwatches already on the market," Biver said in an interview with daily Die Welt. "To be totally honest, it looks like it was designed by a student in their first trimester," added Biver, who heads up the brands Tag Heuer, Zenith and Hublot. Biver predicted the much-anticipated device, with its square face and curved edges, would soon be outdated. "Luxury always has something timeless, it's rare and conveys prestige," he was quoted as saying, adding that the same could not be said for Apple Watch, which is expected to be bought by millions of customers and will likely be beyond repair in a few years' time. Biver is not the first watch chief to be dismissive of Apple's efforts. Swatch CEO Nick Hayek earlier told Swiss media that the world's biggest watch group was "not nervous" about Apple's foray into the market. Apple Watch, which comes in several colours and links to the iPhone, will start at $349 (270 euros) when it is released early next year. The wrist device is the first new product category to be launched by Apple since the death of co-founder Steve Jobs in 2011.

• Argentina defies US court in dispute with creditors: Argentina's Congress has passed a bill designed to defy a US court ruling that pushed the country into default in July. It relates to a protracted dispute with hedge funds demanding payment of $1.3bn (£766m) on bonds they hold from a default 13 years ago. The hedge funds had won a ruling in the US preventing Argentina distributing interest payments to all bondholders. The court barred some banks from making payments on $29bn of bonds. But the bill is designed to side-step this. It would allow Argentina to make payments locally or in jurisdictions beyond the reach of the US courts. The bill still needs to be signed off by President Cristina Fernandez de Kirchner, who has described the hedge funds as "vultures" and accused the court of interfering in an issue of national sovereignty. Argentina fell into default again in July after District Judge Thomas Griesa barred the Bank of New York Mellon from transferring an interest payment to bondholders unless Argentina settled with the hedge funds. The hedge fund investors bought Argentine government bonds at a big discount after the 2001 default. They rejected the terms of a restructuring and are demanding a full 100% repayment of the debt. If overseas bondholders want payment, it could mean many having to first change their jurisdiction to avoid breaching the court's ruling.

• Yahoo 'threatened' by US government with $250,00-a-day fine: Yahoo said the US government threatened to fine it $250,000 a day if the search giant failed to hand over user data. According to court documents, the National Security Agency (NSA) had demanded that Yahoo comply with new surveillance rules, something the company said was unconstitutional. Yahoo failed in a court challenge on the constitutionality of the order. But the details emerged on Thursday when a federal judge ordered the unsealing of some material about case. Yahoo's general counsel Ron Bell said publication of the material was "an important win for transparency". Yahoo said that the government amended a law to demand user information from online services, prompting a court challenge. Former NSA contractor Edward Snowden disclosed the programme last year. But the court documents reveal that the battle over surveillance between technology firms and the US government stretched back years before the Snowden revelations. The new material about the case, first reported by the Washington Post, underscores "how we had to fight every step of the way to challenge the US government's surveillance efforts',' Mr Bell added. "At one point, the US government threatened the imposition of $250,000 in fines per day if we refused to comply," he said. About 1,500 pages of previously classified documents were unsealed by a federal court.

• Mastercard fees were anti-competitive, court upholds: The European Court of Justice has upheld a ruling that fees charged by Mastercard were anti-competitive. The court said regulators were right to condemn the cost of its interchange fees - the fees retailers pay banks to process card payments - and has rejected an appeal. Mastercard was investigated last year for the amount it charged for card transactions in Europe. The company's president said the ruling was "disappointing". Javier Perez, president of MasterCard Europe said despite that, the ruling would have "little or no impact on how MasterCard operates". He said: "We will continue to comply with the decision as we have been doing for a number of years. This means we would maintain our European... cross-border consumer interchange fees at a weighted average of 0.2% for debit and 0.3% for credit." Mastercard is the second-largest credit and debit card company after Visa. UK retailers welcomed the court's decision. Helen Dickinson, director general of the British Retail Consortium, said: "We are delighted with this historic ruling. "Capping these excessive and anti-competitive fees will support the UK retail industry and others, boosting our ability to invest and innovate while continuing to deliver lower prices and value for customers." The decision ends MasterCard's seven-year battle against a decision made by the EU's competition watchdog.

• RadioShack seeks rescue and warns of bankruptcy: US electronics retailer RadioShack has said that it is in talks to restructure the firm but warned that if an investment is not secured soon, it could be forced to declare bankruptcy. The chain has struggled to offload its costly real estate portfolio, even as it has shuttered stores. Shares in the firm surged more than 18% on news that bailout talks were still progressing. RadioShack reported a loss of $137m (£84m) in the second-quarter. It operates approximately 4,485 stores in the US, which sell everything from mobile phone accessories to converters. However, the company said that over the early summer period, sales at stores plummeted 20% from a year earlier. Earlier attempts to close nearly 1,000 stores were blocked when lenders did not agree to the plans.

• Lululemon Stock Spikes on Q2 Gain: Workout wear specialist Lululemon Athletica Inc. regained some favor in the investment community Thursday with second-quarter results that beat modest expectations and a forecast of positive comparable sales in the third quarter. Shares shot up $5.34, or 13.9 percent, to close at $43.73 in Nasdaq trading, their highest close since June 11, the day before the firm reported disappointing first-quarter earnings. But the stock is still 43.8 percent below its 52-week high of $77.75 reached Oct. 4. Investors were encouraged by “beats” on both the top and bottom line, by projections of a comp increase in the new quarter, by inventory levels that rose less than sales and by product adjustments made under the stewardship of chief product officer Tara Poseley.  But concerns remained about intensified competition in the yogawear category from players such as Gap Inc.’s Athleta business and possible margin erosion as the company becomes more dependent on transitional fashion products and less reliant on core items. There is also uncertainty about the company’s ability to get its 270 stores, principally in North America, back into positive comp territory on a sustained basis. As a result, most analysts tracking the firm maintained “neutral” or “market perform” ratings for the stock.  “We do not believe this quarter is anything that gives us confidence to say Lulu is on a straight path to recovery,” commented Wells Fargo Securities analyst Paul Lejuez. “We continue to expect many more bumps along the road as competition intensifies in the category and Lulu strives to find the right balance between basics and fashion.” The bumps have been many for the once high-flying stock in recent seasons, from its recall of overly sheer Luon yoga pants in early 2013 to its battle with founder and former chief executive officer Chip Wilson, recently settled with the sale of about half of his shares to Advent International. Those struggles were at least temporarily in the rear-view mirror Thursday as the company reported net income of $48.7 million, or 33 cents a diluted share, for the three months ended Aug. 3. While 13.7 percent below the $56.5 million, or 39 cents, reported in the comparable 2013 period, the earnings per share result was 4 cents better than analysts, on average, had expected. Revenues, expected to hit $376.8 million, exceeded estimates as well, rising 13.4 percent to $390.7 million from $344.5 million a year ago. Comparable sales were flat on a constant-dollar basis, with same-store sales down 5 percent and direct-to-consumer revenues up 30 percent to $63.5 million. The flat comp result exceeded the 2.9 percent decline expected by Retail Metrics. Gross margin receded to 50.5 percent from 54 percent while operating margin pulled back 555 basis points to 17.4 percent of sales, the largest such drop since the Luon recall cut into first-quarter results in 2013. John Currie, chief financial officer, gave an upbeat assessment of recent trends in the company’s stores on a conference call with analysts.

• Dan Cherian Joins VF in Innovation Role: Dan Cherian has joined VF Corp. as vice president of global innovation for performance apparel and footwear. A veteran of Nike Inc., he will oversee the company’s innovation centers in Alameda, Calif., home city of the company’s North Face and outdoor business, and Stratham, N.H., where the Timberland brand is based. He will report to Steve Rendle, senior vice president for the Americas. Cherian was most recently general manager of Nike’s sustainable business lab and, prior to that, held positions at Pfizer Inc. and the Boston Consulting Group. “Our goal is to shape the future of apparel and footwear,” Rendle said. “VF has emphasized the importance of product innovation as a key growth driver for the company. Adding Dan to our team to lead our performance apparel and footwear initiatives further demonstrates our commitment to creating breakthrough, must-have products for consumers.” Cherian will set global innovation strategies, shape and manage the global product innovation portfolio and take the lead in establishing the innovation teams in the two centers, which will include designers, engineers, chemists and other scientists. The company is building a new facility on the grounds of its Alameda campus to house the performance-apparel lab and leasing a separate building, near Timberland’s offices in Stratham, for the footwear hub, according to a VF spokesman. In addition to the facilities under Cherian’s purview, a jeanswear innovation center has been established near VF’s headquarter in Greensboro, N.C. Eric Wiseman, chairman, president and chief executive officer of VF, discussed plans for the innovation hubs at last year’s WWD Apparel & Retail CEO Summit in New York and emphasized the importance of physically separating their personnel from VF’s existing offices and brands. “Their objective,” he said, “is greatness…to not ever get distracted from finding something that’s really a breakthrough in the industry.” VF, which first announced plans for the centers in August 2013, hasn’t disclosed its budget for the innovation project. VF is the largest apparel company based in the U.S. Its 2013 revenues totaled $11.42 billion.

Tech:

• Amazon Rolls Out Wholesale Plans for India: Amazon is preparing to launch a portal for wholesale merchants in India, the first country outside the US where such an initiative is being planned by the Seattle-based company. The wholesale portal could be launched early next year, according to two people with knowledge of the plans. “The (Amazon) India team has been working on this top secret project for the past few months. Talks with potential suppliers and the hiring process have begun,“ said one of the sources. “It will be similar to what Walmart is doing online in India and what Alibaba does in China.“ The initiative could be led by Samir Kumar, who is currently director of category management, said a third source. The wholesale team will report to Amazon India head Amit Agarwal. An Amazon India spokeswoman said: “As a policy, we do not comment on anything that we may or may not do in the future.“ Since debuting its online retail business in India last year, Amazon has grown rapidly . Amazon has grown rapidly and aggressively in India, challenging Flipkart for market leadership in the country. Illustrating the scale of its ambition, founder Jeff Bezos announced that Amazon would invest $2 billion (Rs 12,000 crore) in India just a day after Flipkart said it had received $1 billion in funding. “It is important to note that there is no FDI restriction when it comes to online business-to-business operations,” said Arvind Singhal, chairman of retail advisory firm Technopak. The India wholesale portal will be similar to AmazonSupply, its online site in the US focused on business consumers. The India platform will also target small and medium enterprises. However, it is not clear yet whether the company will offer all categories of products under its wholesale platform. For instance, AmazonSupply does not sell apparel and other soft lines such as furnishings. AmazonSupply was launched in 2012 and is still in ‘beta’, or test mode. The site, which does not have a minimum order size, sells products ranging from office supplies to electrical equipment.

• Here's How Google will Grow Facebook Population in India: Even as Google prepares to pry open larger chunks of the Indian market with an array of cheap smartphones as part of its Android One programme, it will also willy-nilly help rival Facebook grow its India numbers. Next Monday, Google is widely expected to launch a range of Android One smartphones mostly priced under 6,000 ($100). These have been developed in partnership with local mobile phone manufacturers including Micromax, Karbonn and Spice. They are expected to be loaded with top-end features such as dual core chip, 5 MP camera and 4.5-inch display. But, as these cheap and powerful smartphones flood the market, Facebook will benefit as much as Google as new smartphone users will also log into the former's popular social networking and messenger applications. Facebook has 108 million users in India active monthly, of which 94 million access it on a mobile. “A low-cost smartphone which allows a good user experience will accelerate adoption of Facebook,” says Jessie Paul, CEO, Paul Writer Strategic Advisory, a marketing consultancy. “In fact, it could take Facebook’s access on mobile devices to 100% from about 93% at present.” “We are now looking forward to one billion users in India. That is a different focus and challenge,” Javier Olivan, vice-president, growth & analytics, Facebook, had told ET in a March interview. Google’s Android One will make the challenge easier. Google, Facebook and much of the Internet companies ecosystem are often referred to as ‘frenemies’. They are friends in the sense that the success of any one company invariably yields spin-off benefits for others; enemies because all of them compete for the same users and online advertising dollars. Google’s Android One program will not only benefit Facebook, but the entire gamut of social networking companies including Twitter, Instagram etc, all of which will gain more smartphone users. But Facebook could gain more than others, since it has the largest user base in India. CEO Mark Zuckerberg has crafted a mobile first strategy for Facebook and has publicly admitted the company’s biggest mistake was “we burned two years not working on mobile.” “Every service will benefit, be it Facebook, Whatsapp or Skype,” says Katyayan Gupta, analyst, eBusiness & Channel strategy, Forrester Research. Google and Facebook declined to comment on this story. Android One is tipped to be a game changer in the smartphone market, delivering a better experience to users.

• Spice Retail Unveils `Smartphone Spa': Spice Retail has unveiled its first 'Smartphone Spa', a concept where users can buy skins and other accessories as well as get repairs done for any brand of smartphone. Spice Retail, which runs a chain of retail outlets under 'Spice HotSpot' brand name, plans to set up similar spas in Bangalore and Kolkata as well. “People invest good sum of money in buying a smartphone but when it comes to accessories or even customer support, they have to look around for places,” Spice Retail Group CEO Prashant Bindal said.

• BigBasket.com Raises Rs 200-Crore Funding: Online grocer BigBasket has received funding of 200 crore in a round led by venture capital firms Helion and Zodius Fund II with Avendus. Existing investors Ascent Capital and LionRock Capital also participated in the round which saw the valuation of the two-year-old startup cross $100 million (600 crore). The Bangalore-based firm, which is also present in Mumbai and Hyderabad, will use the funds to expand to 10 cities by December next year. It plans to expand to Pune and Delhi within six months. “This is a billion dollar opportunity, you need to have depth of funding to do full justice to the market,” said VS Sudhakar, cofounder of BigBasket. “It is very logistics intensive, we control it up to the last mile.” With over 12,000 products and over a 1,000 brands, BigBasket delivers food items such as fruits, vegetables, bakery, dairy products and frozen foods, to customers. The company, which has crossed annual revenue of 250 crore and is growing 10% each month, relies heavily on technology solutions to track every process from the time an order is placed. “This money will help us to invest in new technologies to improve customer experience,” said Sudhakar. “Using data analytics we would now be able to predict customer shopping habits and requirement.” BigBasket.com is a second coming for Sudhakar and five other friends. They had launched online retail website Fabmart in 1999, but could not move the mass market in terms of volumes. With BigBasket though, the timing is better. By 2016, the Indian grocery market will have overtaken Japan to $566 billion (34 lakh crore) and become the world’s third-largest, according to research firm IGD. Investors are beginning to regard the segment as one of the promising within the online retail industry. “The largest player in online grocery space is a nice addition to our ecommerce portfolio,” said Sanjeev Aggarwal, managing director, Helion Advisors. “BigBasket is poised to make capital of the early mover advantage and we are happy to back them.” Margins in grocery business in India are above 20% compared with countries like the US and the UK, where they run in single-digit numbers. BigBasket, which has now raised total funding of 278 crore, competes with more than a dozen of online grocery stores, including ZopNow, AaramShop, and Farm2Kitchen.

• MakeMyTrip Launches $15M Fund for Travel Startups: MakeMyTrip, the Gurgaon-based online travel firm, has established a $15-million (90-crore) innovation fund to invest in startups working on travel-related technology. With this move, the Nasdaqlisted MakeMyTrip follows the footsteps of a handful of digital companies in India such as InfoEdge, One97, Times Internet and Smile Group, which invest in startups related to strategic businesses. “The MakeMyTrip board in its last meeting has given a goahead to create a fund of $15 million to invest in young ventures in the travel technology space. The fund will be created out of 10% of cash assets on our balance sheet,“ said Rajesh Magow, co-founder and chief executive (India) at MakeMyTrip. The fund, which plans to make investments globally, will have an investment committee comprising MakeMyTrip's three co-founders -Magow, Deep Kalra and Keyur Joshi -besides three other directors. “We will look at investing in Series A kind of investments in startups. Areas such as mobility, holidays, taxi aggregation and niche travel are some areas we are excited about,“ said Magow, who is also an independent director on the board of Flipkart, India's largest online retailer. Series A, or early-stage, investments typically range from 4-10 crore in India. Entrepreneurs in the travel space welcome such a fund. “An investment fund just for travel domain will encourage entrepreneurs trying to build niche companies in this sector,“ said Deepak Wadhwa, CEO of WeAreHolidays, which sells online packages worth $1 million a month. “If such a fund had existed two years ago, it would have made our life easier,“ said Wadhwa, an ex-MakeMyTrip employee who recently raised investments from Matrix Partners for his startup. Travel bookings in In dia are expected to gross $28 billion by the end of 2015, about 40% of which are done online. Globally, companies such as Cisco Systems, Intel, Google and Microsoft have all established separate venture funds out of their balance sheets, to invest in young ventures, which operate in an area strategic to the interests of these companies. MakeMyTrip plans to replenish the fund from its cash assets whenever the need arises. The MakeMyTrip Innovation Fund will not invest in large deals.

• Twitter Stitches Deals with Television Channels to Drive User Growth in India: Twitter is speeding up its partnerships with television channels in India as part of a strategy to drive user growth in one of the company's fastest expanding markets. The company also launched its Amplify product, which helps networks monetise content, last month with Star Sports and Vodafone. Television partnerships are a key way in which the company is looking to monetise its user base globally. Last year, it paid $67 million for Bluefin Labs, a startup that uses analytics to tie social media chatter to television. In India, Twitter already has a tie-up with Airtel DTH, which allows customers to view tweets on their television screen. More deals in the space are underway. “We want to make Twitter the second screen for television channels in India. In keeping with television, I would say stay tuned,“ said Rishi Jaitly, India market director at Twitter. India is a strategic growth market for Twitter so the current focus is on driving user growth and less on monetisation. India will account for the third-largest market for the micro-blogging site, with 18.1 million users by the end of 2014, according to research firm eMarketer. Globally, Twitter has more than 270 million monthly active users. The TV strategy helps Twitter as it increases the conversation around hit shows and helps the channels by getting new viewers to tune in. “We've worked with a “We've worked with a number of channels like general entertainment channels Colors and Star. Even Doordarshan has a very interesting personality on Twitter. The idea is to educate brands and teach the best practices like talking to your audience and getting the talent in getting the talent involved,“ said Pratiksha Rao, entertainment partnerships manager at Twitter. The company is working on a four-pillar strategy to boost user growth -partnering with broadcasters by getting actors on the platform, deploying products such as Twitter missed-call that work on feature phones, and by getting brands involved to drive engagement and advertising spend on the micro-blogging site. The channels are also using Twitter to drum up audiences for their shows. Star Plus is debuting the promo for the Aamir Khan-hosted Satyamev Jayate on the site by asking fans to tweet a hashtag. Colors' dance show Jhalak Dikhhla Jaa tweets images from the programme before it airs to try and boost viewership. News channels have been using Twitter to drive viewer engagement for some time.

• 5m Gmail passwords leaked by hackers: A week after the leak of nude pictures of celebs from Apple’s high-profile iCloud, Google is the latest cybercrime victim with Russian hackers posting usernames and passwords of close to five million Google accounts online. The list was posted on bitcoin forum btcsec.com by a user called Tvskit. The user claimed about 60% of the passwords were still active. The same Google account password is used across all Google products like Gmail, Youtube, Hangouts, Drive and Maps. Acknowledging the leak in a blog post, Google said it had found that “less than 2% of the username and password combinations might have worked“. It further said that Google's automated anti-hijacking systems would have blocked many of those login attempts. “We have protected the affected accounts and have required those users to reset their passwords,” Google said. Google maintained that the leaked usernames and passwords were not the result of a breach of Google systems. “Often, these credentials are obtained through a combination of other sources,” it said. Cautioning users, Google said they should ensure they use a strong password unique to Google and update recovery options, so that they can get the information on e-mail or phone in case they get locked out of their account. “And consider 2-step verification, which adds an extra layer of security to your account,” it said.

• EBay to launch an in-app mobile advertising network: EBay Inc plans to launch an advertising network for its mobile app, moving the company into the lucrative, fast-growing market for ads on devices such as smart phones and tablets. "Now, for the first time, we're giving you the opportunity to connect with eBay users throughout their entire shopping journey," according to a new page on the company's website. Mobile ad spending in the United States will total $17.73 billion this year, up 83 per cent from $9.69 billion in 2013, according to industry research firm eMarketer. EBay said its mobile users spend three times as much time on its site compared to its nearest rival, who eBay did not name. Because eBay users have a single, universal login, the company can track their activity across all devices. EBay is working with Triad Retail Media to place the advertisements. The Wall Street Journal first reported the news.

• Vu Technologies Launches Quad-Core 50 And 55-inch 4K TV’s In India: Vu Technologies launched two new beautiful 4K LED televisions in India. The company has taken the competition right up to the Sony's and Samsung's of the world. They are claiming that the new set of televisions launched by them are available for one-third the price of Samsung, LG and Sony 4K TV's. These televisions can upscale HD feed to 4K viewing and will enhance the picture quality accordingly. Both the TV's are internet ready and one can browse YouTube videos and more using broadband Wi-Fi. Social and smart browsing features are also available in these. As far as the power consumption is concerned the 50-inch model consumes 110 watts and the 55-inch one gobbles 120 watts. Couple of HDMI ports are also available in these TV's. Devita Saraf, CEO and Design Head, Vu Televisions commented at the product launch "The Television is treated as a family member in India, and excellent picture quality and service enhance this experience. Our TVs are the only A+ grade panels in India, which is the top 15% of all the world's television production. With our Ultra HD Range, we make large size TVs even more advanced and yet affordable". These 4K LED TV's seem like a great offering and one can definitely look at them as a major contender. The R&D of these televisions happens in California, USA. However, the most basic problem with these television in India would be its after sales service. In the world of Samsung's and Sony's, who have a great fan following, how will a brand like VU survive? Let's wait and watch. The 50-inch VU 4K TV is available for Rs 89,900 and the 55-inch one can be picked up for Rs 1,19,000.