Daily News Digest- 19th Sept'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• HUL gets Mumbai bhelpuri sellers to wrap roadside snack in leaflets of Pepsodent campaign: When Vishal Thakkar bought four packets of bhelpuri from a roadside vendor in Mumbai late last month, they all came wrapped in similar green colour papers with children's drawings and messages about brushing teeth and fighting germs, bringing a smile to his face. Only when he found the same eye-catching design on the paper cone in his next ‘chaat outing' did Thakkar realise it wasn't a coincidence. It was part of a marketing campaign by Hindustan Unilever for its oral care brand Pepsodent. India's largest consumer products firm has tied up with around 48 bhelpuri walas across Mumbai, asking them to wrap their popular roadside snack in leaflets of Pepsodent's campaign about fighting germs and brushing twice a day . “The idea was, how can we spread the oral care message to adults in a manner that is relevant for them?' Bhel is a popular evening snack and that is the time to tell adults to brush twice a day,“ said Atul Sinha, category head for oral care at HUL. Marketing experts say such initiatives create a bigger impact than promoting brands through paid media channels. “At a very low cost, you get high recall and people talk about it. So the engagement quotient is high too,“ said Alpana Parida, president at brand strategy firm DY Works. She considers HUL's initiative as part of `earned media', which means creating a buzz by virtue of your own action. This is not the first time HUL has come up with such an innovative idea to take its message directly to consumers. A year ago, at the Kumbh Mela, it stamped `Did you wash your hands with Lifebuoy?' message in Hindi onto millions of rotis in a campaign that was awarded the Grand Effie as well as Bronze Lion at Cannes earlier this year. Last year, Coca-Cola came out with its `Small World Machines' campaign that allowed consumers in a mall in New Delhi to interact with those in a mall in Lahore through high-tech Coca-Cola vending machines with 3D touchscreen, and it followed it up with a commercial with visuals of some of these interactions.

• ITC to Enter Home Worship Market, in the Name of God: The ingredients are all there in this sacred space: a big consumer market that no large company has managed to dominate, the ongoing festive season, daily rituals to please the gods, and social media savvy youngsters as potential customers. ITC, the FMCG, tobacco, packaging, paper and hotels conglomerate, is set to plunge into the 6,000-7,000 crore home worship or pooja market with incense products — an extension of its agarbatti business. In a soft launch, it has brought out packaged sambrani or dhuno, dhoops and combo packs of agarbatti stands, diyas and candles, along with its line of Mangaldeep agarbattis. As it did during Ganesh Chaturthi in Maharashtra, ITC will also launch limited edition packs of Mangaldeep agarbattis with pictures of gods and goddesses, which it says are sacred enough to find a place in pooja rooms in millions of homes across the country. It is also evaluating other associated product categories such as kumkum and haldi. “Since ITC has already been operating in the agarbatti space for the last 10 years with a ready supply chain, including supplies to temples, specialty pooja stores and grocery stores, the extension of the agarbatti brand Mangaldeep into other pooja products is a big potential area,“ said VM Rajasekharan, ITC chief executive (agarbatti business). The use of aromatic substances is an ancient tradition in India. Fragrances play a key role in Hindu religious rituals, where offerings include flowers, sweets and diyas (lamps).These substances have evolved over the years into their present-day avatars such as agarbatti or incense sticks and dhoops.

• Maruti Appoints RS Kalsi as Head of Domestic Sales & Marketing: After the sudden exit of its marketing head Mayank Pareek, Maruti Suzuki India on Thursday appointed RS Kalsi as the new head of its domestic marketing and sales. Kalsi in the rank of executive director, heads the critical spare parts, accessories and outbound logistics divisions of the company. He will report to the Kenichi Ayukawa, MD of Maruti Suzuki India. A mechanical engineer from the Delhi College of Engineering, Kalsi joined Maruti in 1984. According to his profile, he served in various roles, including vendor development, supply chain, parts inspection and engineering. He was also associated with the company's foray into new businesses like the used-car vertical called Maruti True Value and The Motor. The company has not changed the status of Shashank Srivastava, also an executive director, who will continue to head the crucial international marketing division for the company. He is in charge for export of cars from India to several overseas markets under the parent Suzuki Motor Corporation. Srivastava will also report to Ayukawa. The company remained silent on the exit of Pareek, the high-ranking Indian executive who operated as senior executive officer (marketing and sales), and resigned last week.

• JetKonnect to be Discontinued from Dec 1: Jet Airways on Thursday said it will operate only full service operations from December 1 this year. This will be valid for all bookings done on or after September 15, the airline said. Jet Airways currently operates full service flights under its eponymous brand ll and low-fare flights under the brand JetKonenect. The announcement for a single brand ll was made on August 11.

• Datawind to Launch Rs.2,000 Smartphone with Free Net: Low-cost mobile devices maker Datawind will launch a 2,000 smartphone before Diwali that will come bundled with free Internet for life. The company said the device will be based on Android operating system. The company is in talks with three mobile operators for the lifetime free Internet offer.

• Nielsen India Buys Indicus Analytics; Looks Out for More Acquisitions: Market researcher Nielsen India has acquired 100% stake in economic research firm Indicus Analytics for an undisclosed amount. This is Nielsen's first acquisition after the firm became Nielsen India, and is looking for more such opportunities in the country. After this, Indicus Analytics will merge with Nielsen India, and Indicus' founder and managing director Laveesh Bhandari will join Nielsen as chief economist. “We worked together for a year, where we used the services of Indicus and the talent they have, and we thought it was a good match. With this association, we will be able to spot the demand better even at a micro level for our clients,“ said Piyush Mathur, president, Nielsen India region. With the acquisition of Indicus Analytics, Nielsen will add capabilities for micro and macroeconomics research and analytics, both for the government and private companies, he added. Indicus provides analytics and data products for clients in consulting, ministries and policy groups, multinational corporations as well as domestic companies across multiple sectors. It has data from even granular levels such as profiles of districts, towns and rural blocks of India, and maps 640 districts at present. “We have been collecting data about Indian cities at a very micro level, even at the district level. We are currently operating on a small scale and this association will help us in getting access to a larger network. We can now expand our services not just in India, but also globally using Nielsen's network,“ said Bhandari. Indicus has a team of 50 people working from its offices in Delhi, Bangalore and Pune. Nielsen India is looking for more such acquisitions in the country and has hired a person to look after mergers and acquisitions.

• Marks & Spencer to open 40 stores In India by 2016: UK-based apparel chain Marks & Spencer said the company will double its store count in India taking it upto 80 by 2016. "India is an important market for us. We will open 40 stores by 2016," Marks & Spencer Managing Director Venu Nair said. It operates through 51:49 joint venture with Reliance Retail. M&S, which operates in the country through a joint venture with Mukesh Ambani's Reliance Retail, currently has 42 stores across the country. Before joining hands with Reliance Retail five years ago, M&S operated in the country through local franchise partner Planet Retail between 2001 and 2008.

• Ikea to invest $500 million more in India, eyes 25 stores in 10 years: World's largest furniture retailer Ikea today said it has plans to invest Rs 12,500 crore to set up 25 stores in the country over the next decade. The new stores, each needing investment of around Rs 500 crore, will come in the cities like Mumbai, Delhi, Hyderabad and Bangalore, the Swedish furniture retailer said. Ikea India has already got FIPB nod to invest Rs 10,500 crore. It will mobilise around $500 million more from its global partners for investing in these proposed stores. "We are looking at investing around Rs 12,500 crore to set up 25 stores at a cost of Rs 500 crore each. We will be mobilising $500 million from our global partners for this venture," Ikea India chief executive Juvencio Maeztu told a retail summit here. "It is difficult to specify any time-frame when we will set up the first store, still I can say we are working on it and we are in talks with different states and are looking at all major metros for land as we require very large area of land that is near a highway," he added. The company is likely to set up its first store in Bangalore or Hyderabad within the next couple of years. The company would require very large space as each store will be set up in an area measuring 3,50,000 sqft, he said, adding that it has not yet singled out any city for setting up its first store.

• Cafe Coffee Day may push back IPO by 9-12 months: Cafe Coffee Day (CCD), founded by V.G. Siddhartha, is likely to push back plans to raise money through an initial share sale by another 9-12 months as the coffee-shop chain looks to shore up its financial performance and cope with increasing competition, including from the world’s best known coffee chain, Starbucks. In addition, a decision is yet to be taken on whether the listing should be of the holding company—Coffee Day Enterprises Pvt. Ltd (CDEPL)—or the coffee chain itself, said three investment bankers and an investor familiar with the development. Bangalore-based CCD didn’t respond to an e-mail seeking comment. Media reports earlier this year had mentioned both options. The reports had valued the coffee chain at $1 billion. CCD has seen its sales growth drop over the past two years because of slowing economic growth and high inflation which has hurt demand. Alongside, increased competition in India’s dining and fast food market has eaten into the coffee chain’s market share. The Coffee Day Group, whose holding company is CDEPL, owns Amalgamated Bean Coffee Trading Co. Ltd (ABCTL), which runs the CCD chain across India and eastern Europe. CDEPL also owns a 53% stake in publicly traded firm Sical Logistics Ltd through its unit Tanglin Retail Realty Developments Pvt. Ltd. The holding company also operates a real estate arm Tanglin Developments Ltd, a financial services firm way2wealth.com, and a luxury resort in Chickmagalur in Karnataka.

• Puma India appoints Abhishek Ganguly as managing director: Sportswear retailer Puma India Pvt. Ltd has appointed sales and retail head Abhishek Ganguly as the new managing director, replacing Rajiv Mehta. Mehta, who was managing director at Puma India since 2005, will leave the company. “As one of the founding directors of Puma India. Abhishek brings with him a wealth of experience that will guide the brand towards it’s next leap in India,” said Martyn Bowen, general manager, EEMEA (Eastern Europe, Middle East and Africa) region at Puma. According to analysts, Puma is estimated to be India’s second largest sportswear brand, ahead of Nike India and behind market leader Adidas.

• Walmart India to offer e-commerce option in all stores: Walmart India, the Indian arm of Wal-Mart Stores Inc., that has been testing out an e-commerce option for its wholesale business at two stores in Hyderabad and Lucknow is encouraged by its experience and will now extend this to all its stores across India. Walmart India has a cash-and-carry business for its registered business members, largely small and mid-sized retailers. It is to these customers that it is offering an e-commerce option, where members can order their merchandise online and have it delivered at their doorstep. “The response has been very good (in the pilot in Lucknow and Hyderabad) and we are learning more about the members, what they need, and are fine-tuning the operations accordingly,” said Kris Iyer, president and chief executive officer, Walmart India, on the sidelines of the India Retail Forum in Mumbai. “We are rolling it (the e-commerce option) out in the remaining 18 stores by January.” Walmart India plans to launch 50 new stores in the next five years, which will also have the online option, said Iyer, who is now looking to create mobile applications that can serve the company’s customers better. The company exited its joint venture with Bharti Enterprises Ltd in October last year. That joint venture involved running a cash-and-carry business jointly and providing expertise and support to Bharti’s own front-end retail business.

International:

• Alibaba prices shares at $68: Shares in Alibaba have been priced at $68 (£42), the top end of the range, in a sign of strong investor appetite for the Chinese e-commerce giant. With trading starting on the New York Stock Exchange later on Friday, the share sale will raise $21.8bn, making it one of the largest flotations ever. It values Alibaba, which accounts for 80% of all online retail sales in China, at $167.6bn. That value surpasses such corporate titans as Walt Disney and Boeing. The final amount raised from the sale could change, depending on the final allotment allocation. If underwriters exercise an option to sell more shares, the money raised could increase to $25bn, beating the record listing held by Agricultural Bank of China. That flotation in 2010 raised $22bn. Alibaba operates a series of online marketplaces in China and elsewhere, handling more transactions than Amazon and eBay combined. The company was formed 15 years ago by former teacher Jack Ma, who wants to use some of the proceeds to expand in the US and other markets. Trading in Alibaba shares is expected to be frenetic in the early hours after the market opens. Many experts expect the share price to go higher once trading begins as institutions add Alibaba stock to their investment portfolios.

• Microsoft cuts another 2,100 jobs as it nears 18,000 target: Microsoft has confirmed another 2,100 redundancies as part of a plan to cut 18,000 jobs, some 14% of its workforce. The software giant said 747 jobs will go in the Seattle area, with the rest spread across its global operations. Microsoft had already cut 13,000 jobs, with the bulk at the Nokia phone division bought by the US company. In July, chief executive Satya Nadella announced radical plans to move Microsoft away from software to online services, apps and devices. Microsoft, which has about 127,000 people on its payroll, will take a charge of between $1.1bn (£672m) and $1.6bn for costs related to the cuts. Microsoft said in a statement that the latest cuts "are spread across many different business units, and many different countries".

• Home Depot admits 56 million cards hit by security breach: The hacking attack on retailer Home Depot may have affected 56 million credit and debit cards in Canada and the U.S., the company admitted Thursday. Criminals used unique, custom-built malware to steal numbers from Home Depot’s point-of-sale systems, it said. The do-it-yourself retailer has 180 stores in Canada and more than 2,200 in the U.S. The company said the previously unknown variety of malware may have been in its payment systems from April to September of this year. Home Depot said it has completed a security upgrade that should prevent any further breach of its systems. Terminals identified with the malware have been replaced and the malicious code has been eliminated from customer systems, it said. Canadian credit and debit cards have chip technology that should protect customers, it said. Home Depot said it has rolled out enhanced encryption of payment data to all its U.S. stores and plans to have the same safeguards in place in Canada by next year. Home Depot repeated its assurance that there is no evidence the cybercriminals gained access to customers' PINs.

• Fortune ranks Indra Nooyi 3rd most powerful women in business: PepsiCo's India-born CEO Indra Nooyi has been ranked third most powerful businesswoman by Fortune, the only Indian-origin woman on the 2014 list topped by IBM Chairman and CEO Ginni Rometty and General Motors CEO Mary Barra. Fortune said nearly half the women on 'The Most Powerful Women in Business 2014' list run huge companies, which is a record and "all are working hard to transform their businesses." Nooyi, 58, dropped from the second position she held last year to third.

• Lululemon's Dude Customers Will Finally Have a Store of Their Own: Men, get ready for (more) exercise clothes because Lululemon really thinks you need some. So much so, the company is opening an entire store just for their male clientele … because they have so many? According to Racked, the judgmental yoga pants company signed up for two new leases in Manhattan’s Soho neighborhood — one for the ladies and one for the dudes — at 125 and 127 Prince Street. So, you know, after getting your new iPhone at the Apple store down the street, you can go get those stretchy running tanks you’ve been needing, men. One question though: with Lululemon's continuing financial struggles, are dudes in just-loose-enough shorts supposed to save the company's bottom line?

• Mercedes-Benz sets up firewall to protect car data from hackers: Mercedes-Benz, the world’s third-biggest maker of luxury vehicles, is using a cloud-computing setup to protect data as cars’ mobile links and software expand and the industry prepares for driverless travel. Elements of the technology will include enabling people in a vehicle to control how much of their data is available to the outside world while they’re on the road, Christine Hohmann-Dennhardt, head of legal affairs at Mercedes parent Daimler AG, said on Thursday at a conference. Drivers will also have the option of erasing information automatically once they’ve left the auto. “If we say we’re making safe cars, that doesn’t just apply to the mechanical technology but to data security,” Hohmann- Dennhardt said at the event in Daimler’s hometown of Stuttgart, Germany. Protecting information will be key to gaining customer acceptance of comfort and safety products, she said. Technology for self-driving cars is forecast to become an $87 billion market by 2030, according to Boston-based Lux Research. That’s prompted auto makers and insurers to look at how to prevent hackers from gaining access to information or even hijacking vehicles by remote control. Mercedes tested a self-driving S-Class sedan on a 100km drive on public roads last year, and Daimler is also developing automated trucks. Computer-specialist contractors failed in a three-month attempt to hack into the S-Class’s systems, Ralf Lamberti, who runs Daimler’s user interaction and connected cars unit, said on Thursday.

• Kenneth Frieze Promoted to Gordon Brother CEO: Kenneth Frieze has been promoted to chief executive officer of Gordon Brothers Group, the restructuring, investment and consulting firm based in Boston. As ceo, he succeeds Michael Frieze, who has been part of the firm’s leadership since 1966 and continues as chairman and chief investment officer. He was instrumental in expanding the company from a retail liquidator into a provider of services including restructuring, consulting, brand redevelopment, appraisal and asset disposition. Michael Frieze is the father of Kenneth Frieze. Kenneth Frieze has been with the company since 2003, most recently as president. He relinquishes the presidency upon his promotion to ceo on Oct. 1. Michael Frieze noted that his son marks the fourth generation within the family to lead the company during its 111-year history. “Ken has diligently grasped the dynamics of our business over the past 20 years and is the natural successor.” Kenneth Frieze said, “Having spent the better part of my career at Gordon Brothers Group, I look forward to guiding the company’s ongoing expansion and working alongside some of the sharpest minds in the turnaround industry.” Kenneth Frieze worked at Bain & Co. and Deloitte CRG prior to joining the family business. Gary Talarico served as president and ceo of Gordon Brothers for about 18 months before leaving the firm last year.

• VF Sees Timberland Passing $3B in 2019: VF Corp. is ready to make a great leap forward with Timberland. VF on Wednesday unveiled plans to expand the footwear brand to $3.1 billion in sales by 2019, 82.4 percent above the $1.7 billion projected for the current year and more than twice the $1.5 billion registered in 2012, its first full year as a VF property following the acquisition of Timberland for $2 billion three years ago this month. VF last year had forecast Timberland sales of $2.3 billion in 2017, when VF expects to tally $17.3 billion in annual sales. As it builds revenues in the aftermath of a two-year transition, referred to on several occasions as a “reboot,” to modify merchandising and operations and get a better grasp of both the worldwide market for the brand and the consumers who gravitate toward its hybrid outdoor-industrial aesthetic, the company expects to lift its operating margin to about 18 percent of sales from just under 13 percent currently and modify its retail model toward one more focused on full-price rather than promotional selling. It plans to do this while staying true to Timberland’s traditions of rugged individualism and top-to-bottom sustainability and at the same time embracing VF’s dedication to both operating discipline and innovation. Timberland’s Stratham, N.H., headquarters will be the site of VF’s footwear innovation center. “We’re growing across all of our regions, across all of our categories, across all of our genders and also across all of our channels of distribution, which is probably the first time that’s ever happened to the brand,” Patrik Frisk, president of Timberland and of VF’s outdoor coalition in the Americas, told analysts at a presentation at Timberland headquarters.

Tech:

• Snapdeal Selling M&M's New Scorpio: E-commerce firm Snapdeal on Thursday started accepting pre-bookings for the new variant of Mahindra & Mahindra's SUV Scorpio, making it the first time automobile bookings have debuted on an e-tail site, report Ketan Thakkar & Radhika P Nair.

• Google Sets Rs 100 crore for Android One Campaign in India: Google has earmarked Rs 100 crore for advertising and marketing of Android One smart phones in India, two senior officials of the Internet giant and its media agency Maxus said. It launched a high-decibel advertising campaign with tagline `Apni kismet, apna haath', created by Ogilvy & Mather, across different media platforms on September 15. While the spokesperson of Maxus declined to comment, a top official of the agency said the Android One campaign will be rolled out in several phases. “The primary mandate is to get the traction in urban areas and then go deeper,“ the person said. On September 16, Google did a roadblock for 24 hours on Zee Television network channels. “The duration of a show is usually 23-24 min, which we extended to 27 min. We used the balance time to get into one exclusive ad break for Android One every half an hour,“ said the Maxus official.

• Twitter for iPhone gets a redesigned profile with expanded features for iOS 8: Twitter for iPhone got a revamp today with a new profile look that features lots of white space, expanded bio views and extra features for iOS 8. To access tweets, photos and favorites, users can select from the navigational tab which now remains at the top so no scrolling or swiping is necessary. The app has also been optimized for iOS 8, which lets you interact directly with push notifications from Twitter. Users no longer have to launch the app to retweet, favorite or follow tweets. The new Twitter profile launches today for iOS 7 and higher.

• Food delivery apps in India boom as consumers seek local delights: Spurring a host of online food delivery platforms that offer app users deals and discounts and promote locally-known restaurants by forming partnerships with them, the quick service restaurant (QSR) has made a quick meal only a click away, thanks to the growing number of smartphone users. It's a relationship that serves both the restaurants and their customers well. "Food is a big space and, while the QSR space turns too competitive, the focus will be on investing in adjacent spaces such as food delivery and ordering platforms," says Rehan Yar Khan, a partner in Orios Venture Partners, which raised Rs 300 crore for its maiden fund earlier this year. He added the technology-focused fund will look at an investment in the food space. "In the food and grocery delivery business, which are scattered, it is a matter of time before the hyper-local strategy and online aggregators become popular, especially on the smartphone. A good investment would help them take the concept pan-India," he said. A Crisil report, Fast Food on the Fast Lane, states that the QSR segment will grow into a Rs 7,000-crore-industry by 2015-16.

• Citibank sending its customers an introduction to iPhone 6, Apple Pay: Citibank notes that 200,000 stores "and counting" will offer "quick and easy payments" via Apple Pay using customer's existing credit or debit card accounts, with no need to apply for a special account. The bank also states that when using Apple Pay, "you still get all the great features your Citi Card provides." Citibank says it has "200 million customer accounts" globally, although Apple Pay will initially only work on its "Citi-branded consumer credit and debit cards (except for ATM and Chairman cards) issued in the continental U.S. and Hawaii." Apple's chief executive Tim Cook noted in his recent interview with Charlie Rose that Apple chose to work with existing banks and card processing networks because customers were generally happy with their existing accounts and wanted to retain their existing programs, including airline mileage plans and other cardholder features that banks currently offer. Citibank was announced as an early Apple Pay partner along with other top US banks including American Express, Bank of America, Capital One, Chase and Wells Fargo, as well as credit card networks Visa and MasterCard. Apple expects to activate U.S. point of sale Apple Pay transactions in October, with an additional set of banks slated to join afterward, including Barclay, Navy Federal Credit Union, PNC, USAA and US Bank.

• Formisimo, the ‘Google Analytics for Web forms’, goes real-time: Formisimo, the startup focused on telling you how effective the forms on your website are, has rolled out a new real-time feature in beta. The real-time data on offer tells you the number of users currently using your checkout or form, the number of recent checkout drop-outs, conversions in the last five minutes and which fields are currently seeing activity.