Daily News Digest- 22nd Sep'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• After FB & Google, Yahoo buys B'lore co: After Facebook and Google acquired Little Eye Labs and Impermium respectively, here comes yet another acquisition of an Indian startup by a global technology major, underlining the growing innovativeness of the country’s startup ecosystem. Yahoo has bought Bangalore-based Bookpad, a startup that’s barely a year old and founded by three youngsters who passed out of IIT-Guwahati over the past three years. The precise value of the deal could not be ascertained, but sources said it’s a little under $15 million (Rs 90 crore). Bookpad’s enterprise software product, DocsPad, allows users to view any document (like PDF, Word, Powerpoint), as also edit and annotate it, within a website or app. It works across devices, and does not require downloading of plug-ins or desktop software. For Yahoo, a content provider, the technology can potentially be embedded in many of its services. IT industry body Nasscom’s 10,000 Startups programme had identified Bookpad as a promising idea and the venture was incubated at the Startup Warehouse established by Nasscom and the Karnataka government in Bangalore. It was later part of the Microsoft Accelerator programme in the city. Rajan Anandan, Google India MD and who has been a key figure in the Nasscom 10,000 Startups programme, said Bookpad is a very focused product that has got good traction with virtually no money raised.

• Will Any Alibaba here have a Khulja Sim-Sim Moment?: When an online commerce company set up by a former English teacher in China makes a stunning debut on the US bourses, questions are bound to arise as to whether an Indian player can replicate the success. While success in entrepreneurship is largely due to individual brilliance -as is evident from Alibaba's and its founder Jack Ma's spectacular IPO last week -other factors, including investment climate and government regulations, do play a key part. Hangzhou, China-based Alibaba's shares soared almost 40% in its first day of trading on New York Stock Exchange as investors fought over a piece of what is expected to be the largest IPO in history . While India ticks all the right boxes when it comes to demand and potential for growth, the jury is out if an Indian ecommerce player would be able to do what Alibaba did within the next few years. Industry pundits point out that India's ecommerce sector is at a stage where China was in 2007, but a combination of factors -such as low Internet penetration, supply chain and logistics hurdles and an archaic regulatory regime -act as barriers. “One cannot have this scale if you don't think of going global. I don't see any company in India working toward that right now,“ said Rachna Nath, leader of retail and consumer at PricewaterhouseCoopers India. “That is the need of the hour.“

• Bakshi Wants Rs 2,500 cr for his 50% in McD’s JV: McDonald’s estranged joint venture partner Vikram Bakshi has offered to sell his 50% equity in the joint venture firm Connaught Plaza Restaurants, back to the US burger and fries chain for Rs 2,500 crore and put an end to their legal tussle, two people aware of the developments said. “The valuation of .Rs 2,500 crore is marketrelated. Bakshi wants to use the stock market value of Westlife Development, which runs McDonald’s outlets in the west and south through its subsidiary Hardcastle Restaurants, as a benchmark if he were to finally exit the joint venture,” one of them said. “The valuation of Westlife is around Rs 5,000 crore, so 50% of CPRL (Connaught Plaza Restaurants) would be Rs 2,500 crore, given that the businesses are largely the same.” This person said that even if McDonald doesn’t agree to pay Rs 2,500 crore, discussions may lead to an amount that could be 20% lower. CPRL operates McDonald’s outlets in north and east India. The other official said Bakshi has informally communicated the valuation to McDonald's. The offer to exit was also communicated during the ongoing Company Law Board proceedings between the two, where Bakshi alleged that the US major did not treat him equally while giving preferential treatment to its other partner in India Westlife. The court has given McDonald's time till October 27 to revert on Bakshi’s offer.

• Use of multiple fragrances drives deo sales: Usage of different fragrances by consumers for every occasion appears to be driving growth and penetration in the Rs 2,300-crore deodorant market in India. This has enabled multiple brand product entry into heavy-user households. Around 10% of deodorant consumers today are said to be the heavy users who buy multiple brands or multiple variants of a single brand for different occasions. These consumers are said to be segregating their usage of deodorants, depending on whether the fragrance is apt for a usual day at office or an evening dinner or an informal meet. The trend is unique to deodorants because in other mainline FMCG categories, brand loyalty is high and consumers generally buy a single brand, whether it is a deter gent or a toothpaste. In deodorants, consumers are floating within a repertoire of brands, leading to the category clocking 20-25% annual growth, with some segments within the category growing at 3035%. On the other hand, the FMCG market as a whole is growing at an average of 9%. 

• `Sip Less, Hip Tech' is Maruti's Hybrid Mantra for New Range: Maruti Suzuki is working on a low-cost hybrid technology to make its cheap-to-own cars even more frugal. Maruti is aiming to make hybrids affordable and wants to offer the technology on cars right from the Alto, the cheapest in its product portfolio, to the Swift premium hatchback over the next three to four years, said people with knowledge of the carmaker’s plans. In the process, it is taking the ‘Kitna Deti Hai’ (how many miles does it give) slogan to the next level. These people said Maruti’s hybrid solution could deliver 20-30% more fuel economy. “It is no more a concept. The real work is under way and the hybrid technology development is at an advanced stage,” said one of the people. “A large part of the development is happening in Japan and key inputs from Indian R&D engineers are also being absorbed. The idea is to offer a technology to the mass with not a major price difference over existing petrol cars.” Hybrid vehicles usually have a non-conventional propulsion system, such as an electric motor, in addition to the engine that runs on conventional fuel. They also often include mechanisms to capture energy, such as while braking, to recharge the battery. While hybrid vehicles offer better fuel efficiency and are more environment friendly, heftier price compared with those running on conventional fuels has been the biggest hurdle for their wider adoption globally. Maruti chairman RC Bhargava told ET in a recent interaction that Suzuki, the Japanese parent of India’s No. 1 car maker by sales, has already started working on the hybrids. Maruti has communicated the need for a suitable hybrid car for India as well, he said. “We need a hybrid system suitable for small cars which is low cost. The systems available today are expensive. I do think the development of low-cost hybrid is necessary, quite like the AMT we came out with,” Bhargava said.

• Xbox Goes Local with Bollywood Hits, EMI Offer: Microsoft is planning to go Indian big time, offering Bollywood movies and music on its latest Xbox One platform as well as EMI schemes to aggressively market the gaming console, which will be launched on an `online exclusive' model in the country this week. While equated monthly installments (EMI) would be a global first along with online-only sales model for the software major, providing content such as local movies and music is a model Microsoft intends to replicate from developed markets. The company will tie up with local content aggregators to provide Bollywood movies and music, said Chakrapani Gollapali, country general manager for consumer channels group at Microsoft India. It will follow the ‘freemium’ model where some content will be free of charge but consumers will have to pay for proprietary features, functionality or virtual goods. On the EMI scheme, Gollapali said that at the ₹ 25,000-30,000 price point mark in India, a sizeable section of customers wants financing to be made available. Microsoft is launching the Xbox One in India only on Amazon, pre-orders for which began in mid-August, taking a cue from companies such as USbased Motorola and China’s Xiaomi, which sell their smartphones exclusively through websites. 

• Indian Tourists Now Prefer to Take Road Less Travelled: Karlovy Vary, a small spa town situated in the Czech Republic; Lourdes in southern France with a population of about 15,000 that welcomes 5 million tourists and pilgrims from around the world every season; Reunion Island, a French territory in the Indian Ocean where one can see whales giving birth, and Minaret Station, a luxury tented lodge in a glacial valley in the Southern Alps of New Zealand. What’s with these places, not usually found on the tourist pop charts? Well, they’ve caught the eye of Indian travellers. For the country’s evolving holiday makers, overseas travel is shifting away from whirlwind, multi-city tours to experiential, mono-destination vacations. A young, Mumbai-based couple wanted to spend their anniversary in a place disconnected from the rest of the world. They chose Minaret Station in New Zealand, which can be reached only by helicopter. One night at the tented resort can set you back by 2,000 New Zealand dollars. Another young couple wanted a break and decided to go to a place that lets them arrive in style. The couple chose Zighy Bay, situated by a secluded fishing village in Oman, with mountains on one side and a beach on the other. Visitors can paraglide down the Zighy Mountain to reach their resort, perhaps the only one that allows such a check-in. A couple and their child travelled to Norway and went through the usual, run-of-the-mill itinerary, but they wanted to do something special for the little one. The three boarded a bus and embarked on an eight-hour journey to Santa Claus Village, an amusement park near Rovaniemi in Finland. Other relatively unexplored destinations such as Baden-Baden in Germany and Hokkaido in Japan are now finding a place on the Indian traveller’s itinerary.

• Sequoia, Others Rs 100 cr Invest in NewsHunt Owner Verse: Verse Innovation, the owner of local-language mobile platform NewsHunt, has raised more than Rs. 100 crore in its second round of funding led by Sequoia Capital India. The financing, which sources indicate may have valued the seven-year-old startup at nearly $150 million (about . 900 crore), also saw participation from ` its existing investors Matrix Partners India and Omidyar Network. The company and the investors, however, declined to comment on valuation. The investment comes at a time when increasing proliferation of budget smartphones is boosting demand for regional language content, an opportunity both startups and venture capital investors are betting big on. “The era of the real Indian mobile Internet written and consumed in local language is just beginning,“ said Verse Innovation founder and chief executive Virendra Gupta. “Our vision is to create a made-for-India platform and work closely with publishers, developers, OEMs and other ecosystem partners to digitise, distribute and monetise the consumption of local language.“

International:

• GM recalls 220,000 cars over brake defect: General Motors has recalled more than 220,000 cars to correct a brake defect that could increase the risk of fire. GM says it is not aware of any deaths or injuries resulting from the defect. The recall affects GM's Cadillac XTS model from 2013 and 2014 and recent versions of the Chevrolet Impala. Most of the owners are in the US and Canada. It is the latest safety concern for GM, which is under investigation for taking more than a decade to identify a problem with ignition switches. That fault has been linked to 19 deaths and it forced the company to recall more than 15 million cars worldwide this year. In April GM's chief executive Mary Barra apologised for the fault when she appeared at a congressional hearing over the issue. "I cannot tell you why it took years for a safety defect to be announced... but I can tell you that we will find out," said Ms Barra in April, testifying before a US House of Representatives panel investigating the issue.

• Jimmy Choo Rumored to List on London Stock Exchange: Now that the Scots have voted to remain part of the United Kingdom — a decision that sent the pound soaring against the euro on Friday — businesses are eager to get on with growth, and no one more so than Jimmy Choo. Industry sources said it’s likely the footwear and accessories firm will in the coming days announce a decision to list about 25 percent of its shares on the London Stock Exchange, in a deal that values Choo at upward of 700 million pounds, or $1.14 billion. Part of the growth story the brand will be pitching to investors includes plans to roll out 10 to 15 stores a year, with an eye to at least tripling the brand’s portfolio of 100 directly-operated stores. Jimmy Choo has been notching high-double-digit growth over the past three years since Joh. A. Benckiser Holdings, which also owns Bally and Belstaff, acquired it in a deal valuing Jimmy Choo at 549 million pounds, or $889.4 million, in 2011.

• Business Leaders Express Relief Over Scottish Referendum: British business and industry leaders were breathing easier by breakfast time on Friday, following news that the Scottish people had voted to remain in the U.K., rather than unravel a union three centuries old. After the result of the much-anticipated referendum was revealed — 55 percent of voters opted for the status quo — the pound hit a two-year high against the euro, and a two-week one against the dollar. The Scottish “No” to independence pushed the pound up to 1.27 euros, and to $1.65 in Asian trading after the news broke at 6:08 am London time. At the close of trading in London on Friday, sterling was holding firm at 1.27 euros, but fell back to $1.63. The FTSE 100 was on the uptick in mid-morning, climbing 0.7 percent to 6,867.98. As Friday wore on, it lost some ground, closing up 0.3 percent to 6,837.92. The London-based Scottish designer Holly Fulton was one of many business people happy with the referendum’s outcome.

• Marie-Pierre Stark-Flora Joins Estée Lauder: As part of the effort to grow its already sizable skin-care business globally, the Estée Lauder brand has named Marie-Pierre Stark-Flora as senior vice president of global marketing. Stark-Flora replaces Charisse Ford in the role and will report to Jane Hertzmark Hudis, global brand president for the Estée Lauder brand. She begins work Oct. 6. Stark-Flora founded and was most recently the chief marketing officer of Iluminage, a skin-care device company created through a joint venture between Unilever and Syneron Medical. She has also served as vice president of global marketing development for Kiehl’s Since 1851, where she overhauled the brand’s product portfolio and launched more than 80 new products. She has also held senior marketing positions at L’Oréal on the Giorgio Armani, Ralph Lauren Beauty and Helena Rubinstein brands. In her role at Estée Lauder, Stark-Flora will be responsible for leading the brand’s global marketing strategy for luxury skin care, skin care, makeup and fragrance, as well as consumer engagement strategy including digital marketing and media planning.

• Inditex, H&M to Pay More for Clothes From Cambodia to Lift Wages: Fashion brands, including Europe’s biggest clothing retailer Inditex SA and Hennes & Mauritz AB, said they are willing to pay more for clothes made in Cambodia, backing a trade union campaign for higher wages. The chains are among eight clothing retailers that include Next Plc and Primark that have written to Deputy Prime Minister Keat Chhon and to the chairman of the Garment Manufacturers Association in Cambodia saying they are prepared to factor in higher wages in the price they pay for garments made in the country. “Our purchasing practices will enable the payment of a fair living wage and increased wages will be reflected” in our prices, the retailers said in the letter. Raised prices will also take into account “productivity and efficiency gains and the development of the skills of workers, carried out in cooperation with unions at workplace level,” the group said.

• Exemplaire Opens Flagship in Paris: “There comes a point in luxury where it’s better to have [one’s] own store before moving into shop-in-shop distribution, where one gets mixed together with other products,” said Jean-Victor Meyers, cofounder of Exemplaire. That’s why the upscale knitwear label for men is opening its first stand-alone unit today at 334 Rue Saint-Honoré, Paris’ luxury shopping street and, according to the young entrepreneur, “the perfect location” for the up-and-coming label. Meyers, who founded the company with his friend Louis Leboiteux in 2011, said the duo felt it needed to have a sales team dedicated exclusively to Exemplaire, providing a “memorable experience” for the customer, and raise brand awareness. “This flagship will help us expand the brand internationally,” he added, with Asia, the United Arab Emirates and possibly Russia next on his list.

Tech:

• Oculus closer to launch with new virtual reality headset: Oculus VR took another step on the road to releasing virtual reality technology to the public, showing a new prototype with higher-quality imagery and the promise to more fully immerse users in digital worlds. The company said it's developed a new prototype called Crescent Bay. The device, which Oculus said still isn't ready to be released to the wider public, has new display technology and integrated headphones. The device can also track a player as they turn in a complete circle. The move marks a critical step for Oculus, which Facebook agreed to purchase for $2 billion in March. The company is preparing for the eventual release of its "Rift" headset to the general public, expected sometime next year. "We're really sprinting toward the consumer version," Brendan Iribe, CEO of Oculus, said during his keynote speech at the Oculus developers conference here. The stakes are high. Other companies have announced competing devices, including Sony's PlayStation video game console division, which created a VR device called "Project Morpheus." Others, such as Google and Technical Illusions, are creating their own products, as are smaller companies creating headset units that work with smartphones and tablets. There are also prototypes in labs at other companies, which haven't yet been publicly announced. "There's a full-on race to establish the next platform," said Michael Abrash, Oculus's chief scientist.

• Now, Pay for Google Apps in Airtel Bill: Internet giant Google is in talks with Airtel to allow customers of the country’s largest mobile operator to pay for digital items such as e-books, paid apps and in-app purchases through their service provider. In a country where millions of smartphone users do not use credit cards, such a tie-up can significantly boost Google’s digital goods business, and app developers and content creators will end up earning more. Two people aware of the talks said Google and Airtel are currently trying to come to an agreement on revenue sharing. If they join hands, then Google can sell its apps and digital content to Airtel subscribers without having to collect banking details. Airtel has nearly 40 million data subscribers in India, of which 12.5 million are on 3G. At present, Indian mobile users can pay for their purchases can sell its apps and digital content to Airtel subscribers without having to collect banking details. Airtel has nearly 40 million data subscribers in India, of which 12.5 million are on 3G. At present, Indian mobile users can pay for their purchases from Google’s apps store Google Play through credit cards, debit cards or gift cards. 

• Sterlite Technologies Working on Google Fibre Project Clone: Telecom engineers and fibre specialists at Vedanta Group company Sterlite Technologies are finalising the `proof of concept' of a close variant of the `Google Fibre' project to transform the urban home broadband experience in India's top 20 cities and, in turn, boost high-speed internet penetration. But unlike the US search giant, which will directly take its ultrafast fibre-to-the-home (FTTH) drive across US cities, Sterlite will deliver super-fast fibre broadband connectivity at 20 to 50 Mbps speeds to urban homes through partner mobile operators. “We will shortly showcase our FTTH broadband technology blueprint to Bharti Airtel and Tata Teleservices to line up the first wave of partnerships,“ Sterlite Technologies CEO Anand Agarwal told ET.The company is initially looking to hook up a million homes by 2016 across Mumbai, Delhi, Pune, Ahmedabad, Bangalore and Chennai. “Sterlite's faster home broadband model has parallels with the Google Fibre project as the network and services to end consumers would be similar, but company roles will be different as we plan to work with telcos as catalyst-cumsystem integrators to create a panIndia urban broadband network, unlike Google, which will directly serve US consumers as an internet service provider,“ said Agarwal. Its plan to partner with telcos comes at a time when mobile operators are increasingly focusing on data revenues to fuel future growth.

• eBay security flaw has existed for months: A flaw that has exposed eBay customers to malicious websites has been affecting the site since at least February, the BBC has found. Earlier this week it was revealed how clicking on some listings automatically redirected users to the harmful sites. EBay removed several posts, but said it was an isolated incident. But the BBC has since found multiple listings, from multiple users, exploiting the same vulnerability. Furthermore, several readers contacted the BBC detailing complaints they had made to the site. In a statement, eBay said it had a dedicated team working on security, but that criminals "intentionally adapt their code and tactics to try to stay ahead of the most sophisticated security systems".

• Google and Apple to introduce default encryption: Google has announced that its next mobile operating system, Android L, will encrypt users' data by default. The measure will make it more difficult for private information to be hacked or handed to law enforcement agencies. On Thursday, Apple said that devices running its new iOS8 software would be encrypted by default, with even the company itself unable to gain access. Both firms have offered encryption for some time, but many users were unaware of its existence or had not enabled it. Earlier this week, Apple's boss Tim Cook posted an online message assuring users the company's philosophy was that a "great customer experience shouldn't come at the expense of your privacy".