Daily News Digest- 24th Sep'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Inspired by Alibaba and its Indian Clones, Tatas to get into Ecomm: The Tata Group plans a bigbang entry into the Indian ecommerce space with the marketplace model that has been made immensely successful by Alibaba -which just made a record initial public offering in the US -and has also been emulated domestically by Flipkart, Amazon India and Snapdeal, according to two people familiar with Tata Group's plans. The initiative will be led by Tata Industries Ltd, a fully owned subsidiary of Tata Sons that shepherds the group's entry into new businesses, and not by its existing retail units, said one of the persons. “Tata Industries incubates new businesses as they have done with Tata's entry into auto components and telecom ventures,“ said the person, who didn't want to be named.“Then such businesses are taken forward by their respective units.“ A Tata Sons spokesperson said the group is eyeing the country's ecommerce business but did not elaborate on plans. “Suffice it to say that ecommerce is of interest to the Tata Group. We will share more information at the appropriate moment,“ the person said. To be sure, Tata already operates an ecommerce site for its consumer electronics business Croma, but the marketplace model will allow any vendor to sell on the platform, similar to what Amazon or Flipkart do in India. Ecommerce marketplaces make money by charging fee or commission from merchants using them. Tata is modeling its business on Tmall.com, the Alibaba Group's marketplace, said the second person cited above. This, along with twin B2C marketplace Taobao.com, generated about $248 billion in gross merchandise sales last year for the Chinese company , more than that of Amazon.com and eBay put together. The yet-to-be-named marketplace is planned to be rolled out next year and will initially showcase Tata's existing retail chain brands such as Westside, Croma and Star Bazaar.Tata is also working to rope in joint venture partner Zara, which otherwise sells online only through its own sites globally , to sell on the platform, the person added.

• Amazon India launches Release Day Delivery: Amazon.in today announced the launch of Release Day Delivery (RDD), a service committed to delivering new product offerings to customers on the day of their launch. With the launch of RDD, Amazon.in customers can now pre- order and receive some of the most eagerly awaited new products at their doorstep on the day of release, the company said. The service is launched with the release of Xbox One. This means hundreds of customers who had pre booked the Xbox One in 35+ cities have started receiving their deliveries today, it added.

• With rise of e-commerce, coupon sites such as Coupon Dunia and Groupon see revenue rising around 500%: The fierce rivalry among ecommerce sites to snag new customers through massive discounts has expectedly led to burgeoning sales at couponing sites that enable users get products and services online at a steal. With the rise of e-commerce, deal buying and couponing sites, such as Coupon Dunia, Groupon and several others, have seen revenue rise as much as 500%, most of it attributed to the bigger players Flipkart, Amazon India and Snapdeal. In a couponing website, a customer can search for a particular discount voucher and use that code to get a discount or cashback on an etailer's website. "I see couponing as a less exploited marketing tool as of now. Going ahead, as ecommerce grows, we will see more and more success for these sites," said Arvind Singhal, chairman of retail advisory firm Technopak. A majority of transactions for these portals still come from the bigger ecommerce sites like Flipkart, Amazon India, Jabong, Fashionara and MakeMyTrip, among others.

• Starbucks to Halve Size of New Outlets in Smaller Cities: Starbucks' new stores in India will be less than half the average size of its existing cafes as the world's largest coffee chain plans to expand into Indian towns and city suburbs while maintaining its profitability. Tata Starbucks, a 50-50 joint venture between US cafe chain Starbucks Coffee Company and Tata Global Beverages, will open outlets of 1,000-1,200 sq ft compared to its existing cafes that measures over 2,500 sq ft on an average, said an official who requested not to be named. “Footfalls in smaller towns and suburbs may not be as high as prime locations and we have to maintain profitability too by keeping rentals in check,“ the person said. 

• The Mars Milestone - India Takes a Giant Interplanetary Leap Ahead of China: The longest journey India has ever undertaken is reaching its destination Mars. After 300 days, 690 kilometres, the country's Mars Orbiter Mission (MOM) is within striking distance of making big global history. On the morning of September 24, the Indian space programme makes its much-awaited tryst with the Earth's red neighbour, Mars, with a spacecraft the size of a Tata Nano car, and lovingly called Mangalyaan or Mars Craft. (Full Coverage of India's Mars Orbitor Mission). The 1350-kilogram unmanned robotic satellite is first slowed down in a tricky manoeuver so that it gets caught in the orbit of Mars - a wee bit slower and it would crash land on the surface of Mars, a wee bit fast and it would miss the Red Planet to be lost in outer space forever. The success rate of such a complex mission is less than 50 per cent and even America and Russia did not succeed in their maiden attempts. Indian Space Research Organisation (ISRO) chairman K Radhakrishnan explains "India will become the first Asian country to have achieved this and if it happens in the maiden attempt itself, India could become the first country in the world to have reached distant Mars on its own steam in the first attempt."

• Modi to meet CEOs of Fortune 500 companies like Google, Boeing, IBM, during US visit: Prime Minister Narendra Modi will meet CEOs of top Fortune 500 companies like Google, Boeing, IBM, Goldman Sachs, MasterCard and Pepsi during his visit to the US later this week. The CEOs of Carlyle Group, Cargill Group, Citigroup, Merck, Caterpillar, Warburg Pincus, Mastercard and Hospira will also meet PM Modi, a report said on Tuesday citing the Ministry of External Affairs. Of the 17 heads of large global corporations who are planning to meet Modi, six have a one-on-one appointment, said the report. Some of the key focus areas of the Modi-led government are export-oriented manufacturing, heavy infrastructure building and urbanisation. The idea behind is to push manufacturing growth to 10 per cent annually. To achieve this objective, the country needs major investments both in terms of funds and other resources, and the government's focus is now on global corporates that are willing to set up factories here.

• AirAsia offers 1.5 million promotional seats, starting at Rs690: Malaysian no-frills airline AirAsia said on Tuesday it has put on sale 1.5 million promotional seats for fares as low as Rs.690 for one way journey under a limited period offer. The airline’s Indian subsidiary AirAsia India on Tuesday rolled out a discounted ticket scheme, offering flyers an all inclusive one-way ticket price of Rs.690 from its hub Bangalore to Chennai, Kochi, Goa and Rs.2,390 from Bangalore to Jaipur and Chandigarh. This offer is also available on AirAsia Berhad and Thai AirAsia flights. All inclusive fare is available from as low as Rs.4,999 from Chennai, Kochi, Kolkata, Tiruchirappalli, Bangalore to Kuala Lumpur and Rs.4,500 from Chennai to Bangkok, AirAsia said in a release here. The bookings for these offers have already commenced from Monday and can be made till 5 October, the airline said. The travel period under the offer, however, will be from 15 January 2015 to 30 June 2015, it said.

• Birla, Varkey eye Educomp schools: One of the richest Indians in the Gulf, Sunny Varkey , is eyeing K-12 schools of Educomp Solutions as the Dubai-based billionaire looks to expand his education business empire in the country .The 57-year-old Varkey , who heads Gems Education, the world's biggest privately held schools operator, may be vying with Mumbai-based billionaire Kumar Mangalam Birla for the potential acquisition, which is still in early stages, said a source directly briefed on the matter. Educomp may attract about $250 million valuation for its network of more than 50 schools. Gems, Birla and a third foreign bidder have made nonbinding offers valuing the K-12 subsidiary at a valuation lower than the asking price. Educomp chairman and managing director Shantanu Prakash is holding talks with the lenders before taking a final call on the valuation expectation. The debt-laden Educomp, with beaten down stock price, carries $150 million debt in the books of the K-12 subsidi ary. Educomp holds 86% stake in K-12 unit, while Prakash retains the rest in his personal capacity. Bidders could acquire the entire stake of the parent and retain Prakash as a minority investor for sometime at least. Media mogul Subhash Chandra’s Zee Group was another suitor considering an offer though there was no certainty of it coming, sources added.

• E-sales of global adventure gear rise: Why take the effort and go outdoors when you can just buy the gear and look like you did? Thanks to online retail, top global adventure gear brands are making a beeline for India as it becomes fashionable for young Indians to flaunt an active lifestyle. From cellphone covers designed to survive doomsday to stylish jackets that feel at home in a club or on Mount Everest, it's a far cry from the days when outdoor enthusiasts were left scrounging for good options. “Everyone would ask their relatives going abroad to bring back quality stuff, whether it's hiking shoes, a pen knife or a flashlight. It's a different scenario now. You get everything here,“ says Mohit Oberoi, owner of New Delhi-based outdoor gear store Adventure 18. “We have great jackets and fleeces from Rab. The best of rucksacks from Lowe Alpine -you don't feel them when you wear them.“ Gaurav Gupta, senior director with Deloitte in India, says, “Without the boom in ecommerce, these niche brands would have found it tough to reach their target consumers here. Availability is everything. They don't need to invest in setting up stores anymore. They can gauge demand easily and import their stocks only when required.“ For instance, when it comes to trekking or hiking shoes, people have more op tions than just Woodland, a name that has been synonymous in India with outdoor shoes for more than a decade.International outdoor brands such as, Salomon, Merrell and Keen, known for their technical expertise in making footwear for extreme sports, are wooing the evolved Indian shopper through popular online retail websites. Think sneaker-like trekking shoes with thinner soles and comfortable uppers constructed from materials like Gore-Tex that is both breathable and waterproof. “People are waking up to the fact that you can look stylish and outdoorsy at the same time,“ says Oberoi. And it's not just shoes. Otterbox, a US-based company that arguably makes the best protective cases for phones and tablets, is available on Amazon India and Flipkart at a price. A basic Otterbox MotoG case will cost you around Rs 3,000. Fenix and Nitecore, two flashlight brands whose lights can cost up to Rs 50,000 are retailed on E-bay India.Leatherman and Gerber, brands known for knives and multi-tools, that are standard issue items for the US Special Forces, are replacing Victorinox (popular Swiss knife) as the penknives of choice.

• Former Nokia India head to join Vodafone: Former Nokia India head P Balaji will be joining country's second largest telecom firm Vodafone India as its regulatory and external affairs director next month. “Our new director -Regulatory and External Affairs will be P Balaji. He joins us from Nokia India, where he was the managing director till recently ,“ Vodafone said in a statement.

• Food Giants Vow Not to Target Kids in Ads, Promotions: Top food and beverages firms, including Mondelez and McDonald's, have committed to stop advertising and promotional activities targeted at children below 12 years across platforms as part of a new global pledge to step up responsible marketing. While these multinationals including Unilever, Nestle, Mondelez, McDonald's, Coca-Cola, PepsiCo, Kellogg, Mars and Ferrero already had a mandate on responsible advertising, it was largely restricted to mass advertising on television and print. Now they have extended restrictions on advertising to children to cover outdoor ads, radio, cinema, direct marketing, mobile and SMS marketing, interactive games, DVDCD-ROM and product placement. So far, there were no restrictions on below-theline advertising aimed at children through promotions, tie-ups with cartoon characters or joint promotions at events targeting children. “We have now conveyed the new guidelines to our ad agencies and legal teams,“ said the CEO of one of the firms that made the commitment under the International Food & Beverage Alliance (IFBA). The firms have sent a commitment to the WHO to comply with the new norms by 2016.

• Arvind's E-tail Arm Plans New Portal, Eyes Acquisitions: Arvind Internet, the fledgling e-commerce arm of textile and apparel group Arvind, is looking for a wide variety of acquisition targets and has already initiated talks with a few companies. The over eight-decade-old company made its foray into the fast-growing Indian ecommerce industry in August through Creyate, a custom-clothing website which is attracting about 50 orders a day. Arvind Internet plans to launch its next online property, a multi-brand apparel and accessories site around June next year. The e-commerce arm is scoping out a wide variety of companies, said Kulin Lalbhai, 28 -the second son of Arvind chairman Sanjay Lalbhai -who is executive director at the group and heads its online retail initiative. “We will not acquire to gain scale, but for talent, for product, for market learning and information,“ he said, adding, “It will be surgical; we will not buy a white elephant.“

• Despite its difficulties, India a valuable market for Vodafone: It will be difficult for Vodafone’s global chief executive Vittorio Colao, making his first official visit to India since a new central government took charge earlier this year, to miss the country’s significance in the British telecom major’s international operations. According to publicly available data, 38 per cent of Vodafone’s 434- million subscriber base is in India, and the country accounted for £ 4.4 billion (over 10 per cent) of its global turnover in 2013- 14. Marten Pieters, the India CEO of Vodafone, which is embroiled in a ₹ 20,000- crore tax dispute here, recently raised concerns over difficulties in doing business in the country. But India’s contribution to Vodafone’s global revenue is more than that of either Italy (£ 4.3 billion) or Spain ( £ 3.5 billion), and only a little less than the company’s turnover from its Africa operations through Vodacom ( £ 4.7 billion). Also, 18 per cent of the company’s staff operates out of India — the most in a country and more than even the UK headquarters’ strength of 16 per cent of all employees.

• India to be Toshiba’s design and manufacturing hub for lighting business: CEO Yoichi Lbi: Japan's Toshiba group will make India the design, manufacturing and export hub for its lighting business, and multiply the local headcount to design lights for planned smart cities airports, stadiums, highways, warehouses and factories, CEO Yoichi Lbi said. The Japanese giant entered the Indian market two years ago through its $2-billion group company Toshiba Lighting & Technology Corporation by acquiring US-based GreenStar that was operating designing and manufacturing facilities in India. Toshiba will expand these facilities that is designing and manufacturing close to 8,000 units of outdoor lights for US market. "India has a great talent pool for software designing and we would like to be here as demand for smart lighting will be on rise," Toshiba Lighting & Technology Corporation President & CEO Yoichi Lbi told ET.

• Amazon limits delivery of goods above Rs 5,000 in UP: If you live in Noida or Ghaziabad, forget ordering your favourite gizmo from Amazon this festive season, because the e-commerce major won't deliver anything worth more than Rs 5,000 to any address with a UP postal code. In a move that speaks volumes about the trustworthiness of the UP market, Amazon has gone the way of rival Flipkart in putting a low price threshold to UP-based postal codes. When TOI quizzed Amazon on the reason for this decision, the spokesperson declined to comment. However, insiders associated with Amazon's delivery chain said the decision was taken due to buyer-end malpractices the company has faced. TOI confirmed that delivery has been disabled for all UP postal codes on the e-commerce site for orders over Rs 5,000. "We've had many instances of items ordered from fake addresses. It affects everyone in the supply chain, because a lot of money and time is invested in catering to such orders. Just-for-fun orders are hurting e-commerce," said a courier operator which handles orders from various e-commerce portals, including Amazon, Flipkart and Snapdeal.

International:

• Shoe maker Jimmy Choo to step out on London market: Jimmy Choo set out plans on Tuesday to join the London Stock Exchange next month in a deal that could value the upmarket shoe maker at more than 700 million pounds ($1.2 billion), seeking to woo investors with the prospect of expansion in Asia. Its owner JAB Luxury, the investment arm of the billionaire German Reimann family, plans to sell at least 25 percent of the company in the listing. Jimmy Choo will market itself as a chance to gain exposure to the upper end of the shoe market, one of the fastest growing areas in the luxury goods industry. Its flotation, however, comes at a challenging moment, with slowing growth in the industry overall and investor worries about conflicts in Ukraine and the Middle East which could affect future sales and expansion plans.

• Starbucks to take control of Japanese unit: US coffee chain Starbucks is buying out its Japanese partner in a deal worth $914m (£559m). Starbucks Japan has been a joint venture between Starbucks and Sazaby League since 1995. Under the deal Starbucks will buy the 60.5% stake of the Japanese unit that it does not own. It hopes to complete the deal by the end of the year. Japan is Starbucks' second biggest market in terms of sales and has some of its most profitable cafes.

• Roberto Simon Named Revlon CFO: Roberto Simon has been named executive vice president and chief financial officer of Revlon Inc., effective Sept. 30. As executive vice president and cfo, he succeeds Lawrence Alletto, who had served in the additional capacity of chief administrative officer since joining the company in October. Simon had served as senior vice president of global finance since joining Revlon in October as part of its acquisition of The Colomer Group for about $665 million in cash. During the past seven months, he had been Revlon’s global business process owner for systems, applications and products. He worked in a number of different financial positions for Colomer prior to the acquisition and became its cfo in 2011. In a regulatory filing with the Securities and Exchange Commission, Revlon said that Alletto intended to “pursue other opportunities” and that his departure wasn’t caused by any issues involving the company’s accounting, financial reporting or internal controls.

• MMG Advisors Celebrate 25 Years: MMG Advisors, formerly known as Marketing Management Group, celebrated its 25th anniversary last week at the New York Yacht Club here, a fitting location for cofounder and senior managing director Allan Ellinger, an avid boater. Ellinger, along with his partners Andy Postal and Howard Feller, welcomed some 275 industry executives to the celebration, among them: Abbey Doneger, Haim Dabah, Les Berglass, Paul Rosengard, Ken Sitomer and Jason Rabin. MMG’s business focuses on turnaround and restructuring work, as well as mergers and acquisitions.

• Etro Names Francesco Giannaccari as General Manager: Etro has tapped Francesco Giannaccari as the company’s new general manager. The role was previously held by Ippolito Etro, who exited his family’s company last March. His father Gimmo Etro, president of the firm, took on the position on an interim basis with the support of Jacopo Etro, the brand’s global communication vice president. “We chose Francesco Giannaccari because over the years he matured an incredible experience in the luxury business and it emerged he is very in sync with the company and our plans for the future,” Jacopo Etro told WWD. “And I also think that due to his experience he has technical skills that we don’t have in our family.”

Tech:

• Jolla seeks local partners for Sailfish OS in India: Finnish firm Jolla, founded by former Nokia employees, is looking for Indian partners to develop smartphones powered by its Sailfish operating system. The company, which has launched its maiden handset on Tuesday in the Indian market with eCommerce major Snapdeal for Rs16,499, said its OS offers users a differentiated user experience compared to Android and other operating systems. The handset has been launched globally in Europe and Hong Kong. “We are looking for local players for using Sailfish OS. Android is dominant in the market but we feel users should have a choice. We would want to expand the market for Sailfish OS,” Jolla co-founder and chief operating officer Marc Dillon told PTI. Google’s Android OS is the most popular OS globally, including India. Handset makers like Samsung, LG and Sony as well as domestic firms like Micromax and Intex offer slew of handsets across price points starting as low as Rs1,999.

• Rocket Internet prices shares at market capitalisation of €6.2bn: Rocket Internet, the German start-up conglomerate, has priced shares for its initial public offering at a midpoint market capitalisation of €6.2bn, in what is set to be the largest flotation for a European technology company in years. The company said on Tuesday it would sell shares for between €35.50 and €42.50. Founded by brothers Oliver, Marc and Alexander Samwer in 2007, Rocket is a hybrid venture capital group and incubator that claims to have industrialised the process of building start-ups. The brothers are set to become billionaires, holding a 52.3 per cent stake that is set to be valued at €3.2bn. Detractors have described Rocket as a “clone factory”, but the Berlin-based company makes no secret of adapting successful business models to Europe and emerging markets, focusing on three sectors: ecommerce, online marketplaces and financial services. The company expects to raise €1.477bn from the offer at the midpoint of the range, assuming the maximum number of shares is placed.

• Microsoft Xbox One set to launch in China on September 29: Microsoft Corp's Xbox One videogame console will launch in China on September 29, the US software giant said on Tuesday, following its announcement last week of a delay from the original launch date of September 23. Microsoft gave no reason for the delay, which is the first console to launch since a 14-year-old ban on sales of foreign games consoles was lifted this year.

• Microsoft Launches Online Services Bug Bounty Program: Microsoft today launched the Microsoft Online Services Bug Bounty Program, offering security researchers rewards for submitted vulnerabilities. The program encompasses the various Online Services provided by Microsoft, and bounties for qualified submissions start at a minimum payment of $500, with more offered depending on the impact of the vulnerability. Eligible submissions include vulnerabilities of the following types: Cross Site Scripting (XSS), Cross Site Request Forgery (CSRF), unauthorized cross-tenant data tampering or access (for multi-tenant services), insecure direct object references, injection flaws, authentication flaws, server-side code execution, privilege escalation and significant security misconfiguration. That being said, as with any such program, bounties are paid at the discretion of the company.

• PayPal Partners with Bitcoin Firms BitPay, Coinbase, GoCoin: PayPal today announced partnerships with three leading Bitcoin payment processors: BitPay, Coinbase and GoCoin. The eBay-owned company wants to help digital goods merchants accept Bitcoin payments, although it is starting with those located in the US and Canada first (“We are considering expanding to other markets,” a PayPal spokesperson told TNW. “Stay tuned.”). PayPal says it chose to integrate the third-party functionality directly in the PayPal Payments Hub because the aformentioned trio already offers its customers protections when dealing with the virtual currency. The company envisions anything that can be obtained digitally, such as video games and music, being sold in Bitcoin. This is important to emphasize, because PayPal isn’t adding Bitcoin as a currency to its own digital wallet. It also won’t be processing Bitcoing payments on its secure payments platform: everything is being handled by one of the three third-parties. Merchants who pre-sell products, meaning asking for money up-front for a product or service that will be delivered in the future, will also not be supported. This is, according to PayPal, to safeguard customers from businesses that can’t give refunds if they fold before the product is shipped and after buyer protection expires.