Daily News Digest- 10th Oct'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• India's Potential Gets a `Like' from Zuckerberg: He may have built the world's biggest social network, but as a personality he looked anything but social. If anything, quite the opposite. Mark Zuckerberg, creator of Facebook, appeared every bit a shy , curly-haired geek when he, clad in a gray T-shirt and jeans, ambled up to the stage to talk PAGE 16 to a restless, most ly star-struck audience assembled to hear the 30year-old billionaire on his first ever business trip to India. A few slides into the presentation on his pet theme ­ Internet.org, an ambitious project aimed to bring internet access to the unconnected billions ­ the awkwardness ebbed. Over some 20 minutes or so Zuckerberg, a self-professed atheist, held forth with near religious zeal on his desire to bring the next five billion people on to the Internet.“Connectivity cannot be the privilege of the rich,“ he told the 500 or so people assembled in Delhi's Taj Palace hotel, many of them Facebook's top customers in India, a bunch of internet entrepreneurs and assorted media.It also helps that this vision aligns with his business, whose future growth in large parts depends on getting more and more people embrace the Internet.India is a crucial piece in achieving his internet for all mission, launched last August and is a joint initiative of Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung. And Zuckerberg (or Zuck as he is called by friends), unsurprisingly perhaps, was lavish in his praise about the country which he has visited only once before in 2010 to attend a friend’s (Dropbox founder Aditya Agrawal) wedding and when he was photographed in a sherwani dancing barefeet. “Culturally this is the country that is very forward leading in science, engineering and research that make the benefits of connectivity here very profound for all,” said Zuckerberg, who is worth around $34 billion and the third richest American in the technology industry. In India, he said, the impact will be even more profound “because you have some of the best engineers in the world and a vibrant technology industry”.

• Amazon may do a Jabong to Counter Flipkart's Myntra: Amazon is in preliminary talks to buy Jabong, part of the USbased online retailer's plan to bolster its presence in India by selling fashion products, four people aware of the discussions told ET. Jabong is one of the fashion portals that Amazon is interested in acquiring, and Jabong has other suitors, the sources said, cautioning that a deal is not imminent. A regulatory filing by Rocket Internet, which incubated Jabong, put the value of the fashion portal at 388 million euros, or $500 million (₹3,000 crore). A person with direct (.knowledge of negotiations said that Jabong is holding out for much more -at least $700 million. Amazon said it does “not comment on anything we may or may not do in the future“. Jabong did not reply to emailed questions. “After Myntra got acquired by Flipkart, Jabong is the ideal candidate,“ said a person who is working closely with Amazon on the negotiation. A big chunk of the $2 billion that Amazon founder Jeff Bezos has promised to invest in India is meant for acquisitions, this person said. Amazon is battling leader Flipkart for dominance in one of the world's fastest-growing markets for online retail, expected to reach Rs 50,000 crore by 2016 according to consultancy Crisil. Last month, Bezos told ET that the value of goods sold by Amazon India in a year had topped $1 billion and that fashion was one of the “exciting frontiers“ for the Seattlebased company.

• Flipkart in Damage-control Mode, Offers Sops to Win Customers Back: Flipkart is planning a slew of measures to win back customers and vendors who were left fuming after several glitches marred the online retailer's massive Big Billion Day sale on Monday. The Bangalore-based company will now offer gift coupons for customers who were unable to buy products at advertised prices and earmark specific dates beginning tomorrow for vendors to showcase wares on the marketplace. “We are sourcing additional stock in some categories or offering refunds,“ said Mukesh Bansal, board member of Flipkart. For instance, the company is arranging for additional stock of televisions that will be offered to customers at the discounted prices. “Importantly, we are putting in place processes to ensure this does not happen again.“ Bansal, who heads fashion at Flipkart, said the company is using the data they got on Monday to make stock forecasting more robust. It is also in talks with payment gateways to ensure that transaction failures are not repeated. These processes will soon be put to the test as the company is set to launch its second big sales on Friday. The sale will last until October 16. “We had over five times our usual sale on Monday.We could have sold more but they blocked orders,“ said a fashion merchant on Flipkart, who did not want to be named.

• Here's How You Can Learn from Flipkart's Octoberfest: Flipkart's Big Billion sale on October 6 left scores of shoppers disgruntled for various reasons. At the same time, there were lakhs of people who cashed in on some really sweet deals. Hits and misses aside, Flipkart's October Revolution offers several learnings for consumers, who want to be better prepared to take advantage of more such shopping bonanzas with Diwali coming up. Thousands of miffed customers discovered that their orders had not been executed. For every order that was placed, there were scores of unhappy consumers. There are too many people jostling for the same goods. According to Flipkart, it received a billion hits, while the number of people who actually managed to get their hands on items on offer was just 1.5 million. In other words, one in every 600 visitors to the site managed to shop. So, the advertised discount may not really be yours. You may be well prepared with all your payment details at hand, but you can never be sure you'll really get the stuff you want at the discounted price. Take the case of the Xiaomi phones launched a few weeks ago. They were gone in less than 3 seconds. When there are millions competing against you, the probability of you making a purchase is extremely low.

• Brands Want Celebs Who are Stars in the New World: Last month, a Bollywood A-lister actress lost out a . 3-crore-a-year endorsement deal for a multinational beauty brand to a relatively new actor.Reason: the latter was much more active on Twitter and Facebook and the brand wanted to reach out to social media audiences. And despite Hrithik Roshan's new release Bang Bang proving a super hit, consumer goods firm Emami, which signed Roshan for HE men's deodorants this summer, is looking for a new face for social media. “Hrithik has a huge mass connect on traditional media. But with different audience logging on to social media, we may rope in a new face only for social media,“ Emami director Harsh Agarwal said. With social media emerging as one of the most popular hangouts for Indians, brand endorsement deals in the country are getting hugely influenced by how active celebrities are on Twitter, Facebook, Instagram and blogs. “Celebrities who engage actively on the social media space are getting paid at least 25%30% higher than those who don't, even if the latter have huge mass connect,“ said Vinita Bangard, promoter of talent management firm Krossover Entertainment, which represents Priyanka Chopra and Shah Rukh Khan. “The socially active ones have a clear edge not only in terms of higher fees but also in getting more endorsement deals.“ Chopra, with over 7 million followers on Twitter, is a hot favourite, along with stars like Amitabh Bachchan, Shah Rukh Khan, Aamir Khan and Salman Khan who all have more than 8 million followers.

• App Avaamo Raises Rs 38 Cr in Seed Fund: An Indian American duo have built a Whatsapplike messaging app for enterprises that has attracted a $6.3 million (Rs 38 crore) seed round from investors in China and Silicon Valley . Avaamo, founded by former TIBCO executives Ram Menon and Sriram Chakravarthy , hopes to tap into India, China and other emerging markets and will use the funds to establish footprint in these regions. The company , barely six months old, is being backed by the likes of China's VC firm WI Harper, and Silicon Valleybased Rembrandt Ventures Partners, Streamlined Ventures, Eleven Two Capital and Ovo Fund. “Just like email was the communication hub of desktop era, messaging has become the communication hub of mobile era,“ he said. “And In dia is our largest market,” said CEO Menon, 45, who worked at TIBCO Software for over a decade.The messaging space is a hotly contested arena, especially in emerging markets. Even Google is said to be working on its own version of the app for India. Several outlets such as boutiques, saloons, bakeries and grocery shops in India have adopted WhatsApp as a tool to connect and establish a personal rapport with their customers. But when larger enterprises like banks use these apps, it’s a different ball game altogether.

• Apple world's most valuable brand: Report: Apple has emerged as the world’s most valuable brand — worth nearly $119 billion. The tech company increased its brand value by 21% and is followed by Google, valued at $107 billion. The search giant’s brand value rose 15%. According to the Interbrand Best Global Brands annual report, for the first time in the history of the index, two global brands — not just one — have each earned a brand value that exceeds $100 billion. Facebook has been the biggest riser in the chart at 29th spot with a brand value rise of 86% to $14.3 billion from $562 million a year before. For the first time in its history, Facebook reported that revenue from advertising on mobile phones exceeded half (53%) of its advertising revenue for the quarter. Facebook’s acquisitions of messaging service WhatsApp for $19 billion and Oculus VR for $2 billion signal a new strategy. Huawei has also made Best Global Brands history as the first Chinese company to appear on Interbrand’s ranking. With 65% of its revenue coming from outside of China -and its earnings contin uing to climb both domestically and across Europe, the Middle East and Africa — Huawei is quickly becoming one of the largest telecommunications equipment makers in the world. The company is currently the third largest smartphone manufacturer in the world — behind Samsung and Apple — and is ranked 94th in terms of most important brand in the world. The Chinese brand is one of the five new entrants to enter the Best Global Brands ranking this year, the others being DHL (81), Land Rover (91), FedEx (92) and Hugo Boss (97). Jez Frampton, Interbrand’s global CEO, said, “Apple and Google’s meteoric rise to more than $100 billion is truly a testament to the power of brand building”.

• Samsung India CFO Sunil Goel to quit: Samsung India on Thursday said its chief finance officer Sunil Goel has decided to leave the company after serving 17 years. Goel, one of the first few employees of Samsung in India has voluntarily decided to move, Samsung said in a statement. “Sunil Goel, Chief Finance Officer, Samsung, has voluntarily decided to move. One of the first few employees of Samsung India, Goel spent over 17 years with the company,” a company spokesperson said. Goel has witnessed rapid growth of the company in India, from a small set-up to the market leader in mobile phones and consumer electronics market, the company said. “During his tenure at Samsung, Goel was a key contributor to the company’s growth in India and passionately worked on various assignments and projects,” he said.

• Marks & Spencer eyes opening 80 stores by 2016 in India: Marks & Spencer Reliance India Pvt. Ltd plans to add 38 outlets to take the total number of stores in India to 80 by 2016, a top official of the British retailer said on Thursday. M&S on Thursday inaugurated an outlet at Jubilee Hills an upmarket area of the city. Venu Nair, managing director of Marks & Spencer Reliance India, also said two more outlets will be opened in Hyderabad by the end of December. “Currently, we have 42 outlets across India. We plant to take that number to 80 by 2016. M&S has also announced it will further open up two new stores in Hyderabad by December 2014,” Nair rold reporters. With the opening of three stores within the same fiscal year, Hyderabad will become one of the top priority markets in India, he added. “Our new store (in Hyderabad) is designed to delight and excite our customers and its a pleasure to bring our extensive range of exceptional quality, innovative clothing and beauty ranges to more customers across Hyderabad,” he added.

• Air India set to open Asia’s biggest MRO facility: The Make in India slogan to encourage local manufacturing and create jobs may still be on the drawing board, but state-owned Air India (AI) is already prepared with Asia’s largest repair in India facility for aircraft, two airline executives said. By the end of this month, the maintenance, repair and overhaul (MRO) facility in Nagpur built by Boeing Co. will be handed over to Air India, in a relief for domestic airlines which fly to West Asia or Singapore for the purpose. Boeing built the facility as part of its obligations while selling 68 aircraft to India in 2005. Built at an estimated $107 million, the facility is ready for transfer to Air India, albeit with a delay of three years. The facility, sprawling across 50 acres, can accommodate three widebody aircraft such as Boeing B777 or Airbus A380 model at a time.

International:

• Burberry Opens Renovated Flagship in Milan: The economy may not be flying in Italy, but international fashion brands still rank Milan and the country’s main tourist cities as top priorities as part of their retail strategies. To wit, Burberry on Wednesday celebrated the opening of its newly renovated and expanded flagship on Via Montenapoleone, which features the brand’s first beauty corner in Italy. Andrew Maag, chief executive officer of the EMEIA (Europe, the Middle East, India and Africa) region and the Americas, highlighted the relevance of Via Montenapoleone as “one of the world’s greatest luxury shopping streets.” Maag said the boutique “is the latest chapter in our long-standing relationship with Italy and demonstrates our commitment to the Italian market, creating the best experience of the Burberry brand for our Italian and global consumers alike.”

• Amazon to Open Manhattan Pop-up Store: Amazon clearly wants to be the King Kong of retail. The online operator will open a 14,000-square-foot pop-up store in time for the holidays at 7 West 34th Street, right across from the Empire State Building, according to sources. The location is close to Fifth Avenue while Herald Square is at the end of the block in the opposite direction, near Macy’s flagship. Amazon also might be hoping the store will give it some good public relations for a change in the wake of its controversial battle with book publisher Hachette and analysts’ increasing questions over when the Web site will become consistently profitable. Even as it dominates online retailing in America, Amazon continues to operate in the minority of the overall retail market. In the U.S., total retail sales will reach $4.73 trillion in 2014, up from $4.53 trillion in 2013. But e-commerce sales will represent only 6.5 percent of total retail sales this year, or $305.7 billion, while mobile commerce will total $58.07 billion, 1.2 percent of all retail sales, according to eMarketer.

• Ebola Seen as Potential Risk for Luxury: Given their dependence on travel flows, luxury goods could see a “short, sharp negative impact” from a widening Ebola crisis. So says a research note from Barclays, which argues that European players dependent on wholesale and hard luxury would be the most vulnerable, including Swatch, Richemont, Tod’s and Hugo Boss. During the SARS outbreak, a period also marred by the Iraq war and general weakness in Europe, stocks in Barclays’ luxury index declined 21 percent between November 2002 and March 2003, rebounding 47 percent by August 2003, also supported by the end of the Iraq conflict. Barclays noted that leather goods makers — especially retail-driven ones like Louis Vuitton, which has no wholesale business - showed more resilience than watch and jewelry players. 

• Intercos Cancels Plan for IPO: In a rapid turnaround, Intercos, the Italian cosmetics supplier, concluded its road show on Oct. 9 with a terse statement saying the company would not proceed with its listing on the Italian stock exchange, where the company was expected to make its debut on Oct. 15. Intercos’ board opted to withdraw the entire offering, which had comprised 48.4 million ordinary shares — 44.2 percent of its total post-offering capital — of which 18.3 million were to be newly issued. The remainder were to be offered through two firms, Dafe 3000 Srl and Dafe 5000 Srl, both controlled by Intercos founder and president Dario Ferrari. “In spite of the wide interest and appreciation shown by Italian and foreign investors during the road show” and the high number of shares requested, “the company felt that financial market conditions, which deteriorated rapidly over the last few days, do not allow it to obtain an evaluation that accurately reflects its intrinsic value and great potential,” read the statement.

• H&M, Zara Brand Values on Rise: While tech firms like Apple, Google, IBM and Microsoft dominated the top 10 of Interbrand’s list of 100 Best Global Brands for 2014, a number of fashion firms were also on the rise. Mass retailers Hennes & Mauritz and Zara saw their brand values rise at a faster rate than that of most luxury labels during the year, according to the report, issued Thursday. H&M’s brand value rose 16 percent to $21.08 billion in 2014, from 2013, ranking the Swedish fashion retailer at 21 on Interbrand’s list, while Zara’s rose 12 percent to $12.13 billion, ranking the Inditex-owned brand at 36. Both brands held the same position in the ranking as they did in 2013. Interbrand pointed to H&M’s growing store portfolio, along with the “premiumization” of its branding, with the launch of its more upscale brand & Other Stories and its collections with Isabel Marant and Alexander Wang. Zara, meanwhile, was singled out for “shifting its positioning from affordable chic to fashion front-runner.” Interbrand also lauded Zara’s low-key approach to marketing.

Tech:

• iPhone 6 Keeping You Awake? Join the Midnight Vigil: With record pre-launch orders for the iPhone 6 and iPhone 6 Plus, Apple will start midnight sales for its devices in India for the first time, in line with the practice it follows elsewhere. The phones are to be launched in India on October 17. More than 5,000 of the new handsets have been reserved at Apple stores, multi-brand retail chains and e-commerce sites in the last two days, according to three senior trade executives. Sales to those who have booked the phones will start midnight at The MobileStore, UniverCell, Planet M Retail and Sangeetha Mobiles outlets besides Apple stores. “The craze about iPhones is for the first time felt in India like in the West,“ said Himanshu Chakrawarti, CEO, The Mobile Store. “The exclusivity to own the first lot of iPhones before others is huge, much like when a Salman Khan movie releases or how consumers used to rush at midnight to buy the first lot of Harry Potter books.“ Videocon-owned PlanetM Retail's chief executive Sanjay Karwa said the midnight launch will ensure traditional offline retailers have the advantage over online retail, which is creating market disruptions.

• Ericsson Bags Airtel 4G Deal; Pockets Two More from Idea: Swedish telecom gear maker Ericsson on Thursday said it has secured a contract from India's No.1 telecom carrier Bharti Airtel for supply of base stations and other equipment for its 4G network. Ericsson did not disclose the size of the deal, which is the first in the country for rolling out services using the FDD-LTE technology. People close to the development said the company has also signed some other smaller deals with Bharti and Idea Cellular. “We have got a network infrastructure deal from them (Airtel), which include base stations and other equipment,“ Chris Houghton, head of region-India at Ericsson, told ET. “Though, I can't comment on specifics of the deal.“ Ericsson, which has around 45% share in the global 4G LTE market, introduced its small cell radio dot system along with a multi-band indoor picocell, which aims to solve challenges mobile operators would face with coverage within buildings, especially in 4G. Ericsson's 4G network deal for Airtel's high-speed data services on the 1800 Mhz band using the FDD-LTE technology marks the first step towards rolling out 4G in India on a technology that is more widely accepted globally , compared with the TDD-LTE technology .

• Alibaba invests $50 million in TV remote app maker Peel: Peel, the maker of an app that acts as a “smart remote” for TVs, said it secured an additional $50 million in funding from Chinese e-commerce giant Alibaba Group Holding Ltd. The Peel Smart Remote app, launched in 2012, turns Android and iOS smartphones and tablets into remote controls that work on TVs, PCs, air-conditioners and other smart appliances. The California-based startup says it has more than 90 million users in 200 countries. Alibaba, whose recent initial public offering in the United States was the biggest in history, invested an initial $5 million in Peel in 2013. Peel charges TV networks to promote their shows on the app, which displays TV show listings and times. Peel chief executive Thiru Arunachalam told technology blog Re/code that the company would generate about $8 million in revenue this year and forecast revenue of $20 million for 2015. He added that the company was facing no pressure from Alibaba to integrate any e-commerce elements into its app.

• TaxiForSure plans app for automated payments: TaxiForSure, India’s third-largest cab service provider, plans to introduce a cashless payment system this year in which a smartphone app will automatically deduct fare from money preloaded in a user’s account. Rivals Olacabs and Meru Cabs have already launched such wallets, which can be loaded with money using debit or credit cards or net banking before the journey. Olacabs and Meru Cabs launched wallets on their mobile apps last month to compete with the cashless payment offered by San Francisco-based rival Uber, which entered India last year and has gained well-heeled customers in Bangalore, Delhi and Mumbai. “The wallet is ready. We are just making sure there are no security hassles,” TaxiForSure co-founder Aprameya Radhakrishna said. “However, wallets will only complement cash and other options, rather than becoming the preferred option of a majority of users.”

• Lenovo Unveils New Android and Windows Devices: Lenovo has announced a trio of new devices today as it looks to differentiate and gain inroads in the competitive PC and mobile computing space. The Next Web is at a launch event in London, where the Chinese electronics giant unveiled a new convertible PC and two new Yoga Tablet models, with some interesting features on board.

• Sprint is shutting down its WiMAX data network: Still clinging on to that beloved EVO 4G for dear life? You're going to have to upgrade in the near future. Sprint has confirmed a recent Android Central leak revealing that it will shut down its WiMAX network on November 6th, 2015. If you haven't made the switch to LTE-based devices on your personal account, you'll get an official warning 180 days (i.e. about six months) before the older network goes offline for good. The date isn't completely surprising -- Sprint had previously hinted it would shutter the service next year -- but it now gives you something to mark on your calendar.

• Google Launches Primer to Get Startups up to Speed on Marketing: Google is looking to bridge the gap between the complexity of its ad products and startup users’ often relative inexperience with marketing and search ads. Launched today, Primer looks to give startups the most basic of tips on successful marketing via five minute lessons (case studies, quizzes and insider tips) designed specifically for startups. Google said it “created Primer as a way to make it easier for businesses to be successful at marketing. We realize that some of the Google ad-tech products which connect businesses to customers also widen the gap between rookies and marketing pros.” Of course, helping startups to become more ‘marketing literate’ and to better understand the breadth of Google ad-tech options available also serves Google’s ends too. The app is currently available for iOS only, but will be headed to Android shortly.