Daily News Digest- 16th Oct'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• SoftBank's $650m Injection to Value Snapdeal at $2 B: SoftBank Corp is set to invest up to $650 million in Snapdeal in a deal that could see it become the largest shareholder with a nearly 35% stake in India's second-biggest online retailer and is expected to be solemnised in the last week of October when the Japanese mobile and Internet giant's founder and CEO Masayoshi Son visits India. Multiple sources familiar with the transaction have told ET that the latest round of fund-raising, which will leave Snapdeal with a valuation of around $2 billion, could also see Nikesh Arora, former Google board member and now vice-chairman of SoftBank, pick up a 5% stake in his personal capacity and be appointed to the Indian company's board, possibly as its non-executive chairman. “The deal is almost done. The big visit of (SoftBank founder) Son to India is in that direction,” said one source, who has been directly involved in the discussions. Son, 57, who is Japan’s richest man with a net worth of around $22 billion, will be in India on October 27 and 28 for a visit that could also see him call on Prime Minister Narendra Modi, the latest in a series of high-profile international business leaders to do so. At least two other sources confirmed that a deal had been all but sealed and would be announced in weeks.

• IndiGo Sets $26b Record, Orders 250 A320neos: IndiGo, India's biggest domestic airline by market share, has signed a blockbuster agreement with Airbus for 250 A320neos -the planemaker's single biggest order for such aircraft. The deal is worth $25.7 billion at a list price of $103 million apiece, although carriers typically negotiate lower rates for bulk orders. Under the agreement, the airline has the right to buy another 100 planes. Aditya Ghosh, president of IndiGo, justified the size of the order. “We have always maintained that air penetration in the Indian market is lower than countries like the Philippines and a lot more needs to be done to increase capacity in the Indian market,“ he said in a phone interview.The no-frills airline emerged on the Indian aviation scene in 2005-06 with an order for 100 Airbus A320 aircraft. In January 2011, it topped this by ordering 180 A320neos, then the biggest commercial plane order by volume in aviation history. That order worth $15 billion at list prices is still pending. IndiGo's big-ticket orders feed into its strategy of rotating the fleet to keep it young besides beefing up earnings through the sale and leaseback of planes, helping it become the only Indian carrier to consistently declare profits while rivals have suffered. However, FY14 profit halved to ₹317 crore from ₹787 crore in the previous year. The company is slated for an initial public offering and has hired four investment banks toward this end.

• Startups to be Stars at IIT Placements: Flush with a record billion-dollars-plus raised during the first nine months of this year, dozens of startups are making a beeline for IIT placement season set to kick off in December this year. Already, the number of startups who have enrolled for the campus placement season this year has doubled or trebled at many IITs, according to campus sources. For example, IIT Madras which had only seven startups last year, expects at least 30 to come calling this year. “Over 14 startups have already registered, out of which 11 will hire exclusively from us,“ Vishranth Suresh, academic affairs secretary, IIT Madras, said.Similarly, at IIT Kanpur, 35 startups have already registered for this placement season, with the final tally expected to cross 45. Only 24 visited the campus last year. The presence of such a large number of cash-rich startups will cause a fierce talent war with well-known recruiters like Google, Oracle, Samsung, Schlumberger and Goldman Sachs for the best among the 9,000-plus students who will graduate from 16 IITs next year. Many startups are first-timers at the IIT placements. Two-to-four-year-old companies are offering ₹12-15 lakh pay packages, on a par with salaries offered by core companies and IT firms, a placement coordinator at one of the older IITs said.

• Cigarette Packets to Now Carry Health Warnings on 85% of Space: The government has made it mandatory for tobacco companies to carry health warnings covering at least 85% of the surface of cigarette packets, making India the world leader in implementing plain packaging of tobacco products as advocated by the World Health Organisation . The health ministry on Wednesday amended the rules under the Cigarettes and Other Tobacco Products Act (COTPA) through a gazette notification, fixing April 1, 2015, as the deadline and leaving cigarette makers with less than six months for compliance. The development has come in the wake of an international report by the Canadian Cancer Society , which ranked India at 136 out of 198 countries with regard to the size of health warnings on cigarette packets. Thailand (85%), Australia (82.5%) and Uruguay (80%) were the top three countries, as per the report. As per earlier rules, pictorial warnings covered 40% of just the front surface of the cigarette packs in India. With the drastic revision in rules, India will share the top spot with Thailand. Tobacco Institute of India (TII), which represents the interest of cigarette makers including ITC and Godfrey Phillips, said the proposed warnings are unreasonable, drastic and impractical to implement and enforce.

• Biba launches web portal to leverage growing e-commerce mkt: Ethnic wear brand Biba today launched its online portal to leverage the country's fast growing e-commerce space and also cash on the ongoing festive season. Commenting on its e-commerce portal, Biba Managing Director Siddharath Bindra said, "We want to make shopping convenient for our consumers and e-commerce being a prevalent and growing channel is indeed a natural progression for our existing business." At present, 6-8 per cent of the company's revenue comes from online sales. "We see our foray into this online world as another important way to connect with our customers, and provide them with an easy access to our contemporary fashion," he added.

• Full Mobile Number Portability by March: The telecom department has approved full mobile number portability (MNP), which will be implemented by March next year, in a move that will benefit a large number of consumers who will be able to retain their cell phones when they relocate to another part of the country. Telecom Commission, the highest decision-making body in the telecom department, on Wednesday took the major step towards clearing the one-nation, one-number plan with full MNP aimed at simplifying mobile telephony for all. “The Telecom Commission has accepted TRAI's (Telecom Regulatory Authority of India) recommendations on full MNP,“ a senior government official said, adding that the process will be expedited to meet the deadline. The telecom minister is expected to issue a final approval on full MNP implementation in the coming weeks. MNP allows mobile users to keep the same mobile number when they change circles or even change operators when moving to another service area. India is divided into 22 such telecom service areas, also called circles, with most of them reflecting a state, but some, like UP, is divided into UP (East) and UP (West). At present, this facility is limited to within the same service area only, which means that a customer in the Delhi service area can change his service provider from Airtel to Idea or Vodafone, without having to change his number.

International:

• Wal-Mart says to slow store openings, invest more in ecommerce: Wal-Mart Stores, the world's largest retailer, said on Wednesday it would open fewer stores in the US in the next fiscal year and ramp up spending on e-commerce. The retailer will open 180-200 of its small format stores, called Neighborhood Markets, in the next fiscal year through January 2016, Greg Foran, head of the US business, told a meeting of investors and analysts. That compares with its plan to open 270-300 of the small format stores in the current fiscal year. Foran said Wal-Mart would open 60-70 Super centers, its large format store, in the next fiscal year, compared with a plan for 115 openings, including conversions, this year. Wal-Mart CEO Douglas McMillion told the meeting that the retailer would invest "a bit less than we would in stores" and invest more in e-commerce.

• Elie Saab Expands Paris Footprint: A darling of red-carpet regulars on both sides of the Atlantic, Elie Saab is moving even closer to his clientele. The Lebanese designer, best-known for his floor-sweeping princess dresses and a predilection for sparkling Swarovski crystal, is setting up shop next to the Four Seasons Hotel George V in Paris, an address favored by his customers — and himself (the luxury hotel served as his temporary residence before he acquired his own apartment in the French capital). The 3,200-square-foot venue, located at 31 avenue George V and slated to open in the first half of 2015, is said to feature a new brand concept combining fashion, interior design and lighting. It is currently being developed by architecture firm RDAI, which has previously lent its hand to Hermès and Yves Saint Laurent, in tandem with Saab himself. The boutique will stock the label’s ready-to-wear collection, accessories and fragrances and is the first in a series of new store openings scheduled “in other major cities in the short-term future,” the company said.

• Alipay Offers U.S. Brands an Online Bridge to China: Alipay is opening a fast lane for Chinese e-commerce consumers wanting to shop in the U.S. The payment arm of Alibaba will today launch Alipay ePass, a suite of products that will help Chinese shoppers buy directly from American Web sites. Jingming Li, Alipay U.S. president and chief architect, told WWD that ePass offers secure, cross-border transactions through Alipay. The solution can also help with the cumbersome shipping, tax and customs processes, which are currently the biggest hurdle for U.S. brands entering China via the e-commerce ecosystem. EPass also has a marketing arm, which helps participating brands target desired Chinese shoppers locally. “It will significantly lower the barriers [of cross-border commerce] for both sides and bring certainties into this uncertain industry of cross-border trade,” Li said, referencing a recent study by Alipay that found that almost 80 percent of those who shop cross border already use non-Chinese websites. “That’s the fundamental thing: To make it easy for both sides.”

• Fran Horowitz Tapped to Head A&F’s Hollister: Fran Horowitz, president of Ann Inc.’s Loft division, has been named president of the Hollister division of Abercrombie & Fitch Inc. Horowitz will have overall responsibility for all product and consumer-facing activities at Hollister and report to Michael Jeffries, chief executive officer of A&F. Prior to assuming her post at Loft seven months ago, Horowitz, 51, was a consultant to Ann Inc. Earlier, she was executive vice president of women’s merchandising and design for Express Inc. and spent 13 years at Bloomingdale’s in a variety of merchandising roles. Jeffries praised Horowitz’s experience as well as her merchandising skills. She joins A&F at a time of transition as the retailer establishes a new management structure spurred by pressure from activist investors. Jeffries was replaced as chairman by Arthur Martinez, although he remained ceo, and A&F revealed plans to appoint presidents for its two operating units.

• Wal-Mart Vows to 'Win' Holiday: Despite flat same-store sales and lackluster earnings, Wal-Mart aims to “win” the upcoming holiday season. That bravado came on Wednesday from Greg Foran, the new president and chief executive officer of the U.S. business at the mass behemoth’s 21st Annual Meeting for the Investment Community. The meeting was to reassure Wall Street in the face of the volatile stock market and signs that shoppers may rein in spending. It also was a rallying of the troops — Foran dubbed it “a call to arms” — to help pacify employees who have become increasingly vocal and organized, protesting their wages, work schedules and benefits. The meeting was the first time the hand of Doug McMillon, chief executive of Wal-Mart Stores Inc., could be felt in the program, which was carefully choreographed to include lots of videos of advertising and marketing campaigns. Along with McMillon, Foran represents a generational shift at the retailer as it rushes to adapt and become less insular. He is Australian and doesn’t speak with the Arkansas twang of founder Sam Walton and the mostly male executives the company has groomed. Nor does he use the same words. “I put a high value on candor and the unvarnished,” said Foran, who was Wal-Mart’s top Far East executive before his appointment in July.

• Ronald Boire Named Sears Canada Interim CEO: Ronald D. Boire has been named acting president and chief executive officer of Sears Canada, effective immediately. Boire was executive vice president, chief merchandising officer and president for Sears’ full-line stores and the Kmart format. He exits Sears Holdings Corp. today. Prior to joining Sears Holdings in January 2012, Boire was Brookstone’s president and ceo. Before his stint at Brookstone, Boire was president of U.S. toys for North America at Toys ‘R’ Us. Before that, Boire was executive vice president, global merchandise manager, for Best Buy Co. Inc., responsible for global technology and vendor management, global sourcing and private-label development.

Tech:

• Google unveils ‘Lollipop’ Android system, new Nexus devices: Google on Wednesday ramped up its mobile arsenal, upgrading its Nexus line with a new tablet and smartphone, and unveiling its revamped Android software, to be dubbed “Lollipop.” The US tech giant also announced the launch of a streaming media player for music, movies and videos, which can also allow users to play games via the Android TV device. “Lollipop” or Android 5.0, the upgraded operating system for mobile, “is designed to be flexible, to work on all your devices and to be customized for you the way you see fit,” said Google vice-president Sundar Pichai, who heads the Android operations. With the new operating system, according to the Android Website, “The songs, photos, apps, and even recent searches from one of your Android devices can be immediately enjoyed across all of your Android devices.” The new devices give Google and its Android partners a broader portfolio to compete against Apple, which launched two upgraded large-screen iPhones last month and is expected to unveil new iPads on Thursday. The Nexus 6 smartphone becomes the newest and largest of the Google-branded handsets, and is produced by Motorola, which Google bought in 2012 and is in the process of selling to China’s Lenovo. This aluminium frame device has a six-inch high resolution screen and a 13-megapixel camera.

• Apple Packs the Shelves With Supply for Midnight iPhone Launch in India: Apple is shipping 50,00055,000 units of its new iPhones to India in the first phase to ensure there is adequate supplies for Thursday midnight's launch, despite a simultaneous launch in China and huge global demand, two of its top trade partners said. According to them, the first lot of shipment will be sufficient to meet the demand till the weekend with record pre-booking demand in excess of 21,000 units as of Tuesday across exclusive stores, large chains, online retailers and mom-and-pop stores. “The fear of shortage in inventory is much less now since there will be sufficient inventory to last till the weekend and Apple has fresh stocks that will hit the shelves by early next week,“ said one of the trade partners. “Of course, certain models may sell faster and get stock out such as the gold colour or 128 GB unit which have the maximum demand in pre bookings,“ the person added. An email sent to Apple did not elicit any response as of Wednesday press time. Apple's local distributors and India team has been lobbying with the Cupertino-based parent to launch the iPhone 6 and iPhone 6 Plus in India ahead of Diwali and make the most of the festival demand. Rival Samsung's top model Galaxy Note 4 too will hit the market on Friday. Himanshu Chakrawarti, CEO at India's largest cellphone retailer The MobileStore, said the new iPhones have generated unprecedented enthusiasm in the country and more than half the customers who have pre-booked the smartphone have already made the full payment. He, however, refused to share further de tails. The initial supply is much better than last year's high-voltage iPhone 5s and 5c launch when only about 20,000 units had hit the Indian market in the first phase, thereby creating huge supply crunch, particularly for the premium iPhone 5s.

• Will.i.am introduces the Puls smartwatch: When you think wearables you don’t usually think international superstar or Salesforce. Push aside that old way of thinking aside because Black Eyed Peas frontman Will.i.am just unveiled his smartwatch the Puls. Pronounced “pulse,” the smartwatch is voice controlled via a Siri type feature called Aneeda (get it? Aneeda. I need a…). It ships with Instagram, Facebook, Twitter (called Twitrist. get it? Twit wrist. Puns!), and Salesforce. It also has the expected photo, email, contacts, call, texting, calculator, music, fitness and music. The watch is released under his i.am+ brand which has a team of 35 engineers. It took the company two and a half to three years to build. It has 1GB of RAM and 16GB of storage. It also has GSM 3G, Wi-Fi, Bluetooth, GPS, a pedometer and accelerometer. The battery is part of the strap along with a speaker. The Puls comes in clack, white, blue and pink. Plus there are high-end versions in gold and gold with diamonds.

• Facebook Doubles Ad Code Bug Bounties Through End of 2014: The holidays are coming up and that means shopping for presents. If you’re a whitehat hacker looking to earn some cash, Facebook might be able to help you out. Facebook announced today that it will double the cash given to hackers that find bugs in the social network’s ad code. To take part in checking Facebook’s code, you’ll need to set up a whitehat test account. Once that is set up head over to A Bounty Hunter’s Guide to Facebook and start hacking for cash.

• HBO to Launch Standalone Streaming Service in 2015: The company has confirmed it’ll be launching a standalone streaming service in the United States next year. The decision was confirmed by HBO chief executive and chairman Richard Plepler at a Time Warner investor meeting. He highlighted the growing number of homeowners that pay for broadband, but not a traditional cable TV package: “That is a large and growing opportunity that should no longer be left untapped. It is time to remove all barriers to those who want HBO.” HBO is yet to reveal the precise details of how such a service will operate. The pricing model will be vital for its success and the library could be limited – either in breadth or the timeliness of its releases – in order to help HBO maintain relationships with established TV providers. “We will work with our current partners,” Plepler added. “And, we will explore models with new partners.”