Daily News Digest- 17th Oct'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Malls Lay Out a New Experience: Shopping malls in the country are going through a transformation to make themselves more of an `experiential' destination, adding more restaurants, spas, salons and even doctor clinics, at least partially influenced by the recent boom in online shopping. Bangalore-based real estate developer Prestige Group, for example, plans to bring food offerings to almost every floor and prominently on the first floor of its upcoming shopping malls rather than restricting food outlets mostly to the top floor as is the common practice now. “Earlier people used to come for shopping and they would eat. Now, we think they will come for food and will shop as well,“ said Suresh Singaravelu, executive director for retail at Prestige. “This is partly in response to increasing the experiential content and partly in response in recognition of the fact that you need to increase frequency of mall visits with all the online retailer catching the consumers' imaginations.“ With online retailers such as Flipkart and Amazon seen corner ing a chunk of the expected growth in India's overall modern retailing, industry insiders say a lot of mall owners are nervous. “We are all worried. We are trying to find out how we can fight the online and the issue of customers moving out,“ said a Mumbai mall developer who keeps in regular touch with other mall owners in the city through an e-mail group.“We are trying to find solutions.“

• Shoppers Log On to Comparison Portals for Picking Up Best Deals: At a time when all online retail biggies such as Flipkart, Snapdeal and Amazon run big discount sales, how do you make sure you're getting the best price for a product you plan to buy? A growing number of internet shoppers are turning to price comparison portals to check out the best deals. Aggregators such as mysmartprice.com, buyhatke.com and 91mobiles.com say the number of visitors to their sites and gross merchandise value of sales through their links have doubled in a matter of days, which may have boosted their own valuations. These sites get a small share of their users' purchases from online retailers as commission, which, according to industry sources, varies from 3-4% in the case of mobile phones and electronics to 10% for apparel and home furnishing. Besides comparing prices on different online shops, most of these sites provide mobile phone-specific information, availability of EMI facility and cash on delivery, and even offer cash-back on purchases. Sulakshan Kumar, co-founder at mysmartprice.com, said the site's daily traffic more than doubled to over 13 lakh visits on October 6, the day of Flipkart's Big Billion Day sale. India's top online retailer sold goods worth $100 million (about . 600 crore) that day, and mysmart` price.com -which attracts more than 180 lakh visits every month -got a small share of that. “The gross merchandise value (GMV) on that day rose three times to ₹4.5 crore from our site. After that day, we're maintaining GMV of ₹2.5 crore to ₹3 crore every day,“ Kumar said. Other price comparison sites such as buyhatke.com and 91mobiles.com, too, saw their traffic and business peak on the day of Flipkart's big sale.

• Kellogg Blurs the Line Between Cartoon and Ad: When Pogo starts its new series about the adventures of `Chhota Bheem' and his gang in the mythical land of Dholakpur next week, the episodes will also be about Kellogg's quest to sell more chocolate cereal.Chhota Bheem's escapades will revolve around a river of milk, chocolaty waterfall and volcano in a storyline co-scripted by Kellogg and Pogo. There will be a new character ­ Coco, the Kellogg mascot. While in-film product placements and co-promotion are not new, the world's largest cereal maker is taking it to another level by co-producing the four-part series of branded entertainment starring its mascot, which will air for at least three months.“What we are now getting is content close to 20 minutes from four episodes each, which will amplify our frequency and will work far better than a 30-second TV commercial. At the same time, children will have better and unique experiences too,“ said Harpreet Singh Tibb, marketing director at Kellogg India.The attempt is not just to break the clutter of TV commercials but also to leverage the growing fan base of its property Chocoland with Chhota Bheem, one of the country's most popular cartoon characters. Big advertisers are beginning to see value in creating such branded entertainment. Hindustan Unilever tied up with youth channel MTV India to launch six films inspired by the philosophies of their brands, while the film `Mere Dad Ki Maruti' helped Maruti Suzuki India's Ertiga.

• Flipkart to Give More Power to Marketplace, Restructure Team: Flipkart, which adopted an online marketplace model in letter a year ago, has now set into motion actions to embrace it in spirit too. Even after it technically became an online marketplace last year, a bulk of the goods sold on its site were through a former subsidiary ­ WS Retail. But India's largest online retailer wants to change that and is taking steps through an internal restructuring to make its marketplace that serves as a platform for other merchants to sell their wares more effective. This conscious embrace of the marketplace model will make it easier for the Bangalore-based company to achieve its target of having at least 10 times more merchants on its platform within a year. Flipkart had about 4,500 merchants earlier this year, much less than its rivals Snapdeal or Amazon. “They want to make the marketplace more competitive and hence are giving it more teeth,“ said one person who is directly involved with the process.

• Snapdeal to Build Data Platform For Tech Play: Snapdeal, India's largest online marketplace, is building its big data platform, as the Delhi-based firm looks to evolve from an e-commerce venture into a technology company, offering a suite of products and services. The platform, according to a senior executive of the company , will be open to the e-commerce ecosystem, includ ing brands, market research companies, banks and technology ventures, to provide deeper insights into the Indian consumer behaviour and help them formulate brand strategies as well as develop technologies, relating to apps, payment gateways and logistics. “We have close to 25 million users and we want to make their shopping experience relevant. We have so much information, so how do we make it relevant to people outside the company?” said Ankit Khanna, senior vice-president, product manage ment at Snapdeal. The development comes at a time when e-commerce, which accounts for about 1% of India’s $500-billion retail sector, is growing at a rapid pace, driven by a combination of larger mobile penetration, affordable devices and a wealthier middle-class. A number of global brands, such as Motorola and Diesel, have, in recent times, launched their products exclusively on India’s premier e-commerce companies, such as Flipkart and Snapdeal, as an increasing number of shoppers log in to purchase products, ranging from books and electronics to apparel and apartments. “The basic idea is what kind of insights can we draw from the data? We can help them to build products, price them appropriately, find out preferences of people shopping in tier-II and tier-III cities. The possibilities are endless,” said Khanna.

• Crocs India may add range of kids apparel to its stores soon: Crocs India Pvt. Ltd is test-marketing a range of children’s apparel through an online channel and will consider introducing it at physical stores over the next few months, a top company executive said. “We are testing apparel right now through an online portal. It fills the void in the market for fun, colourful, quality apparel for children where parents don’t have much of a choice when in the organized market,” said Nissan Joseph, managing director of Crocs India. The brand is testing its range of T-shirts, hoodies, leggings and tank tops, among others. “We want to see how this goes for us, before launching it in stores over the next six months,” added Joseph. The children’s apparel market in India remains highly fragmented, with a clutch of organized retailers. Overall, the kidswear market makes up approximately 20% of the total apparel market, and it is expected to grow at 10.5% over the next 10 years. According to consulting firm KPMG, the children’s apparel market is likely to touch Rs.43,000 crore by 2016 and Rs.72,000 crore by 2021. 

• Danone may part ways with joint venture partner Rahul Narang Group: Nearly five years after Groupe Danone broke up with Britannia Industries Ltd, the French food and beverage maker is looking to part ways with its current joint venture (JV) partner, the Rahul Narang Group, two people familiar with the development said. Danone wants full control of the beverage brands Qua and B’lue, which are manufactured and distributed by two JVs—Danone Narang Beverages Pvt. Ltd and Narang Danone Access Pvt. Ltd, said one of the two people, both of whom spoke on condition of anonymity. But as in the case of Britannia, a part of the Wadia group, Danone is headed for a legal battle with the Narang Group. On 9 October, Rahul Narang, promoter of the group, filed a petition in the company law board against Danone Narang Beverages under Sections 397 and 398 of the Companies Act, alleging mismanagement of funds, misconduct towards the company members and oppression by the firm in which Danone has a majority stake.

• Hilton Worldwide launches new hotel brand 'Canopy by Hilton': Hilton Worldwide today said it has launched Canopy by Hilton, a new hotel brand that will offer simple, guest-directed service and local choices. "We saw an opportunity to not only enter the lifestyle space by developing a new brand but also to redefine this category by creating a more accessible lifestyle brand," Hilton Worldwide President and CEO Christopher J Nassetta said in a release issued here. Canopy by Hilton will develop through new-build and conversion projects in key urban neighbourhoods and vibrant secondary markets around the world with properties expected to begin opening in 2015.

International:

• Virgin Australia buys out Tiger Airways for A$1: Virgin Australia will buyout struggling budget carrier Tiger Airways Australia for A$1 (£0.54). It would take full control of Tiger Airways from its current 60% stake in an effort to speed up a turnaround. "We will benefit from the economies of scale and achieve profitability ahead of schedule by the end of 2016," said chief executive John Borghetti. Virgin bought its first stake in the venture from Singapore's Tiger Airways for A$35m last year. Tiger Airways, however, has struggled to win customers in a slumping domestic market. "Given the ongoing subdued consumer demand in the Australian domestic market, the growth of the Tigerair Australia domestic fleet is likely to be reduced," Mr Borghetti said in a statement. In August, Virgin had said its annual net loss tripled to A$355.6m due to weak consumer sentiment, the country's carbon tax and the cost of buying the stake in Tiger Airways.

• Google profits slide 5%, missing analyst estimates: Google has reported third-quarter profits of $2.8bn (£1.7bn), down 5% from the same period a year earlier. That sent shares in the internet giant down over 3% in after-hours trading. A closely-watched figure - the average cost-per-click that Google - decreased by 2%. The company also missed analyst expectations for revenue, which increased by 20% to $16.52bn for the period, which was for the three months ending on 30 September 2014. "We continue to be excited about the growth in our advertising and emerging businesses," said Google chief financial officer Patrick Pichette in a statement accompanying the earnings statement. Google's profits were also hit by increasing costs of real estate, such as data centres, and hardware inventory costs, which increased by 37% to $3.35bn from the same period a year earlier. Although Google makes the majority of its revenue from the advertising it places on its search site and others, the technology giant has been looking to expand its offerings.

• French Connection Halts Use of Angora: French Connection is the latest fashion label to stop using angora in the production of its clothes and accessories, with the British retailer saying Thursday that it has ended its use of the product "with immediate effect." French Connection’s move follows labels including Hennes & Mauritz AB, Topshop and Next through to Calvin Klein and Stella McCartney having banned the product. The labels took action following reports by animal rights activists that rabbits are routinely abused in Chinese angora farms. The retailer said that while it had initially “taken steps to ensure that the angora used in French Connection clothing is carefully collected by shearling and…the rabbits are not mistreated,” the firm ultimately decided to stop using the material. “Despite the steps we have taken…we recognize some customers have concerns about the continued inclusion of these fabrics in our ranges," the retailer said.

• Jimmy Choo Seen Pricing London Float at Bottom of Range: Luxury shoemaker Jimmy Choo is expected to set its London flotation price at 140 pence a share, the bottom of its indicative range, two sources familiar with the matter said on Thursday, amid declining enthusiasm for new issues. The price values the company at 546 million pounds ($874 million), well below the initially hoped for top market value of 702 million pounds. The firm had first set a price range of 140-180 pence before narrowing it to 140-160 pence earlier this week. Trading is due to begin on Friday. Weaker equities markets have hit demand for new issues in Europe, with British bank Aldermore cancelling plans to float in London. French energy services firm Spie and Italian cosmetics firm Intercos both pulled IPOs last week. Fund managers have also expressed concern that Jimmy Choo had around 100 million pounds of debt and was spending more than the industry average on opening new shops.

• Gap Board Approves $500M Share Repurchase Program: The Gap Inc. board of directors has approved a new $500M share repurchase program of the company's common stock. The company said the decision reinforces its commitment to returning excess cash to shareholders. The latest program follows the prior $1 billion share repurchase program. Sabrina Simmons, chief financial officer, said that as of the end of the second quarter, the company has distributed $800 million in cash to shareholders through dividends and share repurchases.

• Cushman & Wakefield Taps Laura Pomerantz for Post: Laura Pomerantz has joined Cushman & Wakefield as vice chairman and head of strategic accounts, effective immediately. Pomerantz has been principal and founding partner of Laura Pomerantz Real Estate LLC since April 2013. She expects to be joined by five professionals from her firm, including longtime associates Betty Ende and Ilyssa Schwartzberg. Pomerantz said she plans to keep her own company operating for the foreseeable future since she has more than 50 transactions to close. In her new role, Pomerantz will lead Cushman & Wakefield’s newly formed Strategic Accounts group and be responsible for growing relationships for the firm. She will be based at 1290 Avenue of the Americas here.

Tech:

• Hardware in Pocket, Micromax Shifts Focus to Software: Home-bred handset maker Micromax Informatics plans to initially invest ₹100 crore on services and innovation as it tries to move beyond the business of mobile phone hardware that has become more or less standardised. As part of the exercise, the Gurgaon-based company is developing a new set of smartphones on a forked version of the Android operating system, people privy to the development told ET. The venture, code named Project Yureka, is likely to be formalised over the next two months, these people said. Part of the initial investment will go towards setting up research and development centres in Bangalore and Beijing, besides hiring top coding, programming and marketing talent. “The processes are being formalised and it will take about two months for things to begin,“ said Micromax's co-founder Rahul Sharma. He did not say whether the company will create a separate wholly-owned unit for launching these set of devices, which may not have Google's stock Android operating system. “We have a certain tailwind and we're moving in the right direction. I feel now that the hardware is fine but the next disruption has to happen on the software side where we will be empowering users,“ Sharma said without elaborating. Trade sources said Micromax could be in discussions with Cyanogen, the maker of CyanogenMod, a modified version of Android that is a popular alternative OS and is installed on over 12 million devices worldwide.

• Social Media Fails to `Like' ISL: It may be the world's favourite sport, but Indians on social media aren't exactly warming up to the soccer event, Indian Super League. In the last 15 days, there have been just about 70,000 mentions of the soccer league on social media, most of them on Twitter, say social media firms. The Indian Super League, backed by Reliance Industries, IMG Worldwide and Star India, kicked off in Kolkata on October 12, where over 60,000 fans turned up to watch the match between Kolkata and Mumbai. The event will see the participation of eight teams, 212 players and a total of 61 matches. The league has about 42,000 followers on Twitter, 129th of the fans of the English Premier League, and 1 14th of the fans of the cricketing event Indian Premier League on the social front. Social media companies say the league must experiment with fantasy leagues to engage with potential fans. In addition to this, the sporting event is yet to gain a followership like domestic leagues in England (EPL) and Spain (La Liga). During the soccer World Cup, over 600 million tweets were sent out on Twitter and Indians were actively engaged in discussing the game“. The Indian viewer understands soccer. The main issue is the quality of football is disappointing and that's leading to the lack of interest in general, online and offline. To add to this, it comes so close to the World Cup that it feels like we've gone from seeing an eye candy of an event to an eyesore of a tournament,“ says Rajiv Dingra, founder and chief executive officer of digital media agency WATConsult.

• India may get Nexus 6, 9 as part of global launch: Signalling the growing importance of the Indian subcontinent for the search giant, Google may unveil its latest devices -Nexus 6 and Nexus 9 -here as early as November along with the US and other developed markets. The Nexus 6 smartphone has been developed by Motorola and will be available for pre-order in late October and in stores in November. The tablet -Nexus 9 -has been developed by HTC and will be available for pre-order on October 17 and in stores starting November 3. According to sources, both the devices would be available in India in the month of November itself, in line with the global launch.

• Nokia hangs up on TN manufacturing line: It started with Nokia 1100 in 2006 and ended with the Nokia Citrine 107 on Thursday when the mobile phone maker officially shut down its Sriperumbudur plant on the outskirts of Chennai with the last shift shipping out the last mobile phone bearing a `Made in India' tag. The company had announced suspension of production from Nov 1. Since the last batch of orders was completed on Thursday , Nokia announced `no-production days' from Friday until October 31. Union sources said, “We have made a request that the plant be kept open for workers till some settlement is arrived at.On Friday , there will be no production, but workers would come in to receive Diwali bonus (though it is credited directly to the bank).“ G Haridas, 25, an operator at the plant, said, “They are almost bringing down the shutters. Our lives are fall ing apart.“ Nokia agreed to a 20% Diwali bonus to all its employees, like last year . “Each employee will get around Rs 8,400 as bonus,“ union sources said.

• Lenovo to become No 3 smartphone vendor in India after Motorola buy: Lenovo is set become the third largest smartphone vendor in India after the completion of its acquisition of Motorola Mobility, a sharp move up for the Chinese company which has made its name though PC sales in a market that it hopes to start local manufacturing of handsets in. "Presently, Motorola is at number four in India. And, we are expecting to close the acquisition by the end of the calendar year, which we believe make us the third largest smartphone player e in the Indian market," Amar Babu, managing director at Lenovo India told ET. Babu said that Lenovo's smartphone business has grown by 200% year on year, much faster than the market.

• Google Introduces .SOY Web Domain for Latino Audiences: Google just announced it is bringing a new domain name to the Web: .SOY. Not to be confused with the popular vegetarian alternative to meat, the new domain means “I am” in Spanish, and is intended to be used for Latino “identity and expression”. The company has also set up a sort of central hub for the domain, iam.soy, where you can find out more about the new sites with the domain, check domain availability and then purchase from name registrar partners it if you want. This follows other recent news of custom top-level domains, such as the new .NYC domains. If you’re looking to create a website catering to Latino audiences, it should be worth a look.

• Twitpic Is Shutting Down After All, on October 25: In what seems like the final blow after a roller coaster ride for its users, Twitpic has announced that it will be shutting down on October 25th. The news comes after the company’s original announcement early last month that it would be shutting down, followed by hopes the service would remain active thanks to an apparent acquisition. In its blog post today, founder Noah Everett apologized for getting everyone’s hopes up. Twitpic says it was pressured to shut down after Twitter threatened to cut off access to its API if it didn’t drop its trademark filing. Meantime, users must export or otherwise remove all assets from the service by October 25.