Daily News Digest- 20th Oct'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Flipkart ahead of Amazon in Diwali traffic: The Indian e- commerce industry has already witnessed plenty of fireworks much before Diwali crackers have started bursting. As the online festive discount season draws to a close, it seems Flipkart is ahead of the rest in terms of traffic, in spite of the consumer backlash that it had to face on October 6. The biggest rival for Flipkart, Amazon, which concluded its week- long Diwali Dhamaka on October 16, witnessed a 200 per cent (two- fold) jump in its traffic on the first day of the week long sale, the company said. For Flipkart, the growth in traffic was 10 times that of anormal day on October 6. Incidentally, traffic growth doesn’t always translate into higher sales as one might not finally order a product after visiting the site. On actual sales, Flipkart said it had a GMV (gross merchandise value) of $ 100 million on the Big Billion Day ( October 6). Given that Flipkart had achieved sales of $1 billion in annual GMV in 2013- 14, its average daily sales last financial year should have been about $ 2.7 million. So, Flipkart recorded almost 40- times growth in sales on October 6, going by the numbers given by the company. Amazon does not share its GMV.

• Shoppers Log Out, Step Into Local Stores Ahead of Diwali: |Malls and markets in and around Delhi, Mumbai and Kolkata have been teeming with shoppers scouring for Diwali gifts and grabbing the latest electronic items this weekend, bringing relief to traditional retailers facing an unprecedented heavy discounting onslaught from online retailers. Supermarkets and consumer durable companies said it is a much better Diwali shopping season -when traditionally the biggest chunk of their annual sales takes place -than last year, thanks to improved consumer sentiments, although some smaller retailers have been impacted by big online sales. “There is a good number of serious shoppers out there,“ said William Bissell, managing director at Fabindia. The retail chain of ethnic garments and furnishings has seen a 31% year-on-year jump in its sales so far this Diwali season. Vineet Jain, vice president for Big Bazaar in the Delhi region at Future Group, said, “Probably, today (Sunday) is going to be the best single-day sale for us in NCR (national capital region).“ Even electronics retailers reported sales jump despite huge discounting offered by e-commerce companies such as Flipkart, Amazon and Snapdeal, thanks to the decision of top brands such as Sony, Samsung and LG to control supply of their top models to online stores.

• StayWell Hospitality to Add 18 Hotels in India by 2017: Australia-based StayWell Hospitality Group plans to add 18 hotels in India by 2017 targeting mid and up-scale segments as part of expansion plans entailing an investment of around $20 million. The group has two properties in the country and is targeting a mix of major metros and smaller cities, including Mumbai, Delhi-NCR, Goa, Jaipur, Bangalore, Chennai along with Hyderabad, Kolkata, Visakhapatnam and Ahmedabad. “We plan to have 20 properties in India as part of growing our portfolio globally to 100 by 2017.Currently we have two hotels, one in Jaipur and one in Gurgaon in the country,“ StayWell Hospitality Group Chief Executive and Managing Director Simon Wan told PTI. When asked about the invest ment for the purpose, he said it would be around $20 million (over ₹120 crore). The company that operates two hotel brands Park Regis (up scale brand) and Leisure Inn (midscale brand) said India of fers a great opportunity for ex pansion as it is one of the major growing economies in the world. Currently, its two properties in India are under the Leisure Inn brand. Elaborating on the expansion plans, Wan said: “In the first phase over the next six months, we will be opening five more hotels -a Park Regis each in Goa and Jaipur and two Leisure Inn in Mumbai and one in Hyderabad.“ Other destinations which the company is looking at are NCR, Bangalore, Chennai, Raipur, Kolkata, Visakhapatnam and Ahmedabad among others, StayWell Hospitality Group Managing Director for India Rohit Vig said. On the modalities of operating the upcoming properties, Wan said it would be a combination of management contract and investment by StayWell. Usually, the group follows three routes for growth -opening of new greenfield hotels, acquiring and re-branding existing hotels and portfolio acquisitions, he added.

• AirAsia India to Connect Delhi, Mumbai Too: The Indian unit of AirAsia will soon start flights from big cities, changing its strategy of connecting smaller cities to take on competition which followed the airline wherever it went since launch of operations earlier this year. AirAsia India, which started with connecting cities like Chennai, Kochi, Goa, Chandigarh and Jaipur from its hub in Bangalore, plans to start operations from key cities like Delhi and Mumbai. The airline had earlier announced that it wouldn't operate from these cities because of high airport charge. “We had earlier decided to operate between smaller cities and develop markets but the competition is following us everywhere. Now, we have decided to take on competition in their big markets like Delhi and Mumbai by announcing our flights soon,“ AirAsia India Chief Executive Mittu Chandilya said. Since its launch, AirAsia has been facing severe competition from other domestic carriers. Days after it announced Bangalore as its hub, other airlines ramped up operations from there. Com petition followed it on the Banga lore-Jaipur sec tor too, launch ing new flights. Analysts say Ai rAsia's new strat egy will help it grow faster in In dia. “The shift in strategy to bigger cities is a perfect move and will help the airline in more ways than one. It will fetch market share for the airline, help it break even much faster and, above all, will provide much better visibility to the airline,“ said Girish Jakhotiya, chief consultant at Jakhotiya & Associates, a strategy consultancy firm.“ Aggression is the best defence and AirAsia India is doing the right thing by moving into the competition's market to take them on.“ This change in strategy has, however, slowed the capacity-addition plan of the airline, which will now operate a fleet of five aircraft until endDecember. It initially had a target to have 10 planes by the end of 2014, which was later cut to six. “Now, the sixth aircraft comes only in January ,“ said Chandilya. He said all AirAsia India's flights, with the exception of BangaloreChennai, are generating cash. “The Bangalore-Chennai flight is not making money because we are pricing it less due to competition from other modes of transport that are available in abundance between the two cities.“

• Motown Refrains from Raising Car Prices: Carmakers refrained from increasing prices for the eight straight month in October, the longest such stretch in the Indian market, although the stability isn't linked to the slowdown as much as it is to incentives in the form of excise duty cuts by the government to stimulate demand. Maruti Suzuki India, the biggest car company with a 45% share of the domestic market, hasn't raised prices since December 2013. South Korea's Hyundai, the second-largest auto company in the country, increased prices last in February, before the government reduced excise duty. According to data compiled by ET from the market, none of the carmakers increased prices as they sought to propel car sales, except for notional rate changes for models such as Ford EcoSport and Toyota Etios. The 4-6% excise duty cuts in the interim budget in February boosted demand and inadvertently helped the government tame the industry on prices. As a result, the industry was able to overcome a record two years of declining sales and sell more cars in the first half of this financial year. “The decade's worst slowdown has pushed the automakers to rethink about their overall game plan in India. Moreover, the pricing strategy is something which is generally a counter to revelry and currently none of them are willing to weaken down their positioning in the recovering market,“ says Amit Kaushik, principal analyst (autos) at IHS Automotive, a global consultancy firm.

• Myntra to Open London Office to Partner European Brands: Bangalore based online fashion retailer Myntra is in the process of setting up an office in London and plans to expand to New York in about a year. “The London office will lead our partnerships with brands in UK and Europe, liaison with European design studios, spot global fashion trends and generate fashion content,“ said Mukesh Bansal, chief executive of Myntra, which was acquired by online department store Flipkart earlier this year for an estimated $370 million (about ₹2,200 crore). The company has appointed Mark Sebba, who retired as chief executive of UK-based online high-fashion group Neta-Porter earlier this year, as an advisor in the run-up to the launch of its London office. Sebba is largely credited with helping scale up the magazine-style fashion e-tailer, owned by Swiss luxury group Richemont, from a small start-up in the early 2000s to the $850 million company that it is today. “We are very excited to have Mark (Sebba) on board,“ said Gautam Kotamraju, vice president of fashion brands at Myntra, who is leading the setting up of Myntra's Lon don office. Kotamraju said getting international fashion industry experts like Sebba is part of the reason for setting up an office in London. “We, as a market, still look to the West for our fashion inspirations. London is a fashion Mecca and building expertise there will help us be a credible fashion destination for consumers.“ With fashion and lifestyle quickly becoming the largest category in India's fast-growing online retail industry, Myntra and its Delhi-based rival Jabong are increasingly focusing on global brand partnerships and designerled in-house brands to attract and retain customers.

• #ApplyNow, MNCs Hiring Social You: Uber Cabs and Twitter India are hiring. But unless you follow the right people on Twitter or are on their mailing list, you'll never know about it. These companies aren't putting out advertisements on their websites or using traditional recruitment companies to find them the best candidates; but have been sending out mailers and tweets to customers or followers. The team for Twitter India has posted tweets inviting candidates to apply for a job in Mumbai. It reads: “Team @TwitterIndia is looking for an associate partnerships manager to join us. #ApplyNow.“ Uber Cabs is looking for managers and has decided to go the non-traditional route to find them. In a mail to clients in Delhi, it said: “Are you fired up by the opportunity to move your city through data and analytics, world-class support and creative strategy? Come join us!“ The company's general manager in Delhi, Gagan Bhatia, said people who have used their service are the ideal candidates since they are locals. “This is a fantastic tool to use for recruiting.“ Social recruitment has taken off with a bang over the past year. “It's a quick process that helps short-listing candidates while doing some research on them. We help clients like Sula Vineyards and L'Oreal find junior to midand senior-level executives,“ said Zafar Rais, founder and chief executive at Mindshift Interactive, a digital outreach company .

• Airbus on cloud nine in India: Kiran Rao says Airbus will be number one in India for at least the next 10 years. The executive vice- president of the Toulouse- based plane manufacturer has reasons for his confidence. For one, it has just won the biggest single order globally, from IndiGo. Predictably, Boeing is not ready to concede defeat. Dinesh Keskar, its high- profile senior vice- president ( sales) for the Asia- Pacific, dismisses all talk of India turning into an Airbus market and says they will dominate the wide- body aircraft market and continue to have half the India market in the next 10 years. However, the numbers are disappointing for Boeing. India has been a 50: 50 market for the two. Airbus has suddenly zoomed ahead with a backlog of 502 plane orders to be delivered in the next 10 years. That is more than four times the order book of Boeing’s 130 planes. Primarily due to IndiGo’s order of last week of an additional 250 A320 neos. In 2011, IndiGo had ordered 180 A- 320 neos, whose deliveries will begin from October 2015.

• Flipkart closes India’s largest ever office leasing deal, signs up for a 3 million sq ft campus: Flipkart has closed India's largest office space leasing deal by signing up for a 3 million sq ft custom built campus in Bangalore with local builder Embassy group. The first phase of the new campus for Flipkart, which recently raised $1 billion in fresh funding, will be delivered by Embassy by early next year as an incubation facility for over 2,400 seats. The first campus at Embassy Tech Village on the Outer Ring Road in Bangalore will be delivered in January 2017 as a plug and play office. One million sq ft of office space seats between 10,000-12,000 people.

International:

• Toshiba in Pact with UTC to Strengthen Collaboration: Toshiba Corp has entered into a pact with United Technologies Corp (UTC) to strengthen strategic collaboration through their joint venture, Toshiba Carrier Corp (TCC). “The agreement outlines the next stage of cooperation between Toshiba and UTC in the field of heating, ventilating and air-conditioning solutions through TCC,“ Toshiba said in a statement on Sunday. The companies have set a target to accelerate growth and double the unit's USD 1.6 billion annual revenues by the next decade, it said. The companies will also explore new opportunities for overseas manufacturing in India and North America, it said. The deal will expand the venture's engineering and sales resources outside Japan and establish engineering centres in the United States and Europe, it added.

• Tomas Maier Opens New York Boutique: Last week, the designer quietly opened a boutique on the Upper East Side, his first in Manhattan, at 956 Madison Avenue between 75th and 76th streets. It showcases the designer’s expanded collection, which includes an enhanced assortment of women’s and men’s ready-to-wear as well as accessories, many created in partnership with longtime friends and collaborators of Maier. The unveiling marks a significant milestone for the 17-year-old brand and its trajectory after Kering formed a venture with the designer, who is also creative director of Bottega Veneta, one of Kering’s fastest-growing brands. “We wanted to open here for a long time,” Maier said on Friday morning. “In all the three stores we have had [Palm Beach, East Hampton and Miami, which has closed], we always had New York clients, so it was important to have a store in the city. Thanks to our joint venture, we are now able to do this.” The venue, featuring 2,800 square feet of selling space, was previously occupied by the DeLorenzo Gallery. The interior is modern yet warm, with oak display tables. Maier was keen to preserve many of the unit’s original elements. “I always liked this store,” he said of the unit, which dates back to 1925. “For me, it was important to keep the integrity and the details — such as the grilles, the metalwork, the door handles, the architectural elements — and then I started to look at the concept around that.”

• Acne Opens First Hong Kong Store: Located on Ice House Street in the city’s Central district, the 613-square-foot shop features a sampling of the Swedish fashion label’s collection, including men’s and women’s ready-to-wear collections, denim, shoes and accessories. Acne chairman Mikael Schiller said he was excited to have a stand-alone store in Hong Kong, which — along with New York — has always inspired him. “Hong Kong is a market that the world is looking at,” he said, adding that customers there are “sophisticated and demanding.” They are less interested in logos and pau more attention to small details, cut and fabric. The Hong Kong store opening is part of a partnership with I.T., which was instrumental in finding the Acne location and arranging the store opening, Schiller said. Acne has been selling through I.T. stores for about a decade.

• H&M Unveils Alexander Wang Look Book: Logo mania is back, courtesy of Alexander Wang’s collection for H&M, which features everything from T-shirts to bath towels emblazoned with his moniker. The Swedish high-street retailer on Friday unveiled the full look book for the women’s and men’s line, scheduled to go on sale on Nov. 6 in 250 stores worldwide as well as online. It marks H&M’s first collaboration with a U.S. designer. As previews indicated, an urban athletic vibe runs through the collection, which comes in a palette limited to black and gray, with the exception of a reflective silver down men’s jacket. There are 38 items for women, ranging from socks priced $17.95 and bra tops at $34.95 — both with a prominently positioned “WANG” or “AW” logo — to parkas and jackets that will retail for up to $349, including a motorcycle jacket made of quilted black leather.

• Morgan Stanley profits soar 87% as trading rebounds: US investment bank Morgan Stanley has posted an 87% jump in profits to $1.65bn (£1bn) in the three months to the end of September. Trading of currencies, commodities and bonds was a big driver of profits, as was wealth management - advising high earners on their finances. On Thursday, rival bank Goldman Sachs reported a 50% rise in profits. Banks' bond trading activities have reportedly benefitted from problems at bond giant Pimco. In September, trading superstar Bill Gross made a surprise exit from the world's biggest bond firm. The departure of Mr Gross from Pimco reportedly prompted investors to withdraw billions of dollars from the company, money which has found its way to other trading businesses. Morgan Stanley's total revenue for the quarter rose 12% to $8.91bn. Bond trading revenues were up 19.4% to $997m. Wealth management revenue rose 9% to $3.79bn.

• Business Jet Sales to Keep Rising but Some Purchases Delayed: Business jet buyers are expected to take delivery of as many as 675 new aircraft worth about $20.5 billion this year, a slight rise over deliveries worth $20 billion 2013, according to a forecast by Honeywell International Inc. The outlook for the next decade shows demand for 9,450 jets worth about $280 billion. That's up from 9,250 jets worth $250 billion in last years' long-range forecast, Honeywell said. But the global survey of 1,500 corporate flight departments, released on the eve of the National Business Aviation Association conference, found that companies had reduced their five-year plans to replace or add to their fleets, with the biggest demand change coming from the Asia-Pacific region. Corporate fleet managers, including governments and charter companies, plan to make new jet purchases over the next five years equal to, on average, about 23 percent of their fleets, down from about 28 percent in the 2013 survey, Honeywell said. Buyers in the Asia-Pacific region showed the biggest drop in buying plans, down about 12 percentage points, while buying expectations in the Middle East and Africa, Latin America, and North America fell by 8, 11, and 6 percentage points, respectively, the survey found. Plans by buyers in Europe, however, jumped 6 percentage points, despite the inclusion of Russia, where purchase plans fell due to economic uncertainty and sanctions. "Even with a lower purchase expectation from Russia, Europe was still up, which I think is a good sign for the Western European economies," said Brian Sill, president of business and general aviation at Honeywell Aerospace.

Tech:

• Google Nexus 9 listed on Play Store in India: Just a day after its global unveiling, Nexus 9 tablet has been listed on Google's Play Store website in India. However, the new Google phone, named Nexus 6, has not been listed on the site as of now. According to the listing, the 16GB Wi-Fi version of Nexus 9 costs Rs 28,900 in the country. The 32GB Nexus 9 variant with Wi-Fi and cellular has been priced at Rs 44,900, making it the most expensive Google tablet ever in India. There is no official word on when the tablet will be released in India, but sources have told TOI that Nexus 9 as well as Nexus 6 will be available in the country in November itself. Nexus 9, which is manufactured by HTC, has an 8.9-inch screen with 2048x1536p resolution and is powered by the 64-bit quad-core Nvidia Tegra K1 processor, clocked at 2.3GHz. It is the first tablet to run on Android 5.0 (Lollipop), the latest version of Google's mobile operating system. The tablet has an 8MP rear camera with LED flash and a 1.6MP front camera. According to Google, its 6,700mAh battery lasts up to 9.5 hours on a single charge.

• AOC to Launch Smartphones & Tablets in India: Taiwanese display maker AOC International will introduce smartphones and tablets in India, possibly before launching them in the global markets, as the company diversifies into one of the fastest-growing consumer goods categories in the country. AOC International will bring out two smartphones next month under the AOC brand in the RS 4,000 to RS 10,000 price range, Atul Jasra, business head for mobile phones and tablets, told ET. The company is entering the crowded but surging smartphone market in a segment where a majority of the devices are sold in the South Asian nation. Competition is intensifying in one of the fastest-growing smartphone markets worldwide where more than half a dozen international brands, including Chinese vendors, have entered over the year. Korea's Samsung dominates the market, ahead of giants such as Apple, Microsoft-Nokia, Sony and LG. Newer entrants such as Russia's YotaPhone and Finnish smartphone brand Jolla, both created by former Nokia veterans, are jostling for space with local brands, including Micromax, Karbonn and Lava, which cornered a combined 32% of the smartphone market by volume.

• Nokia to Focus on Growth in India: Officials: Bullish on India, Nokia is ramping up its operations in the country , focusing on its three businesses of network infrastructure, location intelligence and advanced technologies, top executives of the Finnish telecom and IT conglomerate said. “For us, India is one of Nokia's top 10 high-growth regions. The manufacturing operations, global delivery centres and research and development setups in India reflect Nokia Networks' unwavering focus on the country and enhanced proximity to its customers,“ Barry French, Executive Vice President, Marketing, Communications and Corporate Affairs, Nokia, said. “India is our largest country of employment. As a company, We are huge in India,“ French told PTI at Nokia's headquarters on the outskirts of the Finnish capital, Helsinki. “It is a great operation. We absolutely manufacture in India and we are always looking for opportunities to grow our manufacturing presence. We manufacture for e manufacture for the domestic and export market.This is another example of `Make in India',“ he said. “We have a history and depth in India that are very hard to match. If you look at 16,000 direct and indirect employees in the country . We have manufac turing, R&D, sales, global service centres in India,“ he added. With the closure of transaction to sell Device & Services business to Microsoft at end April 2014, Nokia is a newly energised company focused on building technologies for a connected world, he said on the reinvented Nokia's ambitions plans in India as well as globally.

• Intel Capital to Shift Focus on Deep Technology Sectors: Intel Capital India, the corporate VC arm of one of the largest chipmakers in the world, said it is shifting its focus back to deep technology sectors, such as internet-of-things platforms, gesture technology, cloud computing and wearables, after backing several ecommerce ventures in the country. The decision to switch lanes came about six-eight months ago, said Pradeep Tagare, director of Intel Capital in India. Last June, Intel created a $100-million (₹600-crore) global fund to finance perceptual computing projects, or those that use more senses like gestures and image recognition to interact with computers. “We are taking a step back from internet companies. We have a fair exposure in the internet space, and lots of capital is going into it,“ said Tagare, whose firm has invested in companies like trip planning website Yatra.com and online health store Healthkart, among others. The shift in thinking marks a change for the ecommerce-obsessed Indian startup ecosystem, which has seen at least $1.8 billion pumped invested in across 40 deals this year alone, according to Venture Intelligence. “The (ecommerce) ecosystem is well-funded,“ he said, adding that the firm would look at investing anywhere between $5 million and $10 million in hi-tech companies in the near future. Abhinav Aggarwal, cofounder of Trutech Webs, which sells gesture control technologies to Mukesh Ambani-led Reliance Games, Vodafone and others, said he noticed a similar sentiment from VCs.

• Microsoft Plans to Launch Smartwatch Within Weeks: Microsoft Corp. is preparing to launch a smartwatch within the next few weeks that will passively track a user's heart rate and work across different mobile platforms, Forbes reported on Sunday. The wearable gadget's battery life will exceed two days of regular use, Forbes reported, citing unnamed sources close to the project. It will arrive in stores soon after being unveiled in an effort to capture the holiday season, Forbes reported. Microsoft declined to comment. Apple Inc unveiled a smartwatch on Sept. 9 that will combine health and fitness tracking with communications and will go on sale in early 2015, while Samsung Electronics Co unveiled its Galaxy Gear smartwatch in September 2013.

• Yahoo’s Tumblr Teams Up With TV Shows to Reach Their Audiences: During last season’s finale of NBC’s “The Voice,” as a contestant belted out “Team” by Lorde, animated illustrations inspired by the lyrics swayed on the screens behind her. The graphics were created by Cindy Suen, an artist popular on Tumblr, the social media and blogging platform owned by Yahoo. “The Voice” placed Ms. Suen’s work center stage in an effort to reach Tumblr’s audience. This season, NBC has expanded its relationship with the site, allowing several of its bloggers backstage on the “Voice” set. Tumblr is a “very interesting piece of the puzzle” for the show’s fans, said Audrey Morrissey, an executive producer of “The Voice.” “Facebook and Twitter are very immediate,” she said, “but Tumblr is something they sort of take in and then create something about the show at times other than when the show is happening.” Yahoo is betting that Tumblr’s alliances with popular television shows like “The Voice” will help drive its growth. Still, 16 months after Yahoo paid $1.1 billion for Tumblr, the company’s investors are questioning the success of the acquisition.

• Smartphones Critically Important for 95% Indians, says Expedia Survey: Tech-savvy Indians have emerged as the most hooked on to gadgets globally with as many as 95% finding their smartphones “critically important“ while 75 % their smartphone or tablet to book a hotel, says a survey by leading online travel firm Expedia. “The findings clearly suggest an increasing dependency on the mobile platform. 95 % Indian respon dents feel that their smartphone is very or of critical importance to their daily life,“ Vikram Malhi, MD, Asia, Expedia said. He said Indians lead in app book ing and data roaming plans globally .“In fact, 75 % of Indians who have used their smartphone or tablet to book a hotel have booked a hotel stay using a mobile app (the highest of any country), he said. This survey was conducted from August 25 to September 17, this year among 8,856 employed adults aged 18 years of age and older across 25 countries. The survey highlights the maturation of Indian traveller who is fast moving up the ladder of travel apps and is no longer hooked with conventional modes of bookings, the findings said.