Daily News Digest- 31st Oct'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• It's a Deal: New Law may Help you Sue Etailers from your City: Unhappy with your online purchase and want to take legal action against the seller? You will soon be able to do it from your home city, rather than go where the seller is based. To help customers, the government is planning to revamp the Consumer Protection Act in the forthcoming winter session of Parliament to allow `territoryfree' legal action against any goods or service provider. Under the cur Under the current rules, a consumer can initiate legal action against a seller only in the place where transaction takes place. “The current restriction of jurisdiction cannot work in an e-commerce environment....We are looking at changes in the consumer protection act to ensure it addresses these issues,“ a senior government official privy to the deliberations on the issue told ET. The ministry of consumer affairs is working on this revamp to safeguard interest of consumers in a world where shopping is not constrained by geography. The existing law, which came into being in 1986, cannot effectively deal with challenges posed by new economic, business and technological developments. “Technology has erased geographic boundaries... For effective consumer protection it is essential that new law addresses these challenges,“ the official said.The new provisions will cover both goods and service providers but only those that operate physically from the Indian soil. The new law would cover not just vendors in online space but also marketplace providers such as Amazon and Flipkart.

• Luxe Brands Take Legal Course to Curb e-sales: In the nascent market for luxury goods, international brands are taking steps to protect their turf from alternative platforms, mostly online marketplaces, which offer, what they claim, are genuine bags, shoes and clothing at as much as half the price of products sold at exclusive retail stores here. A few online portals have emerged in the recent past in India, selling products ranging from Alexander McQueen dresses to Fendi bags at “highly competitive prices“ on the back of “intelligent and legal business models“. One such website, Darveys.com, has caught the attention of brands such as Jimmy Choo, Judith Leiber and Christian Louboutin, which have initiated legal proceedings against the startup to stop it from selling their products online in India. Fashion houses are not only going after such businesses but also alleging they could be selling fakes or second-hand products. Luxury French shoe and bag designer Christian Louboutin has filed a case against Darveys.com for “infringement of trademarks, publicity rights, passing off, unfair competition, dilution, damages, rendition of accounts and delivery up against the defendants“. Genesis Luxury, which has the exclusive rights to market Jimmy Choo shoes in India, has also taken similar action.When the Indian partner of high-end clutch brand Judith Leiber noticed that the bags were being sold on the same platform at a much lower price, it informed the parent company and took stock of the situation.

• Offline Retailers to Protest Predatory Pricing of E-tailers: |Brick-and-mortar mobile phone retail stores are set to raise their protest pitch against what they call predatory pricing of online retailers, but their efforts to put pressure on the government to step in received a setback as most large retailers aren't keen to join in. The All India Mobile Retailers Association, comprising mainly smaller mobile phone retailers, will hold a protest rally in Central Delhi on Friday along with retail associations of other businesses that are facing similar pricing threats, seeking government intervention to protect their livelihood. Larger format retail stores, however, aren't participating, taking the edge out of the protests. “Online retailers engage in unethical practices by offering far lower prices than offline trade, and these practices are going on unchecked,“ said Dheeraj Malik, the association's secretary general, who added that the fear was not limited to small stores selling mobile phones, but large sections of retailers selling apparel, footwear, kitchenware among other products as well. The association wants to attract the government's attention and is demanding formation of a regulatory authority to overlook India's $500-billion retail industry, which also includes large format retailers. While some surveys have found that offline retailers sometimes give better discounts than online sellers like Amazon, Flipkart and Snapdeal that attract customers with year-round sales and deep discounts, Malik said that on the whole, the mom-n-pop shops would not be able to compete in the long run.

• After Amazon caution, Biyani calls for clarity on retail laws: A day after American e- commerce giant Amazon expressed concern over “ substantial uncertainties” in interpretation of Indian laws in a regulatory filing to the US Securities & Exchange Commission, Kishore Biyani, Chief executive officer ( CEO) of home- grown Future Group, sought clarity in retail sector policy. Sources in Amazons India office however indicated the company was here to stay and that too much was being read into its regulatory filings. “The laws are very ambiguous for both physical and online retailers. Multi brand retail is quite a faulty word as it does not exist anywhere else in the world. In e- commerce, most players have gone for the marketplace model,.... but I think we need clarity,” Biyani said. Future, which recently tied up with Amazon in India to sell its fashion and food products exclusively on the American giant’s marketplace platform, is looking at a gross merchandise value of about ₹ 6,000 crore in the next three years from the venture. On Wednesday, Amazon had said it sees “ substantial uncertainties” in interpretation of Indian laws, which could impact its business in the one of the worlds fastest- growing multi billion dollar online shopping market, in its SEC filing. The statement is of significance as this is the first time Amazon has spoken out about difficulties in operating in India. The company has been expressing concern over China regulatory environment for long in its filings. Amazon CEO Jeff Bezos, during his recent visit to India, had said his company had not encountered much difficulty in doing business in the country. When asked specifically about the taxation issue in Karnataka that ecommerce companies including Amazon were facing, Bezos had said every country has its unique environment and that Amazon must embrace that to innovate and grow. He had added that Amazon was a long- term player and was here to stay. Bezos had also met Prime Minister Modi before flying back to Seattle.

• Delivery firms gain as Indian e-commerce space rakes in investments: From Japan's richest man to Jeff Bezos, everyone wants a piece of the country's booming e-retail sector. For those without billions to pump into the tightly held firms who dominate the e-commerce segment, the best bet may be the delivery men. On Tuesday, SoftBank Chief Executive Masayoshi Son joined Bezos' Amazon.com in pledging heavy investment in the domestic e-commerce industry, which is worth US $10 billion and is seen quadrupling in five years. Son bought stake in Snapdeal, the country's third-largest online marketplace. Yet the little-known firms that deliver goods ordered online are already raking in rocketing earnings from online retail in the country, which has the world's third-biggest Internet user base, and they are listed. Shares in companies like Transport Corp of India and Gati have surged more than three-quarters in 2014 as industry watchers seek a chance to invest. "When you see the limitless growth in the e-commerce sector, you do want to get involved," said Eric Mookherjee, a Paris-based fund manager at Shanti India, whose holdings include Transport Corp. "The next Alibaba or Tencent can be created in a country whose population is roughly similar to China. You will get that in India."

• Coming Soon: Dabur Chyawanprash in Biscuits and Bars: Dabur will soon roll out Chyawanprash in biscuit and snack bar variants as part of its bid to make the `traditional' brand appealing to young consumers and make the 130-year-old company `future ready'. KK Chutani, chief marketing officer and executive director for consumer care business at Dabur, said the company plans to modernise its over half-a-century-old brand Dabur Chyawanprash, along with other brands in its portfolio such as Hajmola digestive candy and Pudin Hara. While biscuits is an over ₹10,000 crore category with Parle and Britannia leading it, snack bars as a category has not yet picked up in the country. Dabur dominates the ₹550-crore chyawanprash category with close to 65% share followed by Emami. While the category has been growing 10%-12% a year, with its brown sticky appearance, chyawanprash has a non-contemporary feel. Dabur and Emami have always been trying to make it more appealing to consumers. Between the two brands, some of the biggest names in the entertainment and sports world, including Shah Rukh Khan, Madhuri Dixit and MS Dhoni, have endorsed chyawanprash.

• Harley-Davidson Expands Portfolio with 3 New Models: Harley-Davidson on Thursday expanded its portfolio in India by launching three new bikes . 49.23 -CVO Limited, priced at lakh; Breakout, at ₹16.28 lakh and Street Glide ₹29.70 lakh (ex-showroom, New Special, at Delhi). Harley Davidson India now has a product line-up of 13 models in the market, MD Anoop Prakash said. Of the three new models, Breakout would be assembled at the company's Bawal manufacturing facility in Haryana.

International:

• Apple’s Tim Cook says he’s proud to be gay: Throughout my professional life, I’ve tried to maintain a basic level of privacy. I come from humble roots, and I don’t seek to draw attention to myself. Apple is already one of the most closely watched companies in the world, and I like keeping the focus on our products and the incredible things our customers achieve with them. At the same time, I believe deeply in the words of Dr. Martin Luther King, who said: “Life’s most persistent and urgent question is, ‘What are you doing for others?’ ” I often challenge myself with that question, and I’ve come to realize that my desire for personal privacy has been holding me back from doing something more important. That’s what has led me to today. For years, I’ve been open with many people about my sexual orientation. Plenty of colleagues at Apple know I’m gay, and it doesn’t seem to make a difference in the way they treat me. Of course, I’ve had the good fortune to work at a company that loves creativity and innovation and knows it can only flourish when you embrace people’s differences. Not everyone is so lucky.

• Wal-Mart tests matching prices with online rivals: Wal-Mart Stores Inc. is considering matching online prices from competitors such as Amazon.com, raising the stakes for the holiday shopping season. The world's largest retailer, based in Bentonville, Arkansas, has matched prices of local store competitors but has not followed other retailers including Best Buy and Target in matching prices of online rivals. But last month, Wal-Mart started to test the strategy in five markets: Atlanta; Charlotte, North Carolina; Dallas; Phoenix; and northwest Arkansas. The move was first reported by The Wall Street Journal on Thursday. Wal-Mart is trying to rev up sluggish sales in the U.S. as it battles competition from online retailers, dollar stores and drugstores. At the same time, it's also dealing with a slowly recovering economy that hasn't benefited its low-income shoppers. As a result, Wal-Mart's U.S. namesake stores, which account for 60 percent of its total business, haven't reported growth in a key sales measure in six straight quarters.

• Alibaba plays trademark card to protect lead as China's $8 billion e-commerce spree nears: A trademark spat between Chinese e-commerce giant Alibaba Group Holding Ltd and rival JD.com flared into public view after JD published an Alibaba letter urging publishers to be careful about advertising in promotions for China's annual "Singles' Day" spree, the world's largest online shopping day. In the letter, dated October 16 and published on Thursday on a JD social media account, Alibaba's Tmall.com marketplace warned Chinese publishers against running ads with the "Double Eleven" motif that are not official Alibaba promotions. The slogan has become a well known reference to Nov. 11, when Singles' Day takes place each year, encouraging unattached consumers to buy goods as gifts for themselves. Tmall said in the letter that "Double Eleven" is a registered trademark. According to research by Reuters, in 2013, Alibaba registered at least six trademarks associated with "Double Eleven" with the State Administration of Industry and Commerce.

• Former Android boss Andy Rubin is leaving Google: Today, Google executive Andy Rubin told his team that he was leaving the company as first reported by the Wall Street Journal. Rubin joined Google when the company bought Android in 2005. In 2013, he left the Android division and went on to head the company’s robotic division. According to the WSJ, Rubin is starting a hardware incubator for startups. In a statement to TNW, Google CEO Larry Page said, “I want to wish Andy all the best with what’s next. With Android he created something truly remarkable—with a billion plus happy users. Thank you.”

• Wal-Mart: US retail giant to close 30 stores in Japan: The world's largest retailer Wal-Mart is closing 30 stores in Japan, the company has announced. The US retail chain said it would shut 30 underperforming stores to improve profitability of its business in the world's third largest economy. The stores operate under the Seiyu brand and account for 7% of Wal-Mart's 434 stores in Japan. News of the closures came after it cut its full-year profit forecast in August due to higher costs and investments. The retailer also announced plans to re-model about 50 existing Japanese stores next year and invest in online shopping. "The company will focus resources on driving continued strong performance in locations that are convenient for customers and allow for an improved shopping experience," Wal-Mart said in a statement. Wal-Mart entered the Japanese market in 2002 through an investment in the then struggling Seiyu supermarket chain and ended up taking full control of the company six years later. It had been expanding at a fast pace in the last two years, but Japanese shoppers have been slow to embrace Wal-Mart's low-cost model. The retailer has also struggled to see growth in its US home market recently, reporting flat same-store sales in the second quarter - marking the sixth quarter of declines or no growth.

• Starbucks sales disappoint investors: Although the world's largest coffee chain increased sales by 5% in the three months to 28 September, that was below analysts' forecasts. The company said food and tea sales were strong in its main US market. With rivals such as fast food chains offering more coffee drinks, Starbucks is increasing its product range. During the three months Starbucks made profits of $587.9m (£367m) on revenues of $4.18bn. "We grew traffic, but it was at a bit of slower clip," said Troy Alstead, Starbucks' chief operating officer. Starbucks said it was rolling out its mobile ordering and payment system nationwide next year. Mobile payments now account for 15% of all transactions at outlets in the US. The company is also investing heavily in promotions, including "Starbucks for Life" passes. The figures came on the heels of disappointing news from breakfast rivals McDonald's and Dunkin' Donuts parent Dunkin' Brands.

Tech:

• iPhone 6 Supply Dries up as Stocks Flow Elsewhere: Apple's new flagship iPhone 6 is facing a stock-out in India with the US firm diverting supplies to select markets such as China, where there's an unprecedented demand, and to build up stocks for Black Friday shopping on November 28. As a result, several large retailers and Apple exclusive stores have stopped booking of iPhone 6 and iPhone 6 Plus. “With Apple's distributors failing to commit on supplies after the launch, we have stopped ad vance booking to avoid any confrontation with customer,“ head of a big electronics retail chain said on condition of anonymity. Three senior executives of Apple's trade partners in India said iPhone 6 supplies have become erratic in last two weeks with only an estimated 15,000 units coming in phases. During the midnight launch on October 17, Apple had shipped around 55,000 units of the new iPhones to India. Supplies of 64 GB variant of iPhone 6 and 6 Plus ­ which is the most in demand ­ is the least, the executives said. According to industry sources, Apple India management has re portedly warned the Cupertino, California headquarters that if supplies do not regularise, it may become an uphill task to beat last year's record sales of two lakh units of the then new iPhone 5s and 5c during the October-December quarter.

• Xiaomi Becomes No. 3 Vendor in Just 3 Years: China's Xiaomi has become the world's third-largest smartphone vendor just three years after first hitting the market, trailing only Samsung Electronics and Apple, according to a new industry study. Strategy Analytics said Xiaomi accounted for 6% of all 320 million smartphones shipped during July-September. Samsung made up 25%, down from 35% a year earlier due to rising competition from several directions. Apple's share also fell slightly to 12%. “Xiaomi was the star performer,“ Strategy Analytics executive director Neil Mawston said in a statement.

• MS Launches Wearable Fitness Device for $199: Microsoft launched a device called “Microsoft Band“ that will allow users to monitor their fit ness and exercise regime, marking the software company's debut into the wearable technology market. The device has sensors that monitor pulse rate, measure calorie burn and track sleep quality. Microsoft said the device will be available in the US in limited quantities from Thursday for $199. Microsoft also launched a health app called “Microsoft Health“ that includes a cloud service for users to store and combine health and fitness data.

• Lenovo No. 3 in India After Motorola Acquisition: China's Lenovo completed its $2.9-billion acquisition of Motorola Mobility on Thursday, making the Lenovo-Motorola combine the third largest smartphone entity in India, one of the fastest growing smartphone markets in the world. “Motorola and Lenovo together would be No. 3 in the market (India) which would be the case in many markets that both brands operate,“ spokespeople from both companies said in a conference late Thursday evening. Lenovo and Motorola together form the third largest smartphone player worldwide, according to data from research firm IDC pushing rival Xiaomi from the No. 3 position down to No 4. IDC worldwide smartphone data showed Samsung leading with 23.8%, followed by Apple with 12%, Xiaomi with 5.3% and Lenovo following closely with 5.2%, and LG at No. 5 with 5.1%. “Lenovo has a very good smartphone business in India through the offline channel. Motorola is present only on line. It's a good combination,“ Liu Jun, Lenovo executive vice president and president of Lenovo's Mobile Business Group said. “Lenovo will continue with the same market plan in India, which is an important target market,“ he added. In India, Motorola is the fifth largest smartphone maker in India with 5% share of the segment as of June data from research firm IDC. Since its resurrection early this year, Motorola has sold more than two million smartphones, including the Moto G, Moto X and Moto E, at competitive prices.

• Self-drive Car Sharing Zoomcar Raises $8 M Venture Funding: Self-drive car sharing company Zoomcar has raised $8 million (about ₹48 crore) in a funding round led by US-based venture fund Sequoia Capital. The Bangalore-based company said several new investors, including former Infosys CFO Mohandas Pai and Manipal Group's head of corporate affairs Abhay Jain, participated in the round. Many of the company's early backers, such as angel investors Empire Angels, FundersClub and Basset Investment Group, and funds advised by Triangle Growth Partners, also raised their stake in this round. Zoomcar said it will invest the funds in technology , hiring and for launch in new cities over the next one year. “We look at being the one stop shop for personal transportation,“ said David Back, co-founder of Zoomcar. “Cities that we have shortlisted to launch include Delhi, Mumbai, Hyderabad, Chennai and Goa.“ Zoomcar has so far raised about $11 million. The company has a fleet of over 250 cars and is present in Bangalore and Pune.

• Data drives Bharti Airtel’s Q2 earnings: Bharti Airtel Ltd’s profit more than doubled in the fiscal second quarter as India’s largest communications services provider benefited from a surge in mobile data consumption and lower finance costs and investment losses. Profit rose to Rs.1,383 crore in the three months ended 30 September from Rs.512 crore a year earlier, the company said on Thursday. Revenue rose 7.1% to Rs.22,845 crore from Rs.21,324 crore, The profit and revenue figures were slightly above market expectations. Bharti Airtel had been expected to post a profit of Rs.1,300 crore on revenue of Rs.23,280 crore, according to a Bloomberg survey of 24 analysts. After 15 consecutive quarters of falling net profit, it’s the fourth straight quarter that Bharti Airtel has posted a profit increase, confirming that it’s in the midst of a turnaround, helped by greater focus on operational efficiencies, the return of pricing power with the end of intense tariff competition and a surge in data revenue. Consolidated mobile data revenue rose 66.7% to Rs.2,540 crore from the year-earlier period, making up two-thirds of the telco’s incremental earnings for the quarter.

• Instagram Video Ads are Rolling Out Today: Instagram has been serving up ads for a while already in some markets, but now it’s officially rolling out video ads too as expected. As AdWeek reports, the Facebook-owned platform has inked deals to display 15-second skits from a number of big brands, including Disney and Banana Republic. The ads will be appearing from today, and will be rolling out to everyone in the next few weeks.