Daily News Digest- 7th Nov'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• SoftBank Invites Three Indian Startups to Tokyo: Japan's SoftBank has invited three Indian startups to travel to Tokyo later this month to continue negotiations that could lead to a round of funding, said three people directly aware of the developments. Online furniture retailer Urban Ladder, fashion portal Yepme and low-cost tablet maker Swipe were among 15 companies that met with SoftBank chairman Masayoshi Son and vice chairman Nikesh Arora during their visit to India last month. “These three companies have been chosen to visit Tokyo for the next round of negotiations,“ said a source, adding that no firm dates have been set for the proposed meeting. SoftBank declined to comment. Son, who last month had said his group would invest up to $10 `61,000 crore) in Indian billion (.companies in the next few years, appears to be moving swiftly. During their time in India, Son and Arora announced two investments ­$627 million in online marketplace Snapdeal and leading a funding round of $210 million in taxi services aggregator Ola. “SoftBank has been focused on fast-growing sectors and has chosen to go global, which is smart and allows them to deploy lots of capital while not dramatically increasing risk,“ said Kartik Hosanagar, professor of ecommerce at The Wharton School. “A calculated approach and sector experience helps a lot.“ Son and Arora met several entrepreneurs from a number of sectors including technology , ecommerce and telecom. “The difference between India and advanced countries won't be that much when it comes to technology platforms. It is a great opportunity here,“ Son told ETin an interview during his visit.

• India seeks global e-comm tax rules: The government is pushing for a new tax regime for global e-commerce firms, a move that will come as a blow to several global giants that are taking advantage of the current rules to avoid paying taxes. India has already flagged the issue ahead of the G20 meeting in Brisbane next week, which will be attended by Prime Minister Narendra Modi. “We have submitted a paper... The principles have to be laid down and e-commerce may be covered,“ said Suresh Prabhu, the sherpa for the G20 talks. He said that taxation of e-commerce was a complicated issue as the lo gistics, production and consumption may take place in different parts of the globe. India has raised the issue at a time when the world's 20 most powerful economies are discussing a new global order to tax multinationals, who avoid paying any levies by using complex corporate structures and tax treaties.While a formal launch to Base Erosion and Profit Shifting is expected to be en dorsed in Brisbane, India is looking at e-commerce as a key takeaway , said an official involved with the dialogue. While automatic exchange of information to help recovery of black money is the other issue on the agenda, India is unlikely to face any embarrassment at the summit despite New Delhi not signing an agreement in Berlin next week due to the Supreme Court's observation on the confidentiality clause. An official said apart from India, several of the “early adopters“ have not signed the treaty so far. “We remain committed to it and there is time since we need to take domestic approvals,“ the officer said. But a major gain for India will come in the form of an endorsement to the country's demand for lower charges on remittances.Prabhu said that in some countries, the charges were as high as 10%, which reduced the amount transferred by workers living abroad. “There is some understanding on a levy of around 5% and Saudi Arabia has agreed to reduce it to 3.5%, which will benefit poor workers the most,“ he said.

• Alibaba-backed co buys desi startup: Barely a month after internet giant Yahoo acquired Bangalore startup Bookpad comes yet another similar acquisition. Chinese e-commerce behemoth Alibaba Group-backed Quixey is acquiring Bangalore-based mobile application startup Dexetra. The deal is said to be valued at $10-15 million (Rs 60-90 crore). Quixey , a US-based mobile app search engine, will set up a Bangalore office shortly and all 15 employees of Dexetra will be part of its India oper ations, said sources familiar with the development. Software products think tank The Indian Software Products Industry Roundtable (iSpirt) is said to have facilitated the deal. Sanat Rao, partner M&A in iSpirt, declined to comment. Quixey , founded in 2009 by Tomer Kagan and Liron Shapira, helps people to search through the clutter of mobile, desktop, web, and browser apps.Quixey partners with major app stores, search engines, manufacturers, carriers and web platforms to power app search globally. Last year, the US star up raised $50 million in a round ed by the Alibaba Group. The ompany has raised $74.2 mil ion to date. When TOI contact d Quixey, the company's global ommunications head Lara Sasken said, “I cannot confirm his information.“

• ‘India will be among our largest markets globally’: Burger King: Burger King, the world’s second largest burger chain after McDonald’s, is aiming for growth without a “ ceiling” in India as it prepares to open its first store in the country here on Sunday. Burger King India chief executive officer Rajeev Varman told Business Standard the Miami- based chain does not see a limit or a ceiling to the growth potential in India, as the “ big numbers reflect”. It has joined hands with private equity major Everstone Capital for India entry. The plan is for 12 stores in the next two to three months. “As the concept of Burger King comes in, there will be more exposure and the market will grow further. India as a market has no ceiling right now and that’s what the big numbers reflect. There is no ceiling as far as our brand is considered. We just need to be sure that we don’t do just a load of restaurants but profitable restaurants,” Varman said on Thursday. The company plans to expand in Delhi and Mumbai initially, as it feels these are the key markets to get a firm foothold in the country. This would be the 100th country for the chain. It recently entered China and Pakistan. Pricing in India will be competitive, keeping in mind its major rival, McDonald’s. The burger quick service restaurant (QSR) market is about two per cent of the overall QSR market. According to trade estimates, the QSR market is expected to double by 2018 to ₹ 26,000 crore, through domestic and global entities. Explaining India’s importance from the global perspective of Burger King, Varman said India would be one of the largest in Asian markets. “ In the long run, it is going to be one of the largest globally. In fact, it was mentioned in our recent earnings call as well. So, the company sees India as one of the biggest opportunities.” He said an annual compounded growth rate of 35- 40 per cent is expected by the company.

• Starbucks Outshines Coffee Chain Rivals in First Full Year in India: Starbucks, the world's largest coffee retailer, posted nearly three times more per-store sales than established rivals in India in its first full year of operations in the country. Tata Starbucks, a joint venture between Starbucks and Tata Global Beverages, generated total revenues of ₹ 95.42 crore in the year ended March 2014, according to its annual report filed with the Registrar of Companies (RoC) on Thursday. With 43 stores until March, a backof-the-envelope calculation shows that each Starbucks shop sold coffee, snacks and merchandise worth over ₹ 2.2 crore last fiscal, significantly higher than the per-store sales of other coffee chains. Amalgamated Coffee Bean, which runs the country's top coffeehouse chain Cafe Coffee Day, hasn't disclosed its latest financials yet. For 2012-13 it had revenues of ₹ 1,126 crore including income from its plantations business and sales through 1,400-odd cafes. That translates into not more than ₹80 lakh annual sales per store. Starbucks' per-store sales is, however, a tad lower than Jubilant Foodworks that runs over 752 Domino's Pizza outlets and Dunkin Donuts and clocked sales of ₹1,732 crore last fiscal, which means ₹ 2.3 crore per outlet on an average. While the company didn't comment on financial details, a Tata Starbucks spokesperson said it is humbled by how Indian customers have embraced the Starbucks experience in the two years they have been in the India market. “We believe that over the long-term, India will be among the top 5 markets for Starbucks,“ said the spokesperson. Starbucks currently operates 59 stores in the country and plans to close the financial year with 90 doors. Over last year, the coffee chain has more than trebled its authorised capital to ₹220 crore. The company may not be able to keep up its high per-store sales as it opens stores in suburbs and towns where most consumers may find Starbucks pricey. Hence, it plans to open many stores that will nearly be three times smaller than its first few stores or half the size of average existing cafes.

• Good Sales No Relief for Birla Retail: Aditya Birla Retail, an arm of the Aditya Birla Group, has piled up losses of nearly ₹ 4,800 crore after seven years of operation, even as bigger rival Reliance Retail turned profitable. ABRL's filing with the Registrar of Companies last week shows its losses widened to ₹ 596 crore for the year ended March 2014 from ₹ 510 crore in the previous year, though sales more than doubled to ₹ 2,510 crore after the company merged its arm, Trinethra Super-retail, with itself. The company, which owns includes department store chain Pantaloons, apparel maker Mudra Fashion and Lifestyle, and supermarket chain More, now has accumulated losses which includes the ₹4,745 crore, of book value of Trinethra Retail along with investments and costs of building retail infrastructure. “These are not operating loss but our investment over the years. The accumulated losses reflect initial infrastructural investments, cost of store closures, goodwill on acquisition of Trinethra and Fabmall and interest cost on borrowings. At store operating level, we are already profitable and EBIDTA positive is just a year away,“ said Pranab Barua, Aditya Birla Group's director for retail and apparel business.

• Coke May Launch Fizzy Fruit Drink by Next Summer: Less than two months after Prime Minister Narendra Modi urged cola companies to add fruit juice in their fizzy drinks, Coca-Cola has already started working on such a beverage that it plans to launch by the next summer season, two people aware of the development told ET. The new drink, under wraps still, is being developed entirely in the country , they said. “A series of variants are being researched on a priority basis.The firm is clear it wants to bring in fruit-based drinks hopefully before next season kicks in,“ one of them said. A Coca-Cola spokesperson declined to comment. The Prime Minister had urged Coca-Cola and PepsiCo to blend their aerated beverages with fruit juice sourced from local farmers on September 24 while inaugurating Future Group-managed India Food Park in Tumkur, Karnataka. “We drink Pepsi, Coca-Cola...and I do not know how many similar beverages are available in the market. The trade runs into billions of rupees. I have asked the companies if they can blend 5% natu ral fruit juice in the beverages they make. I am not asking for much, if 5% of juice from fruits produced by our farmers is added, the farmer will not be forced to search for a market to sell. A single decision can ensure billions of rupees of trade,“ Modi had said.

• Struggling in India, Toyota said to ask Daihatsu minicar unit to help: Toyota Motor Corp. is struggling to crack the affordable end of India’s car market and has called on mini-car affiliate Daihatsu Motor Co. for help—a tacit admission that the Japanese autos giant doesn’t always get it right in emerging markets. A similar partnership between Toyota and 51%-owned Daihatsu has proved successful for years in Indonesia, Southeast Asia’s biggest car market—though that crown may be slipping now. Toyota executive vice-president Yasumori Ihara asked Daihatsu management earlier this year to help design affordable small cars suited to buyers in India, where Toyota models tend to come with a relatively high price tag, said four Daihatsu executives and a Toyota executive with knowledge of the matter. The request could see Daihatsu take the lead in developing no-frills cars that would be sold under the Toyota name and through Toyota’s sales channels in India. Unlike in Indonesia, Daihatsu currently doesn’t sell cars in India.

International:

• Home Depot hackers stole 53 million email addresses: US retail giant Home Depot says hackers who stole payment-card details of millions of customers also stole 53 million email addresses. It said hackers accessed its network with a vendor's username and password between April and September. The company had previously revealed that 56 million debit and credit card details were also stolen in the hack. Analysts say it is one of the largest data breaches on record, surpassing a similar incident at retailer Target. Home Depot insisted on Thursday that the file containing the email addresses did not contain passwords or other sensitive personal information. But it warned customers to be on guard against further phishing scams that might trick them into sharing personal information. Customers that have been affected in the US and Canada will be notified and offered credit monitoring, the company added. The latest update came just weeks after Home Depot disclosed the data breach, saying 56 million credit and debit card details were taken.

• Chinese PC maker Lenovo reports 19% rise in profits: Chinese computer giant Lenovo has beaten expectations to announce a 19% rise in net profits for the three months to September. The world's biggest maker of personal computers reported profits of $262m (£163.8m) for the period. The firm said its revenue for the quarter also rose by 7% to $10.5bn, although that was below expectations. Lenovo shares fell on the news, but the results mark a continued demand for the firm's PCs, tablets and smartphones. In October, Lenovo completed its takeover of Google's Motorola Mobility division, which gave it control of the unit's Moto and Droid-branded handsets, as well as 3,500 new employees, including 2,800 based in the US. 

• H&M Unveils New Paris Flagship: Hennes & Mauritz has a new beacon on the Left Bank, a burgeoning district for fashion retailers. The Swedish high-street retailer today opens a new flagship at 77 Boulevard Saint-Germain, a stone’s throw from the tourist and student enclave of Boulevard Saint-Michel, which it hopes will become one of its top revenue drivers in France. At around 27,000 square feet, the unit is the retailer’s second-largest in Paris. It also has one of the largest product offerings of any H&M store in France, with collections for women, men, juniors and children spread over three floors, and an expanded shoe selection for women and men. Thomas Lourenço, managing director of H&M France, said the store aims to attract local residents, students and tourists. “It’s an important store for us in terms of image, because it really represents the best of H&M,” he said.

• Adidas Puts Renewed Focus on North America: Adidas wants to get back its North American territory. The Herzogenaurach, Germany-based sporting goods company, which is facing negative sales growth in the region and struggling to stabilize its ailing golf business, said it was “intensifying efforts to revive momentum and growth in the U.S.” “We have made this market a key priority for all senior management in the company,” said Herbert Hainer, the group’s chief executive officer, speaking at a conference call on Thursday, following the announcement of Adidas’ third-quarter results. “We have carried out a significant change in leadership in our North American organization this year, stacking high-caliber talent from various parts of our group and adding key external talent, particularly in design,” he added, referencing the appointments of Mark King as president of North America and Ben Sharpe as ceo of TaylorMade-Adidas Golf in June. Adidas also has set up a new design studio in Brooklyn, N.Y., led by three design veterans recruited from Nike: Denis Dekovic, Marc Dolce and Mark Miner. Due to contract restraints, they will not take up their posts until the second half of 2015, Hainer specified on Thursday.

• Kazakhstan's Thriving Luxury Market Continues to Gain Steam: High above the smog of Almaty stands the 37-story Esentai Tower, providing unparalleled views of the snowcapped Tien Shan mountain range that borders Kazakhstan’s most populous city. Central Asia’s tallest building, which sits in an area often rocked by earthquakes, reflects both the ambitions of real estate developer Capital Partners and the country’s thriving market for luxury goods. The tower was designed by Skidmore, Owings & Merrill, the American architects behind the Burj Khalifa in Dubai. The mixed-use Esentai Park complex has brought an unprecedented level of opulence to the former Soviet city, from the Esentai Mall and its gleaming Louis Vuitton, Prada and Dior stores to the year-old Ritz-Carlton, Almaty hotel, not to mention the luxury condominiums that sold for $15,000 a square meter, rivaling real estate prices in the most coveted neighborhoods of Paris.

• Peter Pilotto and Christopher De Vos Hit Hong Kong: London-based designers Peter Pilotto and Christopher De Vos are in Hong Kong this week to showcase their spring/summer collection to VIP customers. To toast their collection, Joyce has set up a special window and in-store display at its flagship Central store. Besides numerous interviews, Joyce also planned cocktails and dinners for the week. Pilotto was also busy Instagramming on Joyce’s behalf as a #joyceguesteditor during his trip. “It’s such a thing that everyone is doing. You need to do it. It’s a fascinating tool and it’s also great to follow people,” the designer said. As for the city, Pilotto said, “Hong Kong is very fashion forward. A good match to our customers in other Western markets. The people are very international in their approach to wearing things. You don’t have to tweak so much. The Hong Kong woman is very modern and cosmopolitan. It’s always great to see how very formal people are here. It’s this combination of elegance and forwardness,” he added.

Tech:

• MS to offer Office free on mobiles: Few golden geese in technology have survived as long as Office has for Microsoft. The suite of applications that includes Word, Excel and PowerPoint, first released in 1990, generated nearly a third of Microsoft's revenue last fiscal -about $26 billion of $87 billion in total. But in a sign of the seismic changes underway in the tech industry , Microsoft, the world's largest software company , said on Thursday that it would give away a comprehensive mobile edition of Office. The free software for iPads, iPhones and Android tablets will do most of the most essential things people normally do with the computer versions of the product. Satya Nadella, Microsoft's new CEO, has pushed cloud and mobile computing as lodestars for the company's future. While sales of the software to businesses grew about 8% last year, consumer revenue rose only 2%. Sales declined by double-digit percentage points during the first two quarters of the year.

• Paytm aims to clock $1 billion GMV by March next year: Mobile commerce firm Paytm is aiming to clock $1 billion gross merchandise value (GMV) by March next year on the back of growing smartphone penetration and rising number of customers buying from e-commerce sites. "We believe by the end of current fiscal, we should be crossing $1 billion GMV," Paytm Chairman and Managing Director Vijay Shekhar Sharma told PTI. He said growth drivers for the company are smartphone and Internet penetration, besides rising number of consumers opting for purchases from online shops. The company has already crossed $600 million GMV. The company, which started by offering mobile recharge and utility bill payments, now offers a full marketplace to consumers on its mobile application.

•  Twitter open sources 872 emoji characters it designed with Iconfactory: After partnering with Iconfactory to design emojis for its web client, Twitter has decided to open source the entire cutesy library. Developers can grab the library from Github and start implementing the fancy little characters into their apps, sites and anywhere else you need a character of an ice cream cone next to sushi. Automattic, the makers of a little CMS known as WordPress, is already implementing the emojis into the content management system. While emojis are commonplace on mobile devices, today’s news means that you’ll start seeing them everywhere. Whether you like it or not.

• Google Drive for iOS Now Supports Touch ID: Today Google updated its Google Drive app for iOS 8 with new features including the ability to open drive with Touch ID, save videos from Drive to your device and improved app support for opening and saving files saved in the Google cloud. In a Google+ post, the company laid out the new features for the iOS version of Drive. While app support improvements are great, the added security of Touch ID as a passcode lock for the app is welcome news to anyone concerned about their data stored in the cloud. Both improved file support and Touch ID are iOS 8 only features. Saving video from Google Cloud to your iOS device is available for iOS 7 and up.

• You can now buy the LG G Watch R from the Google Play store: If you’re been wanting a smartwatch with a circular display, but the Moto 360 isn’t quite to your tastes, you can now get the LG G Watch R from the Google Play store. The watch costs $299 and comes in matte black with a steel frame and is the first wear watch with a fully circular AMOLED display (the Moto 360’s gets cut off at the bottom) . It’s available in the US now.

• Amazon introduces Echo, a voice-controlled assistant for your home: Voice assistants have started to gain traction thanks to the success of products like Google Now and Siri, but now Amazon is joining the fray with a completely different approach of its own, the Amazon Echo. Instead of being locked to your mobile device, Echo is a standalone speaker that’s meant to give you easy access to information such as the news and weather while at home (indeed, it needs to be plugged in to an outlet). It can also set alarms and timers, make lists or answer questions using sources like Wikipedia. It can also play audio from various sources, including Amazon Prime, iHeartRadio, and TuneIn. Alternatively, you can use Bluetooth to stream audio from your devices, like any other wireless speaker.

• Apple malware affects mostly Chinese users: Malware has bypassed Apple's safety controls by taking advantage of a process used by employers to add apps to workers' iPhones and iPads. US-based Palo Alto Networks said WireLurker appeared to have originated in China and was mostly infecting devices there. The malware first targets Mac computers via a third-party store before copying itself to iOS devices. Researchers warn it steals information and can install other damaging apps. "WireLurker is unlike anything we've ever seen in terms of Apple iOS and OS X malware," said Ryan Olson, Palo Alto Network's intelligence director. "The techniques in use suggest that bad actors are getting more sophisticated when it comes to exploiting some of the world's best-known desktop and mobile platforms." WireLurker has the ability to transfer from Apple's Mac computer to mobile devices through a USB cable.