Daily News Digest- 10th Nov'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Flipkart may Fill Cart Again, With $1.5 B: India's largest online retailer, Flipkart, could begin another round of mega fund-raising as it expands its product range catering to a widening base of customers. The Bengaluru-based firm will seek funding of about $1.5 billion and has begun shortlisting potential investors, according to two people with direct knowledge of the developments. “Talks haven't begun yet and Flipkart is looking to target only a few investors that they want on board,“ said one of the two persons directly involved in the process. “The fund-raising process is expected to begin in January 2015.“ Flipkart, when contacted, declined comment on its fund-raising and investment plans. The company has raised a total of $1.2 billion this year and has just completed a round of festival sales marked by steep discounts. “At the pace at which it is making investments, Flipkart will deploy most of the funds it has raised by around mid-next year,“ said the source. Discounting still accounts for a chunk of Flipkart's monthly costs, with promotions costing it at least Rs 70 crore each month, according to a person who works with Flipkart at a strategic level. The company has also identified very specific areas to pump in money to ensure its goal of doubling in size by next year. Post the blockbuster festive season sales of October, when the company shipped around 80 lakh items versus 50 lakh on average, the company has revised its internal targets to reach sales of $4 billion by the end of the current fiscal, according to sources. A major area of focus is increasing the categories in which they have leadership. “It has built a lead in fashion with the Myntra acquisition. The same push needs to happen across categories,“ said Manish Saigal, managing director at advisory firm Alvarez and Marsal.

• Ferrari, Maserati Revving Up for a Return to India: Ferrari and Maserati will soon have their marketing and sales setups in place in India, as their Italian-American parent Fiat Chrysler Automobiles (FCA) Group wants to bring back these marquee brands that offer big opportunities in a market where the number of superrich is fast expanding. Maserati plans to open a national sales company in India and is in the process of appointing an eight-member team, say people with knowledge of the matter. After that, it would de cide on a dealership and, according to current plans, will start selling cars from the second half of 2015. Ferrari, which will manage its Indian operations from Dubai, is in discussions with Yadur Kapur, who is associated with Aston Martin, Lamborghini and Rolls Royce, to appoint him as its principal dealer in Delhi. In Mumbai, it is talking to Navnit Motors, which sells brands such as BMW, Land Rover, sells brands such as BMW, Land Ro and Rolls Royce. The plan is to offer cars from the first quarter of 2015.

• PepsiCo Elevates its Execs as CEO Bench Strength Dwindles: PepsiCo recently elevated three executives into bigger roles, marking the next wave of leadership at a company that has lost talent at the very top. Oswald Barckhahn, president of nutrition in North America; Laxman Narasimhan, CEO of foods in Latin America; and Mike Spanos, CEO of the greater China region, all were promoted in September. While none of the executives is yet seen as a successor to CEO Indra Nooyi, the company is trying to replenish its talent pool after a number of high-level departures. The most recent loss came this week, when PepsiCo disclosed that president Zein Abdalla, who'd been considered a contender to succeed Nooyi, will retire at the end of the year. Barckhahn, who previously served as senior vice-president of Tropicana North America and general manager for Central Europe, is now responsible for Quaker, Gatorade, Tropicana and Naked Emerging Brands. Narasimhan is now in charge of PepsiCo's food brands in Mexico, Brazil, Central and South America as well as the Caribbean, reporting directly to Nooyi.

• Xiaomi to Raise $1.5 B in Latest Fund Boost: Report: Xioami, currently the world's third-largest smartphone maker, is now planning to raise about $1.5 billion in its fifth round of financing, media reports said. The company which has dominated China's smartphone market is talking to investors and banks to roughly raise about $1.5 billion, which would be the largest investment (excluding IPO) raised by any Chinese company backed by venture capital, financial news website Jiemian of the Shanghai United Media Group reported. “Xiaomi shipped 18 million smartphones in the third quarter, an increase of 18 percent from the previous quarter. For the first nine months, Xiaomi, whose name means “millet“ in Chinese, shipped a total of 44 million units, Xiaomi founder and CEO Lei Jun said. Xiaomi, currently the world's third-largest smartphone maker after Samsung and Apple, will use $1 billion to expand its own TV content for which they have hired Chen Tong, former editor-inchief of popular news portal Sina.com, to revamp its Internet video business, Xinhua news agency reported. One of the investors is said to be DST Global, a London-based investment firm that focuses on Internet companies, Jiemian reported.

• Food Brands Serve it Hot Online and are Loving it: Hungry? If you have a smartphone, you can order a burger online and be rest assured McDonald's is lovin' it.But that's not the only chain that likes online orders. Domino's, KFC, restaurants like Mainland China and Punjab Grill and even local outfits such as Biryani Zone are pushing this route aggressively in an environment that continues to see sales and profits under pressure. Why? Online orders slash the cost of restaurant chains by half because they reduce the dependence on call centres as these are routed directly from the website to the relevant outlet. They are also more convenient as they allow customers to order from anywhere -on the move or unable to make a phone call. The restaurant chains add that orders through apps help them inform customers about offers, promotions and new menu items, not always possible when an order is placed by phone and is dependent on how effectively the call centre operator can communicate.

• AirAsia India joins fare war, offers one-way ticket at Rs699: AirAsia India on Sunday joined the domestic fare war, launching a week-long sale offer for its entire network with one-way tickets with prices as low as Rs.699, including taxes. The move came as part of its Malaysian parent company AirAsia Bhd presenting a ‘Big Sale’ with 3 million promotional seats on its network from Kuala Lumpur, with a starting fare of Rs.2,599 for international flights operated by AirAsia Berhad and Thai AirAsia, the airline said in a release. The Indian carrier is offering “an all-inclusive one way fare” starting from as low as Rs.699 for flights from Bengaluru to Chennai, Kochi, Goa, Jaipur and Chandigarh and vice-versa”. The Malaysian parent company’s offer of Rs.2,599 would be available on flights from Chennai, Kochi, Kolkata, Bengaluru, Tiruchirappalli and Hyderabad to Kuala Lumpur operated by AirAsia Berhad and Chennai to Bangkok flown by Thai AirAsia, the release said. The tickets can be booked on Airasia’s website from Sunday night till 16 November, for the travel period from 10 June next year to 17 January 2016, it said. AirAsia India chief executive officer (CEO) Mittu Chandilya said, “It is our constant endeavour to make air travel affordable for every Indian.”He said the Big Sale offer would “allow our guests to plan their travel early with extremely low fares”.

• India's top 30 enterprise software cos worth $6.2bn: Away from the e-commerce euphoria, there's a bunch of Indian software product companies that is bolstering the domestic startup ecosystem with impressive valuations of their own. The top 30 software product companies -catering largely to businesses (B2B) -have an estimated enterprise valuation of $6.2 billion (Rs 37,500 crore), according to a new index launched by Bangalore-based software product thinktank, iSpirt, the findings of which were shared with TOI. The list includes the likes of Eka, Pubmatic, Freshdesk, Druva, Zoho and Quick Heal, among others, that have been growing rapidly at a time when most of the spotlight has fallen on the astronomical valuations of a few domestic consumer tech firms. According to iSpirt's India Software Products Industry Index, as many as 27% of the top 30 most valued companies were headquartered in Bangalore, while 20% were in Delhi NCR, with the remainder spread across Mumbai, Kerala, Pune, Silicon Valley , London and Singapore. Together, these companies -mostly privately held -have 18,250 employees.

• Indian e-commerce market to reach $20 billion next year: Report: The e-commerce market in the country is expected to grow 37 per cent to reach $20 billion by next year on the back of growing internet population and increased online shoppers, a report has said. "E-commerce in India is a $11 billion market, and is estimated to reach $20 billion by 2015, growing at a CAGR of 37 per cent over 2013-15," Motilal Oswal Securities said in its report on e-commerce. The research firm said their are multiple enablers for this growth which include increase in the number of internet users and an increased proportion of online shoppers within those users, growth in the per-shopper transaction value and continued flow of capital by willing investors. The report said currently online travel dominates the e-commerce market but in the future, e-tailing will drive the growth. Online travel constituted 71 per cent of the e-commerce market in India, followed by e-tailing (16 per cent). Travel has grown at a CAGR of 32 per cent over 2009-13. "However, going forward, e-tailing will be the biggest growth driver, with expected CAGR of over 60 per cent to $7 billion in 2016 from $1.7 billion in 2013. Within e-tailing, fashion is likely to be the driving segment," it said. 

• Columbia Sportswear to open 25 stores in India by April 2015: US-based outdoor and adventure wear retailer Columbia Sportswear Company will open 25 stores by April 2015 in India against an earlier plan of opening up to 5 stores, as the demand for products has exceeded its expectations. Columbia Sportswear Company, which entered India through a distribution tie-up with Chogori India Retail Ltd, opened its first store on December 24, 2013, and at present has three stores in the country. "Earlier, we had planned to open 3-5 stores in the first year and depending on the off-take, we would plan further expansion. But, that 3-5 store plan has changed to 25 stores plan. We will have 25 stores by April 15. We will expand very fast in India," Chogori India Retail Ltd Vice President Khyati Bhinde told PTI.

• Carlson Rezidor plans over 50 Park Inn hotels in India by 2024: Global hospitality major Carlson Rezidor Hotel Group plans to open over 50 hotels under it's mid-scale brand Park Inn by Radisson in next ten years as it seeks to increase it's footprint in the country. The chain, which currently runs 73 operational hotels and has 37 hotels in various stages of development under brands Radisson Blu, Radisson, Park Plaza, Park Inn by Radisson and Country Inns & Suites By Carlson in India, will focus mostly on mid-scale hotels under management contract. "We will be having over 50 operational Park Inn by Radisson hotels by 2024. Of these, 5 hotels will be operational by the end of this year," Carlson Rezidor Hotel Group South Asia Chief Executive Officer Raj Rana told PTI. Seven Park Inn hotels are already under development and the company continues to sign more hotels under the brand throughout the country to add to the pipeline to ensure growth and operating strength, he added.

• Air India sets 2021 target for turnaround: The loss-making Air India Ltd may turn around by 2021, aided by a government bailout and several cost-saving and revenue-generating measures, a top official said. “There is a turnaround plan approved by the government. All the grants and financial assistance by the government are linked to achievement of turnaround targets. Roughly around 2021, we can expect the turnaround would be reasonably complete for Air India,” said Ravindra H. Dholakia, member, board of directors, Air India. Dholakia, talking on the sidelines of the 110th birth anniversary celebrations of industrialist J.R.D. Tata, said the airline’s performance has improved and is “improving steadily”. He, however, added that the environment has changed since the turnaround plan was approved. “Vistara (an airline floated by Tata Sons Ltd and Singapore Airlines waiting for final approvals) was not there when Air India prepared its turnaround plan. We did not know the dollar will go up to 60. But at the same time, nobody knew that jet fuel prices would go down,” Dholakia said.

International:

• Twitter opening office in HK despite China ban: Social media giant Twitter has said it will open an office in Hong Kong in the first quarter of 2015. The messaging service has been banned from operating in China since 2009 over fears that it could be used to organise protests against the government. However, Twitter said it wanted to tap into the next phase of its growth in the Asian region by expanding in Greater China. The office will house sales staff and joins the likes of Google and Facebook. "Our upcoming Hong Kong office in the first quarter will enable us to pursue strategic opportunities in Greater China, such as China export advertising market, Hong Kong and Taiwan advertising markets, media partnerships, and our new Twitter Fabric integrated with MoPub for mobile developers," the company told the BBC on Friday. The opening would be Twitter's fifth office in the region, with operations already in Singapore, Tokyo, Seoul and Sydney. In August, Twitter said it was opening an office in Jakarta, with Indonesia being one of its biggest markets. 

• Caterham F1 crowdfunding tops £1m as possible buy emerges: A crowdfunding project to raise funds for the stricken Formula One team Caterham has surpassed £1m in 48 hours. The administrator to the team also said that an unnamed "new financially-sound interested party" was considering acquiring Caterham. Finbarr O'Connell launched the crowdfunding to raise £2.35m in time for Caterham to race in the final grand prix of the season on 23 November. Mr O'Connell said the possible buyer emerged because of the fundraising. Crowdfunding works by people pledging donations or buying items linked to the company. Caterham is selling earplugs and badges and is offering people the chance to enter a competition to have their name on a racing car at the Abu Dhabi Grand Prix on 23 November - assuming the team finds enough money to compete. As of late Sunday afternoon, Caterham's crowdfunding website showed that it had raised £1.075m from 2,199 backers. However, Mr O'Connell's project has been criticised by some people in the sport, including F1 supremo Bernie Ecclestone, who say teams should not be funded via "begging bowls".

• New B2B Marketplace Ordre.com Launches: This week, 2,650 retailers in 543 cities across 93 countries will each receive their password for a new online wholesale buying platform called Ordre.com. The pre-fall collections of up to 60 international designers will be loaded onto the Web site in the coming weeks. Headquartered out of Hong Kong, the invitation-only platform is the brainchild of Australian Fashion Week founder and former IMG Fashion Asia Pacific managing director Simon Lock, who spotted an opportunity in the burgeoning B2B wholesale buying arena pioneered by start-ups such as Joor and NuOrder. Early-stage investment has been led by Jefferies Hong Kong Ltd. chief executive officer Michael Alexander, who is also advising on Ordre’s Series A funding round, which Lock expects to close within weeks, bringing total funding to $10 million. Ordre’s point of difference, according to Lock: The e-commerce site is more curated and globally focused. Sitting alongside high-profilers such as Marni, Jason Wu and Jonathan Saunders is a raft of emerging talent from regional markets, including Australia’s Strateas Carlucci, China’s Helen Lee and Nicole Zhang and South Korea’s Kye, Heich es Heich and Kaal E.Suktae.

• Retailers Mull Whether Worth Ruining Thanksgiving by Opening: As the holidays near, retailers face a dilemma: Open on Thanksgiving and stand accused of ruining a national holiday or stay closed and risk losing sales. J.C. Penney Co., Staples Inc. and Macy’s Inc. are in the first camp, opening earlier this Thanksgiving in a bid to draw bargain hunters. Nordstrom Inc. and Costco Wholesale Corp. plan to remain shuttered, saying that their employees deserve time with their families. While each strategy carries risks, the Thanksgiving Day holdouts face the possibility that consumers will be tapped out by the time they finally open when the sun rises on Black Friday. The possibility is even more acute as the choppy economic recovery restrains Americans’ spending and the Internet lets them devise detailed plans for landing the best deals.

• Tom Doctoroff Releases New Book, 'Twitter Is Not a Strategy': Tom Doctoroff’s new book, “Twitter Is Not a Strategy: Rediscovering the Art of Brand Marketing,” is not so much an attack on one social-media platform as it is a rallying cry for the advertising industry to refocus on actual brands. Despite the title, Twitter isn’t a major subject of the book, due for release on Tuesday. Rather, it’s used as an example of the current compulsion of today’s advertising industry to embrace technological advancements and “big data” to the detriment of traditional brand-building principles. “The reason I wrote this book is that, ultimately, there is a big dilemma in our industry right now between traditional brand-building and mass media — what I call top-down marketing — and bottom-up marketing, which is fueled by consumer empowerment and technology. These things need to be brought into alignment; they need to work holistically together,” the author and chief executive of JWT Asia Pacific explained. For Doctoroff, the brand idea is sacred — whether it be Nike’s “Just Do It” or Kellogg’s “Breakfasts for Better Days” — but the idea itself is being drowned out by the clamor of newer-better-best engagement platforms.

• Borderfree Making Push Into China: Borderfree Inc., the platform that helps retailers and brands conduct international commerce, sees a big opportunity in China. Borderfree is collaborating with Alipay ePass in a pilot program with five major retailers, and has begun offering a Mandarin version of checkout. Borderfree has also added the UnionPay payment option, is in the process of launching S.F. Express, a delivery service, while continuing with DSL Express. According to Borderfree, S.F. Express, a local service, offers more coverage in China than DSL and at a lower price. With Alipay, China’s leading e-payments service provider, Borderfree is partnering through the holiday season with Bloomingdale’s, Macy’s, Ann Taylor, Saks Fifth Avenue and Aéropostale. 1The collaboration pairs Borderfree’s global e-commerce platform with Alipay’s ePass payments, logistics service and marketing in China. “Since we launched the business, we’ve been watching China carefully and as a small company, we have to evaluate where we invest,” said Michael DeSimone, the chief executive officer of Borderfree. “China was there, but we didn’t feel the opportunity was great for U.S. branded retailers. Over the past year our feeling has changed substantially.”

Tech:

• LG's phones are the first to get an Android Lollipop upgrade: So much for Google's Nexus phones being the first to get Android 5.0 Lollipop. LG has announced that it's rolling out the sweetened software upgrade to G3 users in Poland this week, ahead of seemingly every other smartphone on the planet -- yes, including the LG-made Nexus 4 and 5. As you might imagine given the timing, LG isn't reinventing the interface. Most of the improvements are either straightforward or under the hood, such as the new notifications and the ability to unlock your phone with nearby devices (such as an Android Wear watch). What about other regions and devices? Unfortunately, LG isn't saying just yet. It's promising more details soon, but the Polish update is likely a test run; the company wants to make sure there are no glitches before it commits to a worldwide release. Even so, the fast refresh is good news, whether or not you have a G3 -- it hints that at least some Android manufacturers have been using the Developer Preview to accelerate an otherwise lengthy upgrade process.

• Google in Race with Facebook, MS for a Slice of Digital: Drones, balloons or white spaces ­ what's best for highspeed Internet access in rural India? That's the choice that the government may be faced with. US technology giants are tripping over each other to get a slice of Prime Minister Narendra Modi's Digital India and Smart Cities projects. In less than three months, Google and Hewlett-Packard have followed Facebook and Microsoft to queue up in government office corridors to show off their technology wares, highlighting renewed foreign investor interest as India's economy recovers. Google, the owner of the world's largest search engine, has sounded out the telecom department about providing `inexpensive' Internet access across India through a network of helium-filled balloons, currently being tested for efficacy under `Project Loon.' The solarpowered balloons are being run as pilot projects in New Zealand, California and Brazil and are Google's answer to arch-rival Facebook's solar-powered drones. “Sundar Pichai wanted to meet telecom minister Ravi Shankar Prasad and discuss the matter personally but their travel dates clashed on Pichai's recent visit to India,“ a person familiar with the company's plans told ET. Prasad was in Germany during the visit by Indian-origin Pichai, a senior vicepresident at Google, who is widely seen as the second-most important man in the company after Chief Executive Larry Page.

• Uber Partners with Carmakers, Lenders to Help Out Cab Drivers: Taxi hailing app Uber is partnering with financial services firms and automobile manufacturers to launch a vehicle financing program for Indian cab drivers, intensifying competition in the taxi services aggregation market where its rivals already offer such schemes. Uber has partnered with lending companies including AU Financiers, Shriram Transport Finance and Toyota Financial Services, as well as automobile manufacturers like Mahindra, Maruti Suzuki, Tata Motors and Toyota. “With this programme drivers can own their own car in just a couple of days,“ said Allen Penn who heads the Asian operations at Uber.“By removing barriers to owning a car and providing affordable financing and approvals in a speedy manner, we anticipate to create thousands of jobs in India.“ Drivers interested in partnering with Uber can purchase vehicles with a down payment of as low as Rs 60,000 and at subsidised interest rates and financing terms. Uber said the drivers will need to be active partners on its platform with no other clauses attached to the scheme. “The drivers will continue to function as entrepreneurs and flexibility of working hours will continue, “ said Penn.

• SSTL to Foray into Online Video Gaming: Sistema Shyam Teleservices (SSTL) will shortly enter the PC-based online video gaming business to boost the youth connect of its MTS brand and push its India revenue from data services to over 50% from over 38% now. The Indian arm of Russian conglomerate Sistema JSFC will soon unveil India's first multiplayer online video gaming platform, christened GameGod, and set up dedicated servers in Delhi to enable the country's growing fraternity of gamers to instantly joust with global players around the world. “Tapping into India's embryonic online video gaming spectrum promises to increase MTS brand's appeal with the young Internet generation, crank up data consumption and drive up contribution of our annual non-voice revenues to over 50%,“ the company's chief marketing & brand officer Leonid Musatov told ET.

• Ride-sharing platform Tripda makes its US debut: After launching in several countries in the Americas and Asia over the past five months, ride-sharing platform Tripda announced it will be launching in beta form in the US this month. It’s starting by covering large cities in the Northeast and Midwest. While driving services have become increasing popular, Tripda isn’t a taxi platform like Lyft or Uber. Instead it matches passengers to drivers who already have travel plans, to let them take advantage of empty seats in their vehicles. These are often longer-distance trips – think a few hours- rather than the short drives you’d usually get with a taxi. The app includes a verification service for drivers and passengers to help keep both parties safe, including a “ladies only” option for women. A ratings system also helps establish trust between drivers and passengers. Tripda is launching Boston, Buffalo, Chicago, Cincinnati, Cleveland, Detroit, Indianapolis, Milwaukee, New York City, Philadelphia and Washington DC with more cities said to be coming soon.