Daily News Digest- 13th Nov'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• With $400 million, India is Uber-Cool: Taxi hailing app Uber could set aside nearly half the amount from a proposed round of funding to grow business in India, its largest and fastest growing market outside of the US. “Uber could invest over $400 million in India,“ said two people familiar with developments. “It is likely to use the cash to strengthen presence where it has a footprint, expand to newer cities and to aggressively hire,“ said one source. According to a report in the Wall Street Journal, Uber has informed its investors that it plans to raise more than $1 billion in funding which is likely to value the company at more than $30 billion. Uber did not reply to email queries from ET on the developments. The Indian taxi aggregation space has been the hub of frenetic action in recent months, with companies like Ola, TaxiForSure and Uber, competing fiercely for market share. In October, Japan's Softbank led a $210-million funding round in Ola. Experts are of the view that for Uber, India is an attractive market for the sheer scope that it offers for future growth. “The density footprint in Delhi or Bangalore is not even comparable to its fleet in say New York city . There is plenty of room for Uber to expand,“ said Arun Sundararajan, a professor at the Stern School of Business in New York whose research is focused on digital economics.

• Tatas Plans E-Marketplace Foray: Tata Group has started putting together a team for its proposed big-bang foray into e-commerce marketplace under Ashutosh Pandey, former COO of the Group's bookstore chain Landmark. The Group has also roped in Sarvesh Dwivedi, who has been heading the lifestyle division of eBay India, three people familiar with Tatas' plans told ET. Gurvinderjit Singh Samra, who has worked with Tata Group's different arms, including its life-science and healthcare unit, Titan and Indian Hotels, has joined the e-commerce team, two of them said. “Obviously there is a small team as things are currently being sketched,“ one of them said. Latif Nathani, managing director of eBay India, confirmed the departure of Dwivedi from the company, but said he is not sure where Dwivedi is headed. Prior to eBay, Dwivedi worked with Myntra.com and Reliance Retail among other firms. ET had in September reported that the Tatas are preparing for an entry into India's lucrative e-commerce business with a marketplace model similar to Flipkart, Amazon and Snapdeal. A spokesperson for Tata Sons said that the Group has “interest“ in e-commerce, but refused to share details for the proposed venture. “As we had told you on September 22, e-commerce is of interest to the Tata Group, and we will share more information at the appropriate moment,“ the person said in an emailed reply to ET. Tatas currently run e-commerce portals for its Croma consumer electronics chain and Landmark bookstores.Its proposed new e-commerce marketplace, which will provide an online platform for small and large vendors and retailers to sell their wares, is expected to be launched next year.

• Audemars Piguet to Step up India Play: Swiss luxury watchmaker Audemars Piguet (AP) plans to ramp up its marketing and advertising in India to reach out to customers who shop around the world, with a special focus on wooing women buyers. “The idea is to invest in marketing and branding to create generic demand for our watches and seduce them into buying not only in India but also while travelling abroad,“ said Antonio Seward, AP's general manager for Southwest Asia region. It is important to separate the Indian customer from the domestic market because Indians are increasingly buying in global centres such as Dubai, Paris and Hong Kong as well, he said. The strategy makes sense also because the Indian market presents a challenge owing to its protective regime and high import duties, he said, adding, “So for now the idea is to invest in creating aspiration for the brand and seed it in the minds of people.“ The focus on women buyers is aimed at broadening the brand image. “AP has always been perceived as a gents watch brand despite having done fantastic pieces for women as early as 1940s and '50s,“ he said. Globally , one in four watches sold by AP is for women and the segment is growing fast, he said, explaining, “We have to add newer references which are intelligent and charismatic to woo the women buyer across the world, including India.“ As a part of this strategy, the brand is considering an association with some “influencer“ in India who could be the “source of inspiration“ for the ladies, he said. For the men's range AP has had an association with ace cricketer Sachin Tendulkar.

• Video Analytics Climbs Evolutionary Ladder to be Next Big Startup Thing: Jabong may soon see fewer customers returning packages complaining about the dress looking different from how it appeared on the website. The online store plans to apply video analytics to minimise distortion in product appearance. The New Delhi-based company has tied up with Omnipresent Robotics, which is working on an algorithm to compare the online catalogue with the actual products in different lighting conditions on a large scale to predict the probability of returns. Having this information would allow Jabong to keep the items that are more likely to return off the shelf. “The way the future is evolving, there are tremendous insights we can gain from the existing CCTV technology,“ said Jabong cofounder and Managing Director Praveen Sinha, who became Omnipresent's customer earlier this year. The New Delhi-based retailer also uses video analytics in five of its warehouses to thwart robbery, trespassers and more. Video analytics, which broadly is mining information real time from videos to help predict corrective steps to problems, has huge relevance in industries ranging from retail to defence and elsewhere. And, a combination of technology evolution and access to greater Internet bandwidth is opening up big opportunities for a new crop of startups trying to conquer this still nascent field. “It is a part of the big data eco-chain.The most ubiquitous source of data has been the least used till date,“ said Chief Executive Subhash Challa of Melbourne-headquartered SenSen Networks, which has found takers for its parking surveillance solution in hospitality chains across India. It expects to record $6-$8 million (Rs 37-49 crore) in revenue next year.

• TaxiForSure in talks to raise $200 million: Tapping the high interest from private equity ( PE) investors in taxi aggregator services, Bengaluru- based TaxiForSure is all set to raise its largest PE funding. It had raised its third round of funding in August this year. According to people in the know, the three- year- old firm is in talks with leading PE majors for raising $ 180- 200 million. Avendus Capital is advising TaxiForSure in its latest fundraising. TaxiForSure raised its first round of funding worth $ 4 million from Accel Partners, Helion Venture Partners and Blume Ventures in 2013. In May this year, it received $ 10 million from existing investors and raised another $ 30 million in August, led by Accel Partners (US), with participation from existing investors. TaxiForSure was founded in 2011 by IIM - Ahmedabad graduates Raghunandan G and Aprameya Radhakrishna. It competes with Ola Cabs, EasyCabs, MeruCabs, MegaCabs, TabCabs and Uber. TaxiForSure’s co- founder Aprameya Radhakrishna said: “We are already well- funded and working on our proposed expansions. However, we have received interests from leading PE investors for additional investments and we are in talks with a few.” He, however, refused to disclose the fund size and the percentage of stake dilution. It is not yet clear whether promoters will hold majority stake after the latest round of proposed funding.

• eBay joins hands with NIIT for e-commerce certification prog: eBay has partnered with IT talent development firm NIIT to start a certification programme for the e-commerce sector in a bid to address skills gap, increase employability and create job opportunities. The programme will cover topics like the process of selling, inventory management, customer service, marketing, etc. It also aims to address the growing demand for qualified professionals and entrepreneurs as the e-commerce sector grows at a scorching pace in the world's second-most populated market. According to Technopak KPMG IAMAI study, Indian e-commerce sector is projected to scale the $ 76 billion mark by 2021 with demand for employees pegged at a staggering 1.4 million. However, only 27 per cent of the fresh graduates will be employable by 2020, the study said. "The ePro certification programme will not only build an employable workforce, but will also aid government's endeavour to skill 500 million people by 2020, who can contribute towards the 'Make in India' campaign," eBay India Managing Director Latif Nathani said here.

• Luxury brands’ profits in India fall sharply on increased costs: Luxury brands Gucci, Versace, Roberto Cavalli and Emilio Pucci’s profits in India have dipped sharply on the back of increased costs due to a weaker rupee and slowing economic growth. Luxury Goods Retail Pvt. Ltd, the joint venture of Gucci in India, saw its losses double to Rs.11.03 crore for the calendar year 2013, from Rs.5.3 crore a year-ago, according to a filing by the company on 29 October with the Registrar of Companies (RoC). Started by television actress-turned-entrepreneur, Reena Wadhwa, wife of investment banker Ashok Wadhwa, Luxury Goods Retail’s revenues increased 27.50% in calendar year 2013 to Rs.78.77 crore from Rs.61.78 crore a year-ago. Similarly, the franchisee for Versace, Roberto Cavalli and Emilio Pucci (Pucci) in India, Infinite Luxury Brands Pvt. Ltd saw its net profit drop 99.36% to Rs.92,373 in fiscal 2014 from Rs.1.44 crore a year ago. Profit dropped even as the company added new brands and stores to grow its business, which led to 119.36% increase in net sales to Rs.28.50 crore, according to the latest filing with the RoC.

International:

• American Eagle Outfitters Enters London Market: American Eagle Outfitters Inc. is growing its European presence with the opening of its first three stores in London, just in time for the holiday shopping season and as the company increased guidance for the fourth quarter. The retailer expects adjusted earnings of 22 cents a diluted share, above the previous guidance for earnings of between 17 cents and 19 cents and the current analysts’ consensus estimate of 18 cents. Stripping out 17 cents in restructuring and asset impairment charges, the figure, on the basis of generally accepted accounting principles, would be 5 cents a share. Year-ago earnings were 13 cents a share, or 19 cents excluding charges. The company said the increase in the outlook was prompted by improvements in markdowns and lower expenses, despite a comparable sales decline of 5 percent and net revenues that dipped “slightly.”

• Wolford Taps Creative Director: Austrian hosiery label Wolford has named Grit Seymour as creative director. She is to influence the spring-summer 2016 collection, which will be shown to professionals in mid-2015. Seymour has worked for Donna Karan and Max Mara. In the Nineties, she acted as artistic director at Daniel Hechter and in 1999, she was named design director of the new Hugo Boss women's collection. Until recently, she lectured in experimental clothing and textile design at the Berlin University of the Arts. The newly created position is in line with the brand ’s strategic refocusing with a focus on its know-how in the field of hosiery, lingerie and ready-to-wear. Earlier this year, Wolford has teamed up with Mario Testino on an advertising campaign, visuals and videos.

• Thai Central Pattana Sets $1.61 Bln Capex for Expansion by 2017: Central Pattana Pcl, Thailand's largest shopping mall operator, said on Wednesday it planned to invest 53 billion baht ($1.61 billion) by 2017 to open new stores and for renovation. The company plans to open six new shopping malls, including one in the Phuket tourist island, President and CEO Preecha Ekkunagul said in a statement.

• Wal-Mart's Black Friday is Now Five Days Long: Wal-Mart Stores Inc has extended its definition of Black Friday to five days. Beginning online on Thanksgiving Day, Walmart will provide five days of "tailored" deals for holiday shopping through Monday. Its week of deals will also feature what the discounter says is the first ever interactive circular, the return of its exclusive one-hour guarantee for pick up of select sales, and a store-specific plan to manage crowds. Duncan Mac Naughton, chief merchandising office at Walmart US, said, "Black Friday is no longer about waking up at the crack of dawn to stand in long lines and hope for the best....This year, we're blowing it out with five days of deals in store and online."

• Joe Fresh Sets Next Leg of Global Expansion: Accelerating its already aggressive global rollout, Joe Fresh will open locations in Mexico, Honduras, Costa Rica, Guatemala, Nicaragua and El Salvador starting next spring. Over the next five years, Joe Fresh, based in Canada where it is a division of Loblaw Companies, sees up to 84 locations operating in Mexico and the five Central American countries, including standalone stores and shops-in-shop. The latest leg in the international expansion will happen via two separate partnerships. The one in Mexico is with El Palacio de Hierro, the upscale, 13-unit department store chain which is also expanding with two locations. In 2015, El Palacio plans to open a minimum of five freestanding Joe Fresh locations as well as four shops-in-shop for the women’s collection and five for the children’s wear collection. Within the next seven years, El Palacio sees 25 freestanding stores as well as 42 shops-in-shop (14 each in women’s, men’s and children’s). 

• Marc Dietz Heads Marketing at RetailNext: Marc Dietz has joined RetailNext, the San Jose, Calif.–based analytics firm, as chief marketing officer. He succeeds Tim Callan, who left the firm in September 2013 to take the same post at SLI Systems. Dietz was most recently with IBM, where he led marketing for the company’s global software-as-a-service (SaaS) portfolio, which includes DemandTec and Silverpop. He directed marketing activities for DemandTec, a cloud-based analytics provider, prior to its acquisition by IBM in 2012. Dietz reports to Alexei Agratchev, chief executive officer and cofounder of RetailNext.

• Burberry Sees Currency Woes Waning: The currency hurricane that has damaged European luxury companies’ earnings is tailing off, and the second half looks decidedly brighter for the sector’s firms. On Wednesday, Burberry signaled that the worst of its currency woes have passed and that its reported second-half numbers won’t be as badly damaged by exchange-rate fluctuations as those of the first half. Carol Fairweather, Burberry’s chief financial officer, said during an analysts’ presentation on Wednesday that if exchange rates remain at early-November levels, “we do not expect a material foreign exchange impact in the second half of the year. Headwinds are moderating, and we’re expecting around a 10-million-pound [$16-million at current exchange] adverse effect in the second half.” Fairweather added that the company is expecting a 35-million-pound, or $55.5 million, currency hit to its 2014-15 profits. In the full year, margins also will feel pressure from what Burberry has called “a more difficult external environment” and continued investment in new stores. On Wednesday, Burberry shares closed down 1.5 percent to 15.05 pounds, or $23.87, on the London Stock Exchange.

Tech:

• Android One Loses its Mojo as Xiaomi, Moto Show Magic: Early trends suggest that Indian consumers have given a lukewarm reception to Google's much-touted Android One devices amid intense competition from the likes of Xiaomi and Motorola, posing a tough challenge for the US company , which has made the standard the centrepiece of its emerging-market strategy for smartphones. Import data for October showed Google's Android One partners -Micromax, Karbonn and Spice -together imported just over 2 lakh devices in the first full month of sales. This was less than the nearly 2.3 lakh handsets imported for the 15 days of September, data from market research firm Cybex Exim Solutions, available exclusively with ET, showed. The devices were launched in mid-September. IDC analyst Karan Thakkar and Counterpoint Research Analyst Tarun Pathak said initial sales have been hurt by intense competition as well as the fact that Android One devices were initially only available online, which still has limited penetration in India. The strategy was flawed, especially for a device targeted at a large segment of the population unlikely to have access to the internet. “For the month of October, roughly 8 million smartphones were shipped into the country , of which Android One would be just about 2.5%,“ said an industry tracker, who did not want to be quoted. A Google spokesperson, however, said the devices were seeing “very strong sales and consumer interest“, particularly in tier II and tier III cities. IDC's Thakkar, too, expects Android One sales to pick up in November and December. A person familiar with the matter said though Micromax's sales of its Android One device exceeded that of rivals, it managed to sell only about 1.2 lakh units till October end, as against a total of 2.50 lakh units imported. “They had anticipated huge demand for the device, and therefore had ordered a large stock.“ Micromax didn't respond to requests for comment. Pardeep Jain, managing director of Karbonn Mobiles, said its Android One Sparkle V smartphone had performed below the company's expectations, adding that sales were also marred as suppli es were available for only 15 days in Octo ber. “Traction has started coming now and demand is improving,“ he said. Prashant Bindal, chief executive officer of Spice Mobility, said sales were hit t by supply issues. “We had faced an out of-stock situation during the month since there was no inventory coming s from China.“

• YouTube Music Key subscription service is unveiled: Google's YouTube is starting a subscription service that allows users to stream ad-free music videos and to download them for offline use. The £9.99 monthly fee for Music Key also provides membership to Google Play All Access, the firm's existing "all-you-can-eat" song download facility. It is set to pose a challenge to Spotify, Rdio, Beats Music and other audio-only "unlimited" music services. The launch had been delayed by a dispute with independent labels. However, Google said it had now signed deals with hundreds of indies worldwide. That has enabled it to include tracks from artists including Billy Bragg, who had previously said YouTube was trying to "strongarm" labels into agreeing to "low rates" by threatening to block their material altogether if they did not take part.

• Microsoft to Invest Rs 1,400 cr in India Cloud Data Centres: Seeing a $2 trillion promise in India’s cloud market, Microsoft has decided to spend ₹1,400 crore on setting up three data centres in the country. In a filing with the Registrar of Companies, the US software giant said it has started work on setting up the cloud data centres in Mumbai, Pune and Chennai. The company is setting up local centres in a bid to capture the India market, especially customers in the banking and telecom industries, which have had data sovereignty concerns. For Microsoft, which earned ₹2,261 crore from India in 2013-14, the country is among the fastest growing cloud markets globally, with 2,000 customer additions each month. The company hopes to scale up its cloud offerings by setting up more global data centres. “The biggest cloud data centres we have globally are capable of handling 600,000 servers in just one region. That’s a massive amount of compute. Increasing this scale helps us in being more competitive,” Corporate Vice President for Microsoft Azure Jason Zanders told ET. Microsoft Chief Executive Officer Satya Nadella said during his visit to the country in September that he sees the India cloud computing market as a $2 trillion market opportunity. Top cloud players have shown keen interest in setting up data centres in India in the past few months. IBM launched a centre in Mumbai this month and plans to add another one soon. Amazon CEO Jeff Bezos had indicated in September that the company could set up its centres in India. The situation was quite the opposite about a year ago when all major companies shied away from India, citing infrastructural issues such as unpredictable power supply, patchy Internet connectivity, limited bandwidth and unreliable optical fibre connectivity. “There is a huge demand for cloud services in India, especially among the SMBs (small and medium sized businesses) because of which companies like Microsoft are willing to spend so much on setting up data centres in India,” said Sanchit Gogia, chief analyst at Greyhound Research.

• Kapil Dev Enters Mobile App Bandwagon with SloPho: Former Indian cricketer Kapil Dev has jumped onto the mobile app bandwagon, launching one which allows users to participate in contests, games, polls and quizzes, in return for points that can be redeemed or transferred gifted as prizes or bartered for advertising space on the platform. Users can win cumulative average daily prize money of up to ₹ 25,000 on the SloPho app, which will go up significantly during special promotions and festivals. Dev, who is the co-owner and promo ter of the app, told ET on Wednesday that he wanted to do something different.

• Uber to launch mobile wallet with Paytm: The taxi-hailing smartphone app Uber will launch a mobile wallet in India after its payment mechanism came under the RBI scanner for flouting the mandatory two-step verification on card transactions earlier this year.The much-storied San Francisco-headquartered startup is tying up with Paytm to offer the services of a semiclosed wallet to Indian consumers, a first anywhere in the world. The wallet will work through a mobile app and will let riders pay for their trips without using cash, a company executive told TOI. The ride app expects to reach a wider set of population in India through the Paytm wallet which can be topped up with a credit card, debit card or even through a customer's netbanking account. “We are super bullish about India and therefore investing in customizing our product to cater to the local market. The wallet will help us expand aggressively to smaller cities,“ Allen Penn, Asia head of Uber, told TOI.Since the launch of its cheaper line of Uber X, the cab startup has registered more than 40% month-on-month growth, Penn said. “We will continue to tailor make offerings and products for India seeing the exponential growth here,“ he said. Credit card penetration in India is still very low at about 20 million as per data released by the RBI. Uber which connects a driver to a rider, acting like a taxi marketplace, has not tinkered with its payment method anywhere across the world despite being present in 45 countries across more than 200 cities. New users will be offered the wallet option while registering for Uber and existing customers will be given time to transition to the Paytm wallet till end of the month. Penn told TOI, Uber will keep the conversation ongoing with the country's central bank on the credit card payment platform.

• Panasonic unveils ‘Selfie’ smartphone at Rs 11,190: Panasonic on Wednesday launched octacore ELUGA S smartphone at a price of Rs 11,190 which will be available to the Indian consumers from the third week of November. The ELUGA S features HD IPS display and the eye-definition 'BLINK PLAY' that lets one click flawless selfies or groupies with a 5 megapixel front camera. The new smartphone runs on the Android 4.4.2 operating system and is powered by 1.4GHz processor, and comes with 1GB of RAM and 8GB of internal memory which can be expanded upto 32GB. The device features an 8MP FHD capable autofocus camera and is packed with 2100 mAh battery. "This is the third phone is the ELUGA series which defines our willingness to embrace new technology in a market like India," Panasonic India managing director Manish Sharma said.

• eBay India to focus on mobile Internet users: With the number of mobile Internet users in the country growing, eBay India plans to focus more on this segment of the market, Managing Director Latif Nathani said. "There is a sale happening every 27 seconds in India from eBay using mobile devices. India is a country which gets 5 million Internet subscribers every month on mobile. And so it is a mobile-driven market. Therefore, we plan to focus on that," Nathani said. The company came out with a new product to improve its mobile web experience three weeks ago. "We have received a good response there," he added.