Daily News Digest- 14th Nov'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Flipkart, Amazon & Snapdeal to celebrate children’s day with special contests & deep discounts: E-commerce giants need an excuse to celebrate. To commemorate Children's Day big e-retailers such as Flipkart, Amazon and Snapdeal are not only giving huge discounts on products but running very interesting contests as well. Flipkart has tied-up with Amar Chitra Katha(ACK) to run a 'guess the book contest' and with Hamleys for'toy story contest' on Facebook. You have to visit there Facebook page a leave your answers or stories as comments. Ten contestants with the best stories will receive a free Hamleys Toy from Flipkart. "Flipkart will also have dedicated store (micro-site) for children on November 14 and offer exciting deals across categories like books, toys ( minimum 20% off), apparel (min. 30% off), footwear (flat 50% off), DVDs (up to 60% off) and other products," informed a spokesperson from Flipkart.com. Snapdeal , in association with Aviva Life Insurance are running a 'Big Dream' Contest and giving the kid's an opportunity to meet Sachin Tendulkar. To participate, parents simply have to visit Snapdeal.com and write a sentence about their child's dream profession and how they are planning for it. Aviva will select three entries and the parent and child will get to meet with Sachin. Additionally, 50 entries will win discount vouchers from Snapdeal.com.

• Lifestyle International in deal to sell goods from Max Retail on Flipkart: Dubai-based retailer Lifestyle International has entered into a deal with Flipkart to sell goods from its value fashion format Max Retail online exclusively on the latter's portal, joining a rising list of brick-and-mortal retailers forging alliances with online rivals. Despite being the most vociferous critics of ecommerce players' deep-discounting strategy, a clutch of top offline retailers have in the last couple of months made deals with online counterparts Future Group with Amazon, Tata-owned electronics chain Croma with Snapdeal, Amazon and Ebay, FabIndia with Myntra and Viveks with Ebay to expand their reach. Max is targeting nearly 5%-6% of its sales through this collaboration. 

• Snapdeal logs onto rural India: Online retail is poised for a hyper jump into rural India. To go one up on archrival Flipkart, Snapdeal -one of the country's largest etailers -plans to tap 50 lakh low-income households in slums and villages across the country . These include places such as Dharavi (Mumbai), which is Asia's largest slum, Govindpuri, one of the biggest slums in Delhi, and villages in Gujarat, Rajasthan and Haryana, among many others. Snapdeal will launch around 5,000 e-commerce kiosks across 65 cities and 70,000 rural areas by the end of next year with the help of FINO PayTech, an Indian financial inclusion solutions company. These e-commerce centers will be manned by village-level entrepreneurs, have personal computers and tablets, and also serve as collection and delivery points of packages since most people living in these areas usually have no permanent addresses. Additionally, they will help consumers with zero internet connectivity to shop online. “I am going into this thinking that we will be able to reach 5-10 crore new consumers in the next three years,“ Kunal Bahl, co-founder and CEO of Snapdeal, told TOI. At present, Snapdeal has around 3 crore registered users. Interestingly, initial pilot runs by these kiosks have revealed that the average ticket size of purchases by rural consumers is not too far behind that of urban consumers. “It is Rs 1,400 compared to Rs 2,000 from urban areas,“ said Bahl. Snapdeal will be offering a special assortment of utilitycum-aspirational products, such as speakers, juicers, solar lanterns, diner sets, cameras and mobile phones.These products will be curated on an exclusive page that will require login by a FINO agent, who would place an order, collect payment, receive and deliver to people who have no permanent address.

• CarDekho plans to raise Rs. 300cr: Online auto classifieds player CarDekho, which bought Naspers-owned Gaadi.com last month, is in the market to raise $40-50 million (up to Rs 300 crore) in a fresh financing round, looking for a $250million (over Rs 1,500-crore) pre-investment valuation. The Sequoia Capital-funded startup has held initial talks with a set of hedge funds and private equity investors, sources close to the matter said, indicating that the transaction may take another few months to close. CarDekho will join the growing tribe of Indian con sumer tech startups with a valuation of Rs 1,000 crore or more, which includes the likes of Bookmyshow, Zomato, Ola and Quikr. This group doesn't include the e-commerce biggies Flipkart and Snapdeal, mobile ad platform InMobi and data analytics major MuSigma, which boast of billionor multi-billion-dollar valuations. Just a year ago, Silicon Valley venture firm Sequoia Capital had invested over $15 million for a 20% stake in GirnarSoftware, which owns internet portals CarDekho, BikeDekho and PriceDekho, valuing the Jaipur-based company at over $50 million in its first round of institutional funding. CarDekho and Gaadi together claim to be the largest online auto classifieds player by revenue and traffic in the country. Amit Jain, co-founder & CEO, CarDekho, said, “Our revenues have gone up threefold year-on-year and our lead generation has doubled after the first ad campaign broke on TV . The Gaadi acquisition has given us a great used-car play , which is exciting a lot of our investors.“ Jain did not offer details on the fund-raise, but said the combined entity has 10 million unique visitors.

• No Output, but Nokia to Keep Chennai Factory in Shape for Future Buyers: No more phones to roll out and factory workers have left the company, but Nokia's Chennai plant has to keep its charge on. The 200-acre factory in Sriperambudur near Chennai has stopped production but the factory licence has to be renewed by end of November so that the machines run occasionally to keep themselves in working condition. “Nokia wants to sell it off as a functional factory,“ a manager said of Nokia's plans. Without the licence, the plant is reduced to a godown for storing machines, which may drastically cut valuations. Secondly, there is no benefit of uninterrupted power supply if it lets go of the factory licence. With just 90 remaining employees, the company will have to spend only about ` . 1 lakh to obtain the factory and allied licences. Nokia's memorandum of understanding with Tamil Nadu ends by 2016, with this renewal being the last. The deal showered Nokia with sops, including land on a 99-year lease, power, tax, and electricity cost reimbursements, and several incentives as part of a drive to spur manufacturing in the state. But plans went astray for Nokia Chennai, once an employer of over 12,000 permanent staff and 25,000 on contract. The company's shut-down story is now out in the open. In a Delhi High Court case last December, the Indian tax department had said Nokia's fixed assets such as the factory and a few sales offices are worth ₹ 586 crore. “Now, it would be much lower considering depreciation,“ the manager said, hinting at the value lost as every month creeps by.

• Honda Cars India May Break Even Sooner: CEO: Japanese automobile maker Honda Cars India, which had sacrificed short-term profits as it built scale through new products and ramped up manufacturing capacities, now eyes breakeven and profits much before March 2017, indicated its president and chief executive Hironori Kanayama. Currently , focusing predominantly on the domestic market and exporting less than 4% from two of its India facilities, the company will also explore will also explore the option of making India an export hub based on emerging opportunities in the African market.Honda Cars, which had halved its losses to RS 479 crore in 2013-14 with accumulated .RS 1,848 crore, is upbeat on losses at ` the prospects of the Indian market, especially after the encouraging response to its recent new launches. The automobile manufacturer has more than doubled its revenue by posting 83% growth in volumes at 1.3 lakh units during the fiscal to March 2014. It has now set a larger business goal of achieving sale of 3 lakh units a year by March 2017.

• Medical Tourists Keep Hotels Fit: India's booming medical tourism has emerged one of the most dependable business segment for premium hotel chains, prompting many hotels to offer special facilities, packages and customised services to woo such customers. Hotel chains such as Hyatt, Hilton, Ramada, Crowne Plaza and The Leela offer facilities and services ranging from long elevator cabins for stretchers, rooms close to elevators and customised food and beverages as per their dietary requirements, as business from medical tourism has been growing by more than 25% every year at a time when overall slowdown impacted the flow of business and leisure travellers. “Medical tourism is a year-round business and constant, when compared to leisure and corpo rate travel which are more or less seasonal,“ said Nischint Pathania, general manager at Ramada Powai Hotel and Convention Centre, Mumbai. According to a study by Assocham, medical tourism in India is set to grow into a`. 12,000-crore industry by 2015 with more than 45 lakh people expected to visit the country for treatment due to much lower cost of surgeries than western countries. The segment's growing busi ness potential has prompted hotel chains to set up properties near prominent specialty hospitals. Ramada Powai, for example, is located in the vicinity of healthcare chains like Hiranandani, Fortis and Seven Hills.Last year, Hilton Worldwide opened the 201-room Hilton Garden Inn Gurgaon Baani Square in proximity to specialty hospitals like Medanta Medicity , Artemis and Max Healthcare in Gurgaon, with several design features to support medical tourists. “For our specialised guests we have ramps at the entrance, customised long elevator cabin to wheel in a stretcher, and two accessible rooms on the lowest residential floor, each with an interconnecting room for the patient's attendant to occupy,“ said Parmeet Singh Nayar, officiating general manager of Hilton Garden Inn. Some top hotels such as Hyatt Regency , Chennai, have tie-ups with specialty hospitals and offer contracted rates for tourists visiting for medical treatments.

• Santro set to drive into sunset: Santro, the car that heralded entry of Hyundai in India, is all set to ride into sunset as the Korean auto giant bids adieu to one of the country's most successful models. Along with iconic Maruti800, the Santro dominated the hearts of millions of Indians as the `sunshine car' after being introduced by film star Shah Rukh Khan in late nineties. Ironically , Santro's exit this year coincides with Maruti800 and one of the country's most iconic brands ­Ambassador of Hindustan Motors. Sources in the dealer network and suppliers said Santro will be moving out of the market very soon as Hyundai focuses on newer models like Eon and i10, which have become the backbone of the company's operations. Hyundai will continue to provide sales, service and spare parts support to the model. Officially, Hyundai says the model still has some time to go before an exit. “Santro is one of the strong brands in Hyundai Motor India's portfolio. Santro has sold over 13.6 lakh units in domestic market and over 5.35 lakh units overseas ... We affirm Santro is in production and is a part of our portfolio of 10 brands and is available at all dealerships for sale,“ a company spokesperson said. The model, targeted at first-time buyers, still clocks respectable numbers, which Hyundai pegged at nearly 3,000 units monthly. It is uncommon for car companies operating in India to phase out their successful models, considering the huge brand equity the models enjoy and the strong recall value that they enjoy with buyers.

• Kumar Mangalam may join the Indian e- tail bandwagon: Kumar Mangalam Birla is the latest billionaire with plans to enter the burgeoning Indian online market that is set to grow sevenfold in four years. The chairman of the $40 billion Aditya Birla group, which is engaged in businesses from mining and financial services to telecommunications, is open to either acquiring e- retailers or building one from scratch, Birla said in a November 10 interview at his Mumbai corporate headquarters. “There’s a lot of ground for new ventures in e- commerce,” he said. “ I am not saying that we can take an Amazon head- on. But there are a lot of green spaces.” Surging internet access in the world’s fastest growing smartphone market is buoying online shopping and luring investors including Amazon. com Inc’s Jeffrey Bezos and SoftBank Corp’s Masayoshi Son. SoftBank last month announced an investment of $ 627 million in Indian e- retailer Snapdeal. com, while Amazon said in July that it plans to spend $ 2 billion in India. Birla, 47, joins peer Mukesh Ambani, whose Reliance Industries is planning to start “ multi- channel shopping in the coming year,” according to its annual report published in May. “ The potential of e- commerce combined with the network of physical store locations” will offer its customers both choice and convenience, the report said without elaborating.

International:

• Berkshire to Acquire Duracell from P&G in $4.7-b Stock Deal: Berkshire Hathaway agreed to buy the Duracell battery business from Procter & Gamble in chairman Warren Buffett's latest stock swap. Berkshire will turn over $4.7 billion of P&G shares held by Buffett's Omaha, Nebraska-based company, according to a Business Wire statement on Thursday . Duracell will have about $1.7 billion in cash when the deal is completed, which is expected in the second half of next year, according to the statement. The exchange may help Berkshire cut its holding in Cincinnati-based P&G without incurring the tax costs of selling shares in the open market. Buffett became one of P&G's biggest shareholders through an investment in Gillette. P&G bought the razor maker in 2005 in a $57-billion deal that the Berkshire chairman supported. Berkshire held more than 100 million shares as recently as 2008 and cut the stake several times since then as the company faltered under previous CEO Bob McDonald. “I have always been impressed by Duracell, as a consumer and as a long-term investor in P&G and Gillette,“ Buffett said in the statement. P&G announced last month that it would divest Duracell.CEO AG Lafley has been streamlining the company , cutting expenses and selling noncore businesses. P&G sold its pet-food business and has said it will jettison up to 100 of its slower-selling brands. Paying with shares would mirror two of Buffett's transactions in the past year, when he swapped stock that had appreciated for operating businesses.

• Asda sees sales fall as 'shockwave' hits supermarkets: Sales at Asda have fallen, hit by what the retailer called "a shockwave" in the supermarket sector. Asda, which is owned by US grocery giant Wal-Mart, said sales at stores open more than a year were 1.6% lower in the third quarter, compared with the previous three months. In the second quarter, sales rose 0.6%. Asda's chief executive, Andy Clarke, said that despite the fall in sales, he was pleased Asda was gaining market share at a difficult time. "A year ago we took clear action to address the changes in our market and implement a five year strategy to redefine value retailing. That is a long term strategy that won't be delivered overnight." He said the company's focus on offering value for money and promoting internet shopping was working but that conditions in the market were very difficult.

• Wal-Mart Told Store Managers to Match Online Prices With Amazon: Wal-Mart Stores Inc has informed managers of its roughly 5,000 stores across the United States that they can match prices with Amazon.com Inc and other online retailers, the head of the company's U.S. business said on Thursday. Greg Foran said the directive was meant to formalize a practice already in place in many stores. "About half of the stores were doing it anyway," Foran said on a call with media following the reporting of its quarterly results.

• Tommy Bahama to Open New Concept Store: Tommy Bahama will unveil a new retail concept in Harbourside Place in Jupiter, Fla., on Nov. 20, incorporating its retail store and restaurant in a more integrated manner for the first time. The company currently operates 14 joint retail-restaurant “Island” locations worldwide, but this latest design all but eliminates the barrier between the traditional shopping area and the dining room. This allows customers to browse through the store’s assortment of men’s and women’s sportswear, swimwear, footwear, accessories and home decor with cocktails in hand. The restaurant seats 220 and measures 4,774 square feet, while the retail space is 3,475 square feet. The store features a wrap-around outdoor dining space near the beach and the color scheme is white and caramel with teak woods, blue tiles and fixtures designed to evoke the sun-streaked beach lifestyle of the brand.

• Ralph Lauren Watches and Jewelry Names New CEO: Luc Perramond is leaving La Montre Hermès to take over as president and chief executive officer of Ralph Lauren Watches and Jewelry, effective in February 2015. “I am very excited by this new challenge, in particular as I will be working directly with Mr. Ralph Lauren himself, one of the great designers of our time,” Perramond said in an e-mail on Thursday, adding that he would move from the Swiss city of Neuchâtel to Geneva for the job. Ralph Lauren Watches and Jewelry is a joint venture with Compagnie Financière Richemont, the parent of watch and jewelry brands including Cartier, Vacheron Constantin, Jaeger-LeCoultre, Piaget, IWC and Van Cleef & Arpels.

Tech:

• Ericsson Works on Telecom Cloud Solutions: Swedish telecom equipment maker Ericsson is working on creating its own cloud-based solutions for the telecom industry and expects to start running proof-of-concept models in India as early as next year. A bulk of the research and development work on the project is happening at the company's Bengaluru facility. Telecom companies have very different applications and requirements compared with other enterprises, said Nishant Batra, vice-president and head of engagement practices at Ericsson India. “Telco applications are unique. We are starting by virtualising their legacy applications, similar to what was done by IT companies. And then we would control those virtualised applications using software-defined network controller,“ he said. “With cloud, telcos can have faster rollouts of networks, with lower cost and more flexibility in terms of the hardware they want to use.“ The flexibility and cost effectiveness of renting storage and software over the Internet are driving companies to adopt cloud solutions. And, this increasing demand for cloud computing among enterprises has led Ericsson to look more closely at its applications in the telecom space where the company is world's No. 1 equipment provider. Ericsson has been increasing its focus on cloud in the past one year and has a separate division for cloud and IP networks.

• Uber Plans to Set Up National Level Operations in India: Taxi-hailing app Uber plans to set up national level operations in India, a shift from its typical model operated across different countries where a skeletal workforce operates city-centric business, even as it expands its footprint into new cities in its largest and fastest growing market outside the US. The popular app, which introduced a mobile wallet for cashless payments on Wednesday, now plans to add a managerial layer on top of its existing operations in 10 cities where it offers high quality taxi rides, while it plans to hire hundreds of people on city-level operations across the country. “We're a start-up but increasingly as the number of cities grow, there is so much that our teams in each market are working on,“ Allen Penn, head of Asia operations at Uber, told ET. “It makes sense to add some extra levels, so that the core remains at the city-level where the action is,“ he said, while adding that Uber will be looking to hire strategic finance managers and community operations man agers who would oversee city operations across India, which is growing at 40% month-on-month. “We want to make sure that India retains that crown.“ At present, San Francisco-headquartered Uber principally follows a set up on a city-basis, where a general manager runs each city, a community manager looks after marketing and an operations manager looks after supply side and operations. Though Uber will stick to its model of using minimum staff, the new staff layer will be another first for the taxi-provider, which started off by launching a vehicle financing programme in India, which has the most employees outside the US. It followed up with a first of its kind tie-up with mobile wallet provider Paytm, using which Uber users in India can make payments via netbanking, debit cards and credit cards.

• Tripoto Raises Rs 2.4 Cr for Tech Upgrade: Online travel community start-up Tripoto has raised seed funding ₹2.4 crore (about $400,000) from 10 investors, including Snapdeal founders Kunal Bahl and Rohit Bansal, and Makemytrip and TrulyMadly.com cofounder Sachin Bhatia. The investment was led by Outbox Ventures. Palaash Ventures also participated in this round. The funds will primarily be used for scaling up technology and expansion of the global travel community, said cofounder Anirudh Gupta. “We hope to attract more users to share their travel stories and we hope a scale in technology will help,“ said Gupta, an ISB Alumnus, who runs the year-old venture with colleague Michael Lyngdoh. Tripoto is a platform that connects travellers across the world, where users have access to crowdsourced travel stories, pictures and itinerary details. The destination is identified and mapped and the content and pictures of the traveller are automatically identified and synced by the platform. The Android app has been launched while the iOS version will be out in a week. “Travellers found it easier to share their experiences while they were experiencing it and not after it was done.That's when we realised how important mobile features are,“ said Gupta, who formerly worked for Rocket Internet and was part of the founding team of Bengaluru-based tablet maker Notion Ink.

• Samsung Bets on Curved Smartphones to Beat Rivals: Samsung Electronics aims to restore its crumbling lead in the global smartphone industry in part by ramping up high-end devices with curved screens full of advanced technology that's tough for rivals to replicate. Yet as the South Korean giant seeks to make devices like the rigid-curve Galaxy Note Edge stand out from a crowd of flat, big-screen handsets, making money will depend on producing them cost-effectively and coaxing developers to tailor applications for the new format. Samsung Electronics is headed for its worst annual profit in three years, under siege as Chinese firms like Xiaomi Technology Co and Lenovo Group reel in buyers with full-function touch-screen smartphones that are cheaper. Only Apple Inc has maintained full brand premium. The collective industry move toward larger screens makes distinctive designs tougher to achieve, said Kim Nam-su, a senior Samsung Electronics designer and an architect of the Note Edge. “A change in the platform can bring the platform can bring about a variety of new considerations...I think a curved screen is a big solution for overcoming those challenges,“ he said. As Samsung Electronics moves toward what analysts say could be a nearly onethird drop in operating profit this year, it's launching more midtier phones to counter cheaper rivals. But a high-tech edge for the premium market could also help it compete in an industry that international research firm CCS Insight sees growing to $331 billion by 2018 from $289 billion this year.

• Amazon and Hachette resolve bitter dispute over price: Internet retailing giant Amazon and book publisher Hachette announced they have resolved a bitter dispute over print and e-book pricing. The two have been feuding for several months over a new contract, leading Amazon to delay the shipment of several high-profile Hachette titles. Neither firm announced the terms of the new multi-year contract. "This is great news for writers," said Hachette chief executive Michael Pietsch in a statement. "The new agreement will benefit Hachette authors for years to come. "It gives Hachette enormous marketing capability with one of our most important bookselling partners." According to reports, Amazon had been seeking a larger proportion of the revenue generated from the sale of Hachette's e-books, while also attempting to lower the price of those books.

• BlackBerry announces that BlackBerry Classic will launch on December 17 in New York: At the end of yesterday’s BlackBerry Conference keynote, CEO John Chen announced that the company would be launching the BlackBerry Classic on December 17 in New York. The Classic is BlackBerry’s return to its hardware heyday and a way of getting users that love their old BlackBerrys onto new hardware and the new BB 10 OS. Will the old school, new phone get people to upgrade? We’ll have to wait and see in December in the Big Apple. More importantly, will BlackBerry be able to convince Kim Kardashian to ditch her Bold and stop stalking Ebay for the old phone? The Classic is expected to start shipping in the middle of December and will cost $450. Chen also announced a red version of its Passport handset that will launch on Black Friday.