Daily News Digest- 17th Nov'14

Thought of the Day:

Today in History:

Followig made the Headlines:

India:

• Cisco to Invest $1.7 B in India This Year: Nearly three months after Cisco Chairman & CEO John Chambers said he will “bet big on India“, the world's biggest computer networking company outlined its plans to invest around $1.7 billion in a year, becoming the first multinational to make such a commitment since the Narendra Modi government took over in May . After a few hiccups -spate of exits of top officials, fears over business growth in the country -Cisco is ready to partner India on the Centre's digital drive. “Cisco is investing $1.7 billion this year into the India operations,“ Cisco's India President Dinesh Malkani told ET. “The investment includes a $40-million innovation fund and investments into research & development.“ “I think (PM Narendra) Modi is going to turn around the country,“ Chambers had said during an earnings call in August. “You can see the enthusiasm, both the citizens and the businesses there are betting on a single emerging market. I would bet on India right now in a big way.“ Cisco India lost at least four key people in the past one year, including India head Jeff White. In the quarter ended October 26, 2013, Cisco's India revenue declined 18%.However, with the Modi government in place, Cisco is placing a fresh bet on India. With a fresh annual investment of $1.7 billion in India, Cisco is preparing to bid for large government contracts for smart cities and other Digital India projects.Chambers sees huge opportunity in the country, and during a speech in August, he had said he wants Cisco India's contribution to the parent company to rise from less than 2% now to at least 5%. 

• E-tailers Lay Tracks for Partnership With IRCTC: Before Flipkart, there was IRCTC, which for most Indians was their introduction to e-commerce more than a decade ago. And even now, revenue from online ticketing on Indian Railway Catering and Tourism Corp rules the roost, having ex ceeded the combined sales of Flipkart and Amazon India in the year ended March. While both Flipkart and Amazon each said earlier this year that they had hit a billion dollars in annual gross merchandise value or total value of goods sold, IRCTC generated ₹ 15,410 crore or nearly $2.5 billion through online ticket sales in the last financial year, up 24% from a year ago when it sold tickets worth ₹ 12,419 crore. The figures are sourced from RoC filings. Since IRCTC doesn't compete with any of the online marketplaces in India, both Amazon and Flipkart are in talks with the government-owned portal as they look to tap the rail portal’s existing database of more than 21 million consumers. “Tie-ups with portals like Flipkart, Amazon etc are in the process under which these portals would like to sell their merchandise through IRCTC’s portal, it being one of the largest e-commerce sites in the entire Asia-Pacific region,” said Sandip Dutta, public relations manager at IRCTC, which set a record in March when it booked 5.80 lakh e-tickets on a single day. That compares with 27 tickets a day when it began in 2002. 

• Reliance Begins E-tailing Fresh Groceries in Mumbai: The retail arm of Mukesh Ambani’s Reliance Industries has taken baby steps towards e-commerce. Reliance Retail has launched a website to deliver fresh grocery products in select neighbourhoods of Mumbai. RelianceFreshDirect.com will sell fruits and vegetables, dairy products, groceries, packaged food, confectionary items and personal care products to residents of South Mumbai, Navi Mumbai and parts of Thane. The products will be similar to what is available in Reliance Fresh and Reliance Mart stores. “We continue to explore newer markets and channels to leverage our solid foundation. The launch of RelianceFreshDirect.com adds the ‘direct delivery’ channel to our network, besides convenience and choice to our valued customers. Over time we will certainly augment the direct delivery model,” said a spokesperson of the company. The venture operates through a subsidiary and follows a pilot project at the Reliance Corporate Park office in Navi Mumbai. Over the past year or so, its 10,000 employees there have availed of the facility through the Reliance Fresh-Project Direct website. The company deliv ers the products to customers either from the nearest Reliance store or its other distribution channels. It has not said when the home delivery services will be extended to other cities. In groceries, the company will compete against firms such as localbanya.com and bigbasket.com, which deliver fresh products to consumers in some cities. According to consultancy firm Technopak Advisors, India's e-commerce market, dominated by travelrelated services, is worth $10 billion at present and is expected to touch $200 billion by 2020. Online retailing stands at $600 million a year and may swell to $70 billion by 2020. 

• Social Biz Incubator Villgro Makes 7 New Investments: Social enterprise incubator Villgro has invested in seven start-ups, marking its second set of funding this fiscal. This takes Villgro's investment and incubation portfolio to 10 companies. Kamal Kisab, Flybird Innovations, VectorDoc, SustainEarth, SkillTrain, MicroX Labs and Bempu, all early-stage companies, have secured funding in the range of . 10-15 lakh. All seven start-ups ` have prototypes of products that will be ready for the market over the next six-nine months. “Most funding will be used for finishing touches to product and take it to market,“ said P R Ganapathy, chief operating officer, Villgro. Villgro will also provide mentoring, access to relevant networks and talent to help these companies--which are working in healthcare, energy, agriculture and education--execute and grow. “We will use funding for field and market research, go-to-market strategy ,“ said Prabhat Kumar, co-founder, MicroX Labs, makers of an automatic and portable blood cell for CVC test. The company plans to hit the market next year and will launch in low-income states starting with Uttar Pradesh and Bihar, targeting small diagnostic centres. 

• Bill Gates Invests in Unitus' Offshore Venture Fund: Bill Gates has made an investment in Unitus Seed, an impact investment fund that focuses on social enterprises, taking for the first the equity route to help drive social and economic change in India. The co-founder of Microsoft, who has been directing millions of dollars in grant capital to the country for years, has joined Indian origin investor Vinod Khosla and a group of Seattle-area techies in backing Unitus Seed. “Impact investing is a powerful model with the potential to build markets and drive change for the people who need it most,“ said Gates. So far, the Bill and Melinda Gates Foundation, set up in 1994 with donations of the world's second-richest man's personal wealth estimated last at around $82 billion, is best known in India for having channeled grants of over $1 billion to combat HIV , deliver vaccines and improve sanitation. The exact amount of Gates' investment in Unitus -made solely in his personal capacity -could not be ascertained. Unitus invests in India through two funds -Unitus Seed Fund India, a Sebi-registered venture capital fund, and Unitus Seed Fund LP, an offshore venture capital fund. Gates' investment has been made in the offshore fund, which now has 50 investors and $17 million, or about ₹ 105 crore, of assets under management. 

• Passenger Vehicle Sales May Stay Flat This Year: With the initial euphoria -after the Narendra Modi government came to power in May -beginning to ebb away, the automobile industry is preparing to wait for at least one more year before clocking any growth. According to credit rating agency Icra, the growth rate for the passenger vehicle segment will be flat for the full year in 2014, before rising by 7% in 2015. Society of Automobiles Manufacturers Association (SIAM) endorses the view for calendar year 2014 ending December.“However, we hope that in the fiscal year ending March, there will be growth in the passenger vehicle segment,“ Sugato Sen, deputy director-general, SIAM, told ET. “The green shoots have not started in the passenger vehicle segment, I think it will take a year or so to see the market moving in the positive. I think 2014 will end in the red, or it will be flat,“ said Rakesh Batra, partner-automotive practices, EY. However, he says that the decline in the inflation (headline inflation for October fell to its lowest in five years at 1.77%) and fuel price cut will augur well for the industry. 

• 40 pilots quit SpiceJet in six months: Apprehending an uncertain future for the company , some 40-odd SpiceJet pilots, including commanders, have quit the airline during the past six months, say sources. The airline auditors (as reported by TOI on November 15, 2014) have cast doubts over the ability of media baron Kalanithi Maran's budget carrier to carry on as a “going concern“. The airline has reported 5th straight quarter of net losses in July-September, at Rs 310 crore, although it is down from the year-ago period when it had a net loss of Rs 559 crore. The losses came down as the airline witnessed a 15% growth in revenue.For the past fiscal, the airline had reported a record loss of a little over Rs 1,000 crore. 

• eBay inks pact with Odisha Handicraft Corp: The growing popularity of Odisha's Konark form of statues and pattachitra (palm-leaf etching) in USA, Australia and Canada has promoted American e-tailer eBay to tie up with Odisha State Cooperative Handicraft Corporation (OSCHC) to ensure a steady supply of these handicrafts across the world. "eBay India's partnership with Odisha State Cooperative Handicraft Corporation is our first state-level association. We are exploring similar partnerships with other bodies to enable their members to leverage eBay's global reach," Navin Mistry, head of retail exports at eBay India told ET. 

• Pantaloons to invest Rs 150cr to add 20 outlets this fiscal: Retail chain Pantaloons Fashion & Retail Ltd will invest Rs 150 crore to add up to 20 outlets this fiscal to take the number of stores to 100. In an investors' update, Pantaloons' parent company Aditya Birla Nuvo said: "Full year capex (capital expenditure) guidance (for Pantaloons) stands at Rs 150 crore towards addition of 18-20 new stores to reach 100 stores mark." Pantaloons has already spent Rs 44 crore in the first half, it added. The company, which reported turnover of Rs 940 crore in the first half ended September 30, 2014, said the investment will also be utilised in refurbishing 21 stores. In July, Pantaloons had said it planned to raise up to Rs 500 crore through various means, including a rights issue this year to fund its growth capital requirements. Out of the aggregate amount of Rs 500 crore, up to Rs 300 crore is proposed to be raised through rights issue, it added. 

• L'Oreal to open 100 million case hair-colour plant in Himachal Pradesh by mid-15: L'Oreal India, which sells premium shampoos and cosmetics under brands such as L'Oreal Paris, Garnier and Maybelline New York, is setting up a hair colour manufacturing plant at Baddi in Himachal Pradesh. "We are in the process of opening a second factory in the North. It will be at Baddi in Himachal Pradesh and will be only for hair colour, for which we plan a capacity of 100 million units," L'Oreal India Managing Director Jean-Christophe told media. The plant will be operational by the middle of next year and will cater to all its brands that sell cream-based hair colours, he said. 

International:

• China's Alibaba eyes first bond sale after record listing: Chinese e-commerce giant Alibaba is set to meet with investors next week as it considers issuing its first US bond sale. The tech giant has hired Morgan Stanley, Citigroup, Deutsche Bank and JP Morgan to manage the sale. Alibaba would offer dollar-denominated notes to institutional investors, the company said in a statement. Reports suggest that Alibaba would sell $8bn (£5bn) in bonds after its record public listing just two months ago. News of Alibaba's bond sale comes after it made $9bn in sales on Singles' Day in China this week, which is considered the world's biggest online sales day. In September, the company's initial public offering in New York was the biggest in the world, raising $25bn and its stock is up nearly 70% since then. Alibaba will hold meetings next week in Boston, New York, Hong Kong, London and Singapore. 

• Forever 21 to Revive Classic Warner Bros. Characters: In its latest animation-themed endeavor, fast-fashion chain Forever 21 will revive classic Warner Bros. cartoon characters in an apparel and accessories collection launching in time for the holidays on Nov. 28. Featuring the mugs of Looney Tunes and Hanna-Barbera favorites such as Bugs Bunny, Tweety Bird, Daffy Duck, Scooby-Doo, The Jetsons and The Flintstones, the 44-piece unisex line includes sweaters, Ts, tanks, crop tops, socks and loungewear for adults and children and will retail for between $3.90 and $32.90. Designed by apparel maker Jerry Leigh in partnership with Warner Bros. Consumer Products, the line is the latest addition to Forever 21’s homage to American animation, following recent collaborations with The Simpsons and Barbie. 

• Walmart Workers Plan Black Friday Protests Over Wages: A group of Walmart employees pushing for higher wages said on Friday they were planning protests at 1,600 Walmart stores nationwide on Black Friday, the biggest shopping day of the year in the United States. The labor group, Our Walmart, said it had protested 1,200 to 1,400 Walmart stores last year on Black Friday, the day after the Thanksgiving holiday. Wal-Mart Stores Inc, owner of Walmart brand stores, and the largest private employer in the United States, has been a target for activists in the contentious national debate over proposals to raise the minimum wage. The announcement comes a day after police arrested 23 people outside a Los Angeles-area Walmart protesting what they say are the company's low wages and its retaliation against employees who pushed for better working conditions. 

• Warm Weather Cools Danish Apparel Sales: Sales at Danish fashion retailer IC Group, which has recently shed four brands to focus on premium clothing, rose marginally as warm weather put shoppers off buying its autumn collection. Revenues grew 1 percent to 828 million Danish crowns, or $139 million, while operating profit increased 2.3 percent in the first quarter of its 2014/15 financial year that ended Oct. 30, IC Group said. "In the Nordic region, a relatively warm autumn had a negative impact on the sale of autumn collections in general," it said, echoing comments from retailers in other parts of northern Europe. IC Group, the second largest fashion retailer in Denmark by market share behind privately owned Bestseller, stuck to a forecast of increasing operating profit in full-year 2014/2015. Revenues in its three premium brands, Malene Birger, Tiger of Sweden and Peak Performance, increased 7 percent. That compensated for a 17 percent revenue fall in the company's last remaining wholly owned mid-segment brand, Saint Tropez. IC Group sold its four mid-market brands in June: InWear, Matinique, Part Two and Soaked in Luxury, to competitor DK Company. 

• Japan Slips into Recession: Japan has officially slipped back into recession mode as the county's economy unexpectedly contracted in the third quarter, increasing the odds that Prime Minister Shinzo Abe will postpone a controversial sales-tax increase. Gross domestic product shrank an annualized 1.6 percent in the three months through September, the Cabinet Office said Monday in Tokyo, compared to the median forecast for 2.2 percent growth in a Bloomberg News survey of economists. Unadjusted for price changes, the economy contracted an annualized 3 percent. Japan's economy shed more than 7 percent in annualized terms in the second quarter and a recession is defined as two consecutive quarters of contraction. Abe’s administration is seeking to shore up public support after April’s levy increase triggered the deepest contraction in more than five years. Etsuro Honda, an adviser to the prime minister, said last week a tax increase is out of the question if growth is less than 3.8 percent. 

Tech:

• Startups Help Parents Tech Up for Child Safety: HandsTel, a brand new start-up dedicated to the development of technology products for civilian safety and security, has launched a wearable device that allows a child to instantly alert parents with precise location in case of an emergency and a multi-featured responder app for parents to respond instantly. The internet of things (IoT) wearable smart bandwatch works as a detection device and parents will have an option to call the built-in phone on the device to confirm and plan the response. The wearable device and responder app were showcased at a special event on Sunday organised by a non-governmental organisation and i2india Ventures, Indian arm of Tata Group-backed British incubator Imperial Innovations, which has launched HandsTel. This is the latest in a number of new devices and technologies launched in recent days to address the lack of adequate security and safety in schools, which was brought to light following the rape of a six-year-old at Bengaluru's Vibgyor International School and a string of sexual assault incidents from across the country . Traqmatix, Northstar and Ospox are among other start-ups that have developed GPS and RFID-enabled solutions to track kids and school buses. “My child was in that school, too, and I felt the need to do something as a parent, as an entrepreneur. This comes from somewhere very personal,“ said Deepam Mishra, chief executive officer at i2india Ventures. While the wearable device is priced ₹ 5,000, the Responder App can be installed free of cost in smartphones as well as feature phones. Parents who tested the products came back with a very positive response, said Mishra, who bootstrapped the venture with around ₹ 80 lakh. 

• Digital India May Change Driving Experience: Cruising on India's highways could, within two years, turn into a driving experience that has so far been restricted to developed countries, according to German marquee carmaker Mercedes-Benz. If Prime Minister Narendra Modi's vision of providing high-speed internet across the country translates into reality , drivers will have on tap information on approaching restaurants and fuel pumps, for instance, be sides bidding adieu to the fear of being stranded. Without the IT infrastructure in place, content providers have also not come up in the country , said Manu Saale, managing director and CEO of Mercedes-Benz Research and Development India.“But with Narendra Modi's Digital India, I see a lot of buzz with content providers. So between two-three years, if digital highway gets completed, for which signals are good enough, then we too should have it,“ he said. The Centre's Digital India ini tiative is expected to completed . 1,13,000 by 2019 at a cost of about ` crore and offer high-speed internet. Although 233 million Indians are already connected over the internet and global positioning systems assist drivers along the highways, some experts believe that high-speed internet will help build app ecosystem and make driving experience richer. 

• Blackberry: No plans to crack 'sensitive' China market: Blackberry chief executive John Chen sees Asia as key to reviving the loss-making smartphone maker's fortunes but expanding in the region's biggest market China, where security data concerns are rife, is currently not a priority. Chen, who has been managing the company's turnaround for the past year, told Reuters that concerns over information security and the political backlash that security breaches could create dimmed the allure of the world's biggest smartphone market for Blackberry for the time being. Instead, the company is keen on expanding in India and Southeast Asian countries like Indonesia, Malaysia and Singapore, Chen said in an interview in Beijing this week during his first visit as CEO to mainland China, where he attended the Asia Pacific Economic Cooperation forum. "It takes too long to ramp up to a size that is even reasonable," said Chen. "Even if I have that time and money I'll probably have better returns going into a different set of markets that we are already in, like India, South Asia, and Southeast Asia." 

• Facebook reportedly wants to be your office’s social network: |A report from Financial Times today indicates that Facebook is working on a new service called “Facebook at Work” that aims to get a piece of the business social networking space. According to the report, Facebook at Work will look similar to the main service, complete with news feed and groups, but will allow users to maintain a separate work profile as well as a personal profile. Facebook has reportedly been working on the tool for at least a year and has begun testing with external companies as a launch draws near. Popular tools like Slack and Yammer are used in many businesses for internal social networking; Facebook is yet to enter the space. It’s interesting that Facebook is looking to move into the business social networking space, as many employers actively discourage their employees from using social networking during business hours. With Facebook now reaching over 1.3 billion monthly active users, it’s likely looking for additional sources of user and revenue growth for the future so expanding into businesses could guarantee not only user growth but would secure additional revenue. 

• Flickr Launches Wall Art Printing Globally: One month after Flickr introduced a new offering letting users to create wall prints from their own photos, the Yahoo-owned company has opened up the service globally. Flickr offers both wood-mounted and gallery-style canvas prints, in five sizes ranging from 8″ x 10″ to 20″ x 30″. However, prints could thus far only be shipped to US addresses. As of today, anyone anywhere in the world can order wall art prints directly from their Flickr account. If you’re not sure whether your snaps are of a high enough resolution for printing, Flickr helpfully prevents you from selecting photos it deems to be of too-poor quality to be enlarged into wall art. With photos that are suitable, you simply select the canvas or photo mount option. 

• Microsoft's Sway Tells Your Story Without The Hassle: Office has a new app in the family: Sway, a new way to share stories and ideas directly from your phone. Microsoft’s Sway was announced back in October and remains invite only, but the company opened up the preview to New Zealand users this week. Sway is touted as a way for “expressing your ideas in an entirely new way, across your devices.” When you first launch Sway, you might be surprised by how simplistic it is for a Microsoft product. There are few buttons or options other than simply ‘create your own Sway.’