Daily News Digest- 19th Nov'14

Following made the Headlines:

India:

• Housing.com Adds Rs 1,500-cr Brick to Startup Moneywall: Japan's SoftBank has made its third investment in India in less than a month by leading a funding round of $100 million (Rs 610 crore) in realty portal Housing.com, according to three people directly involved in the transaction. Housing.com, launched two years ago by a team of engineers from IITBombay, has been valued at about $250 million (Rs 1,500 crore) with Soft Bank acquiring a 30% stake for its investment of $70 million. The sources said it is a `pre-money' valuation, denoting that the worth of the company was arrived at before SoftBank's investment `Post money', which is after the investment round closes, the valuation would be substantially higher, they said. SoftBank and Housing.com did not reply to email queries on the development. The transaction, analysts said, is a testament to SoftBank's interest in India as well as the growing investor appetite for real estate listing portals. So far this year, CommonFloor and Housing have raised money, and Info Edge, the owner of 99Acres, has indicated its intention to back the portal with ₹ 750 crore. MagicBricks, owned by the publisher of this newspaper, competes in the same market. Other investors in this round for Housing include hedge fund Falcon Edge, Russian billionaire Yuri Milner’s DST Global and the existing investors including Helion Venture Partners, Nexus Venture Partners and Qualcomm Ventures. “The funds will be used to expand operations, build new technology, increase hiring and marketing spend,” said one source.

• PepsiCo Divests North India Bottling Ops to Jaipuria's Co: PepsiCo has divested its entire company-owned bottling operations in North India to its franchisee bottling partner Varun Beverages in a move that the US beverages and snacks major hopes will help it step up its fight for market share with Coca-Cola. “We are expanding our partnership with a strategic partner who understands the local market and has continually demonstrated the ability to drive synergies and deliver strong market execution,“ said D Shivakumar, chairman and CEO at PepsiCo India. The deal comprises transfer of four plants and two co-packing units spread across Uttar Pradesh, Haryana, Chandigarh, Uttaranchal, Himachal Pradesh and Punjab with over 900 direct employees. With this deal, PepsiCo's entire north and east India bottling operations, with the exception of Bihar, come under Ravi Jaipuria's RJ Corp, which owns Varun Beverages, making it one of the US major's top franchisee bottlers globally . “There are huge operational efficiencies, cost savings and supply chain advantages of consolidating operations across the region,“ Ravi Jaipuria told ET. Neither Jaipuria nor Shivakumar commented on the size of the deal. Following the deal, PepsiCo's role in north and east regions, which contribute about 40% of its national sales, will be mostly limited to marketing and supplying concentrates to bottling operations. India is the fifth-largest market for PepsiCo globally. But the maker of Pepsi cola, 7Up lemon drink and Mountain Dew, trails Coca-Cola in the ₹ 14,000-crore Indian soft drink industry. PepsiCo reported doubledigit growth in volume sales in the quarter ended September, helped by a prolonged summer season, after about five quarters of single-digit growth in the country. RJ Corp, PepsiCo's largest bottler in South Asia, will look to accelerate its growth in the country and bridge the gap with Coca-Cola, which makes Coke, Thums Up and Sprite fizzy drinks and holds 56% market share in India, going by estimates of market researcher Nielsen shared by industry insiders.

• iPhone as a Gift? Luxury Brands are Wooing Indians: When Lamborghini luxury launches its $7,000 (₹ 4.3 lakh) mobile phone here early next year, the company will justify the price tag by focusing on technology, aesthetics, personalised features and desirability of the product. But it won't be just that. Going to the next level of wooing the rich but value seeking Indian buyer, the pricey phone will come with a brand new iPhone, which will reach the owner's “doorstep as a surprise.“ The company marketing and selling the upcoming Lamborghini phone is experimenting. “We'll give them an iPhone just to play with,“ says Deepak Kumar, MD of Luxury Quotient India, which will launch the 200gram Android dual-SIM phone with rose gold plating and expensive leather back. With freebies being slipped in, India is a sharp contrast to the world of luxury , where offering cash discounts is forbidden and what matters are only product quality and the buying experience. Whether it's a discount coupon, a free silk tie with an expensive Italian jacket, or complimentary room nights for cardholders of MNC banks, India is an exception compared with the West. High-end clutch maker Judith Leiber, for example, for the first time sent out gift vouchers worth ₹ 30,000 each to its top 300 clients this festive season. This effectively means a discount of 10-15 % on the next purchase. The move was initiated by the Indian partner with permission from brand's headquarters. American Express Centurion cardholders in India are offered free stays in five-star hotel suites on occasions such as birthdays, a practice exclusive to the Indian market.

• TaxiForSure in Talks to Raise $60 Million: Taxi services aggregator TaxiForSure is in talks to raise fresh capital of over $60 million, barely three months after its last round of funding, as it battles with rivals Ola and Uber in the fiercely competitive Indian taxi market. The deal is expected to close in the next eight weeks with the Bengaluru-based company's existing investor joined by at least two new backers said two people with direct knowledge of the on-going negotiations. “The deal could be in the range of $60-100 million,“ said one source indicating the money will be used to aggressively expand services in new cities and develop technology . “We are looking for an investor who is strategic and deep pocketed,“ said Aprameya Radhakrishna, co-founder at TaxiForSure, who confirmed the talks but declined to discuss specifics. “Investor chemistry has to match and more importantly we have to get to a valuation which is in agreement to both,“ said the graduate from the Indian Institute of Management in Ahmedabad. In August, the company raised around $30 million, led by venture capital fund Accel Partners US, with existing investors Accel India, Bessemer Venture Partners and Helion Venture Partners participating. The Indian taxi aggregation space has seen exponential growth in the last couple of months, with Ola, TaxiForSure and Uber fighting for a share of the Indian taxi market estimated to have a value between $6 billion (Rs. 54,000 crore) and $9 billion (Rs. 36,000 crore), of which only 4-6% is organised.

• Zomato's an Example of Investment Appetite: For those looking for an object lesson in how promising ecommerce startups are valued, restaurant guide Zomato is a shining example, according to observers and participants in the thriving world of Indian entrepreneurship. Zomato, based in Delhi, had an operating loss bigger than its top line, but investors fell over each other to buy a stake in the fast-growing company with global ambitions. So when it raised money in November 2013, the startup, then five years old, was valued at nearly ₹ 1,000 crore. That is 32 times its operating revenue of ₹ 31 crore. For comparison, the 22-year-old Speciality Restaurants Group which owns brands such as Mainland China, Oh! Calcutta and Machaan, earned revenue of about ₹264 crore last year but is valued at just about . 896 crore on the stock market. What ` is happening here? “It's a return of the internet boom when companies were valued on the number of clicks. Investors are comparing equivalents in e-commerce to US counterparts and are betting on future upside from India,“ said Rishikesha T Krishnan, director and professor of strategic management at IIM-Indore. “The stock market is also valuing such internet firms higher as there is a sentiment that e-commerce might impact brick and mortar businesses like it did to books in the US.“ Yelp, the US-based company that Zomato regards as its rival, is listed on the New York Stock Exchange and it is valued at $4.2 billion (₹ 26,000 crore). Its revenue in 2014 is forecast at $376 million, valuing the company at 11 times its sales. “The number of food orders an app or a website can process are potentially far higher than any large restaurant chain even if it's full every day of the week. This explains large valuations of e-commerce companies,“ said Rohit Chaddha, founder and CEO of FoodPanda, an online food ordering portal backed by Germany's Rocket Internet.

• Tata International launches Aerosoles shoes: Tata International, a global trading and distribution company of Tata Group, today said it has commercially launched the American women's footwear brand Aerosoles in the domestic market. US-based Aerogroup International and Tata International had first announced the strategic alliance between them to produce and market Aerosoles brand in Europe and India in 2012. Tata International had acquired the licensing agreement for 35 years. The Tata Group company invested USD 1.5 million as an initial investment into the brand. "We have already invested USD 1.5 million to start off in terms of merchandise and in terms of shop refits and advertising. Going forward, the investment will come in a phased manner," Tata International global business head for footwear and leather garments N Mohan told . He added that the company would make a total investment of USD 3-4 million in the next three to four years. Aerosoles is eyeing a revenue of Rs 180 crore in the next three years from India. "We plan to sell 5 lakh pairs of Aerosoles, which means about Rs 180-200 crore in the next three years. Europe is about Rs 180 crore as of now and we have plans to go to Rs 300 crore in the next three years," Mohan said. The company has tied-up with multi-brand retail outlets like Metro Shoes, Regal Shoes, Rocia, Inc 5 and Tata company Westside.

• Godrej Group banks on e-commerce to achieve Vision 2020 target: Godrej group, which is eyeing a ten-fold increase in business volumes within a decade, is banking heavily on e-commerce to achieve its 'Vision 2020' target. "For us, e-commerce is an extremely important channel going forward. All our businesses are focusing on e-commerce for sale of products. Though the share of e-commerce in our group is restricted to single-digits, still, we do see some leads," Godrej Group Executive Director and Chief Brand Officer Tanya Dubash told today. For each vertical, it studied what is the best e-commerce fulfilment method and it is implemented, she said during the sidelines of launch of non-web based, mobile browsing experience, FreeG and a consumer connect initiative Masterbrand 2.0. Commenting on 'Vision 2020', she said that her company has been witnessing a Compounded Annual Growth Rate of 26 per cent on a year-on-year basis, which was a satisfactory pace. In the appliance segment alone which currently has an annual sales turnover at Rs 2,600 crore, the group envisages 6-8 per cent business revenues coming from e-commerce channel by 2020 in the segment.

International:

• Alexander Wang Opening First London Store: Alexander Wang will open his first London shop on Albemarle Street in Mayfair early next year in the latest wave of international brands rolling into the neighborhood. Wang will join brands including Paul Smith, Amanda Wakeley, Buccellati and Garrard & Co. on the street, which is fast evolving from a quiet thoroughfare dotted with galleries and fine art dealers into a retail hotspot. The Alexander Wang shop, at 43-44 Albemarle Street, will span 6,500 square feet, according to a report on central London retail by British estate agents Knight Frank. Eataly, meanwhile, has joined forces with Selfridges to open its first London food hall at the latter’s flagship on Oxford Street. The luxury Italian food chain already has international units in cities including New York, Chicago, Istanbul and Tokyo. In its winter 2014 report on central London retail, Knight Frank said average vacancy rates in central London have fallen to under 3 percent, with retail rents and capital values continuing to grow. Tourism, the company said, has been a big boost to growth so far this year.

• Gucci Marks Moscow Expansion: One of the world’s worst-performing currencies this year, an economy teetering on the brink of recession and a sliding oil price have not deterred Gucci from boosting its presence in Russia, as the luxury Italian brand marked a new milestone with the official launch of two flagships in Moscow last week. Gucci celebrated the opening of its two new units in central Moscow –– which together cover almost 21,600 square feet –– with a lavish party, the unveiling of a new women’s collection and a special exhibition. The events included a cocktail reception in the Petrovka shop and a dinner for executives and Russian celebrities who were serenaded by American singer and songwriter John Legend.

• Akris Opens Palm Beach Location: Akris continues to grow its U.S. retail presence. The St. Gallen, Switzerland-based brand opened an 878-square-foot unit at 150 Worth Avenue in Palm Beach, Fla., last week. This brings the number of freestanding Akris stores in the U.S. to five. The other four are on Madison Avenue in New York; Collins Avenue in Bal Harbour, Fla.; Newbury Street in Boston, and Highland Park Village in Dallas. The Palm Beach location features some details that are unique, along with more familiar Akris design elements and furniture, such as matte marble floors, a dark brown leather armchair and a trapezoid table designed by Hilmer & Sattler und Albrecht. The store opened shortly after the company named Peter Herink chief executive officer of North America.

• Petit Bateau Stores to Open in China: Petit Bateau and Fung Kids Ltd., a subsidiary of Fung Retailing Ltd., have inked a distribution partnership to open stores in China selling the French label’s baby and children’s apparel. Petit Bateau’s first boutiques in China are to open in Beijing, Shanghai and Qingdao in 2015. Yves Rocher of France owns Petit Bateau. Hong Kong-based Fung Group’s diversified holdings include trading, logistics, distribution and retailing.

• Nancy McKay Joins Nest Fragrances as CEO: Nancy McKay, a 28-year veteran of the Estée Lauder Cos. Inc., will join Nest Fragrances as chief executive officer at the beginning of the year. Founder Laura Slatkin moves up to executive chairman while rolling out a dramatic growth campaign, driven by an expansion of distribution overseas. At Lauder, McKay recently became senior vice president and general manager of the Lauder brand, Tom Ford Beauty and Aerin Beauty. Her skill set and experience is what Slatkin said the home fragrance and fine fragrance company needs right now. “Nest Fragrances is at important crossroad,” she observed. “We’ve experienced a significant amount of growth over the past few years. A strong, seasoned team is necessary to guide the company and take advantage of the tremendous potential that lies ahead.”

• Mr Porter Names New Creative Director: Mr Porter has named Ben Palmer as its new creative director, the online men’s fashion retailer said Tuesday. Palmer’s appointment will be effective from early next year and he will report to John Brodie, editor-in-chief of Mr Porter. Palmer replaces former creative director Leon St-Amour, who left the company earlier this year. The role will see Palmer responsible for the “visual look and feel of the brand,” the company said, overseeing designers working on the editorial, marketing and video assets for the e-commerce site; The Journal, Mr Porter’s online weekly magazine; emails and The Mr Porter Post, a broadsheet that the retailer publishes eight times a year. Palmer joins the retailer from Burberry, where he is currently head of creative media, design-events. In that role, he is responsible for conceptualizing, developing and executing all creative aspects of the label’s global events. Prior to that, Palmer was head of creative media design for Burberry.

• Chaumet Appoints New CEO: Thierry Fritsch, the longtime chief executive officer of Chaumet, is passing the torch.Jean-Marc Mansvelt, currently leather goods and accessories director at Louis Vuitton, is to take over the management helm of the Paris-based jeweler effective Jan. 1. Both Chaumet and Vuitton are controlled by LVMH Moët Hennessy Louis Vuitton. Bernard Arnault, chairman and ceo of LVMH, commended Fritsch for his 14 years of service. Fritsch, 59, plans to ensure a good transition and will exit LVMH to pursue other interests. “We are grateful to Thierry for the contribution he has made to the prestigious maison of Place Vendôme. Under his watch, Chaumet has developed into a global player with a precise identity. Jean-Marc will build on these foundations, and take it to the next level,” Arnault said.

Tech:

• It's For `Yu', Micromax Tells its Customers: Micromax, India's No. 2 handset vendor, plans to do a Xiaomi by launching a range of products branded `Yu' to be sold and serviced exclusively online, starting next month. The first product from the newly floated, wholly owned unit Yu Televentures will be a smartphone with an operating system from US-based Cyanogen, through which the company aims to move beyond the business of mobile phone hardware that has become more or less standardised. The smartphone, which will be pitched as an affordable product, will be launched in India and then in developed markets, given its sophistication, Micromax founder Rahul Sharma said. “We're targeting all tech enthusiasts who will be able to bootstrap the device and play with it,“ he said. Bootstrapping refers to extensive customisation of a phone's operating system, which may lead to voiding of the warranty of the device. Sharma said Micromax will continue to honour the warranty period. Users will be able to make hundreds of customisations on the new device, the features of which may be revealed on Yu's website when it goes live at the end of this month. The website will also support after-sales services. 

• Nokia Back in Devices Arena with New Tablet: Within a year of selling its handset and services business to Microsoft, Nokia has again entered the mobile devices segment by unveiling tablet N1 in partnership with Taiwanese company Foxconn. Nokia's first tablet since sale of its devices business to Microsoft in about $7.2 billion in April this year is built on the latest Android platform Lollipop. Foxconn, which also makes Apple iPhones, will be responsible for full business execution, from engineering and sales to customer care, including liabilities and warranty costs, inbound IP and software licensing and contractual agreements with third parties. Nokia has extended its brand name and some of its patent technologies for the product. To begin with, the N1 tablet will be available from the first quarter of 2015 in China for $249 before taxes and gradually in other markets. “We are pleased to bring the Nokia brand back into consumers' hands with the N1 Android tablet, and to help make sophisticated technologies simple,“ Nokia Technologies Head of Products Sebastian Nystrom said in a statement. ny said N1 will be The company said N1 will be brought to market through a brand-licensing agreement with an original equipment manufacturer (OEM) partner responsible for manufacturing, distribution and sales. Though Nokia did not disclose the name of OEM, sources identified the original equipment maker as Foxconn. Foxconn has a manufacturing facility near Chennai close to Nokia unit where mobile production is suspended post its deal with Microsoft. “This is a great product for Nokia fans and everyone who has not found the right Android tablet yet,“ Nystrom said.

• Netflix coming to Australia and New Zealand in March 2015: Netflix made a surprise announcement today that its service will be opening in Australia and New Zealand starting March 2015. The company said that “users in Australia and New Zealand will be able to subscribe to Netflix and instantly watch a curated selection of popular movies and TV shows in high-definition or even 4K where available.” Netflix’s use of “curated selection” in the press release suggests that it will have a limited selection of content at launch compared to its US counterpart. The company didn’t provide details or pricing for the service in these new countries, saying that it will provide those details at a later date and that those interested in the service should sign up to be notified when it launches at Netflix.com.

• Google Kicks Off Competition To Find The Best Fit Apps: Google’s already looking to push its newly released fitness platform harder with developers, so has announced a new competition for those who build unique apps that utilize the API. The competition, which starts today and ends on February 17, 2015, asks developers to build an app that integrates with Google Fit in an innovative way. Winners will receive a feature on the Google Play Store, free wearable devices and more. The Google Fit Developer Challenge is open to those in the US, UK, France, Germany, India, Israel, Hong Kong, Singapore, South Korea, Japan and Taiwan that are over 18 years old. Any old app won’t cut it, though, with the company saying that it’s looking for apps that meet the Android “design and quality” guidelines, offer real benefits to users and keeps them coming back.

• Meet Apple's new font, designed for its smartwatch: Today, Apple announced its developer tools for its forthcoming Watch which included a number of resources and tools for developers to get started building apps. Quietly included in the human interface guidelines is a new font dubbed “San Francisco” that’s designed for use on the Apple Watch. The font, which the company is giving away for free, is a Sans Serif typeface designed with the Apple Watch in mind. The font comes in two styles, “Regular” and “Display” which Apple recommends switching between based on what size will be used on the Watch display. Whether by coincidence or intentionally, Apple had another font called San Francisco previously that was one of the first fonts to ship with the Macintosh. 

• Google will give you $5 if you get a friend to use Google Wallet: If you can’t beat them, give them money. Today Google announced a referral program for Google Wallet to help kick start adoption of the service. Current users that send cash via Google Wallet to friends that don’t yet have a balance will be rewarded with $5. You can send as little as a penny to enable the referral bonus and you can get up to 20 referrals for a grand total of $100. Unfortunately, there are rules. Both parties have to be in the US and it’ll need to be your friend’s first time having a Google Wallet balance. The promotion will end on 11/30/2014 or when Google hits 20,000 referrals.