Daily News Digest- 4th Dec'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Retailers’ Private Labels Lose Steam to Competition: Big retailers’ own brands, which had started eating into the market share of mainstream consumer brands, have taken a hit in their overall market share in recent years with retailers turning less aggressive, and some private labels being pulled from shop shelves. According to a global report by market researcher Nielsen, share of Indian private labels now stands at 4.5% of overall supermarket sales, 220 basis points less than their share in 2010. Indian retailers started pushing their own brands around eight years ago, at lower prices vis-a-vis national brands, in a bid to boost their profit margins when national brands were consistently negotiat ing lower retailer cut. The initial success of such labels prompted retailers to aggressively launch their own brand across product segment. But their appeal waned when major consumer product companies resorted to promotional offers and matched private label pricing by operating in tighter margins even as an overall slowdown made consumers look for bargains. According to experts, one mistake several Indian and Asian retailers made was to bring out a flurry of products without waiting for their private labels to gain acceptance.

• After Pepsi & ITC, Balaji to Now Challenge McCain: Balaji, one of the largest regional potato wafers and snacks brand, will soon foray into French fries and other frozen potato specialty products, a top company official said. “Our French fries plant would be ready by May 2015,” said Chandu Virani, MD of Balaji Wafers. Currently, McCain Foods (India), a wholly-owned subsidiary of its Canadian parent, rules the potato specialty market with frozen products such as French fries, aloo tikka, McCain Smiles and McCain Potato Cheese Shotz. Balaji will enter this space through Iscon Balaji Foods, which currently manufactures ready-to-cook potato flakes. The firm, which has a strong backend supply of potatoes, will manufacture french fries near Ahmedabad. “French fries is future…everyone is eating that,” said Virani who recently visited machinery manufacturers in Germany for the new project costing about ₹ 50 crore. Neel Kotak, MD and CEO at Iscon Balaji, said, “We will have a number of potato speci ality products, including Indianised innovations to compliment french fries.“ While french fries plant would be up and running by May, other products would be launched by October. The products would be made available for quick service restaurants and institutional buyers, apart from selling directly to consumers at organised re tail stores. tail stores.

• A Monsoon of Crores Arrives at IITs Just Ahead of Winter: Top international recruiters Facebook, Oracle and Google have rolled out at least 40 offers with total compensation packages higher than ₹ 1 crore at the end of only the second day of IIT campus placements, according to campus sources. Such a large number of crore-plus offers -including cash and stock -are being offered for the first time. Oracle is leading the charge, offering up to 4,800 stock units worth $200,000 (₹ 1.24 crore), besides a $125,000 (₹ 77.5 lakh) cash component. Sources from IIT BHU (Varanasi) con BHU (Varanasi) confirmed these figures. Sources from IIT-Delhi, IIT-Roorkee and IIT-Kanpur said some 4,000 stock options had been indicated as part of the overall package by the American multinational computer technology corporation.

• Govt Opens Avenues for eCommerce Cos with Niche Banking: Electronic payment companies like Paytm, Mobikwik, Itzcash and Oxigen are queuing up to explore the newly-introduced niche banking space which will ease digital money transfer and help e-commerce companies to expand into smaller cities and towns. With 41% of unbanked population in India, payments banks are expected to provide them with access to electronic transactions, opening up an opportunity for electronic payment companies to expand significantly. “The opportunity is significant but at the same time there are regulatory considerations that we will have to match up,“ said Satyen V Kothari, managing director and founder of Citrus Payment Solutions. “Given the nature of the Reserve Bank of India and how the government works in India, the regulatory compliance part needs to be considered,“ he added. RBI recently published guidelines for payments bank licences, for which applications can be submitted till January 16, 2015. The regulator has hinted that licences are likely to be issued early next fiscal. eCommerce firmss see it as an opportunity to grow customer base as it will increase the number of cardholders in the smaller towns. This will enable cardholders to transact online with ease and provide access to sites, making it a win-win situation for both businesses and consumers.

• With huge order placed, Boeing keeps faith in SpiceJet: With an order for 42 Boeing 737 Max worth $4.4 billion from crisis-ridden SpiceJet, the US aircraft major hopes that SpiceJet's strategy of “shrinking now and expanding later“ -a reference to SpiceJet's ruthless fleet reduction -would work. Boeing commercial airplanes (VP-sales) Dinesh Keskar was in India recently and told TOI that the delivery of 737 Max to SpiceJet, Boeing's answer to Airbus' successful A320 Neo, begins from 2018 onwards and by then the lowcost carrier (LCC) “will find a way out“. SpiceJet had ordered 42 Boeing 737 Max at the Hyderabad air show this March.But today , the LCC is struggling to survive by returning planes and drastically cutting flights. “I am not much worried.Their strategy is of shrinking now and expanding later. When you are hurting, the last thing you want to do is to expand. Anyway , Spice Jet is supposed to start getting the Max from 2018 onwards,“ Keskar said.SpiceJet is today flying 22 Boeing 737s -down from 35 in summer -and has cut over 50 daily flights reportedly due to a lack of funds that saw leasors taking back planes.

• Tata Starbucks opens second outlet in Hyderabad: Tata Starbucks Limited, a 50:50 joint venture between Starbucks Coffee Company and Tata Global Beverages Limited, today said it has opened second outlet here. The store, located at Forum Sujana Mall in Kukatpally, promises to offer another avenue for customers to enjoy the highest quality coffeehouse experience in their neighbourhood and takes the total store count to 61 across Mumbai, Delhi NCR, Pune, Bengaluru, Chennai and Hyderabad, a company release said. Avani Davda, CEO, Tata Starbucks Ltd, said, "We are humbled by the way our customers have embraced the Starbucks Experience across the country. Opening of the second store in Hyderabad is consistent with our long-term growth strategy to strengthen our presence in south India, extending our unique Third Place to more and more customers."

• Mobile apps: New e- tail battleground: With data showing Indian users spend an average 198 minutes each day on their smartphones, e- commerce companies in the country are now looking to tap this audience through their mobile phone applications ( apps). After Amazon Indias ‘ Appiness Day’ sale last month, where the company offered discounts exclusively for shopping on its mobile app, Flipkart has now followed suit. During December 8- 12, Bengaluru- based Flipkart will run its ‘ Big App Shopping Days’ special discounts. Additionally, to nudge users to download its mobile application, Flipkart is offering vouchers worth up to ₹ 1,200 from Makemytrip. com and Meru Cabs, among others, the companys website showed. According to sources at Flipkart, the company had planned its app- only sale much earlier. But Amazon was the first one to launch it. The initiative makes sense as Flipkart is now getting over 50 per cent of the traffic on its website from mobile devices, which is much higher during evenings and on weekends. A year ago, this number was less than 10 per cent. “Over the past year we have been seeing that there is an increase in growth coming from our mobile app. A majority of this growth is coming from outside of metro cities. So we are taking this opportunity to connect with our consumers better and grow the user base for our mobile app by having a shopping festival exclusively there,” Mausam Bhatt, senior director, marketing ( mobile and digital marketing), at Flipkart told Business Standard.

• IKEA planning to raise authorized share capital: More than a year after getting a green signal from the government to open stores in the country, IKEA, the world’s largest furniture retailer, is planning to increase the authorized share capital in its India entity. IKEA India Pvt. Ltd is seeking to expand its authorized capital to Rs.875 crore from the current Rs.70 crore to establish its retail operations in the country, according to documents filed with the Registrar of Companies (RoC) in November. The documents were filed with the RoC after the company’s last extraordinary general meeting, in which the furniture retailer said the “growth of the company’s operations requires augmentation of resources”, owing to which it has recommended an increase in share capital. The company has sought to increase the amount of equity shares issued from the current 70 million (in equity shares of Rs.10 each) to 875 million, by creating 805 million new equity shares of Rs.10 each.

International:

• Not reversing multi-brand law gives Walmart hope for retail: Six months after Wal mart relocated Scott Price from Hong Kong to its headquarters in Bentonville, Arkansas, to take on an international strategy position, the $473-billion retailer brought him back to oversee its Asia division as the world's largest retailer faces compliance issues, government regulation and lagging sales in China, Japan and India. Price has regained the responsibility of president and CEO of Walmart Asia, along with executive VP, international strategy and business development with the retailer, where he oversees mergers and acquisitions, real estate and corporate strategy . In an interview with TOI, he discusses Walmart's strategy for India, including a possible expansion into B2C e-commerce. Excerpts: There must have been some disappointment given that you had to change your plans from what you had originally envisaged? No, we have a global business and we have opportunities to invest around the world and it did not turn out to be the opportunity we initially envisioned and that's fine. We made some changes in India, we are very committed to the cash-and-carry format but I am very pleased by some of the signals by the new government to simplify the environment for investment in India. It's not about one company or one industry; it's about an overall environment that attracts capital.Every company looks at the world and decides where the best place to invest is. A lot of that investment comes from confidence in the regulatory environment. The last few months and some of the comments that have come out of PM Narendra Modi’s office are positive. We see it as a good opportunity. 

• Entrepreuners Go Online to Boost Business in Africa: When Chioma Achebe wanted to buy shares on the Nigerian Stock Exchange, she didn't want to open an account with a local broker because the process could take days. So she decided to create a website platform that would allow investors like herself to buy shares through their mobile phones and the Internet. She will launch the site, Afritrade, in July. "Retail brokers are more affordable but over-reliant on human intervention," she says. "AfriTrade solves cost and time inefficiencies with a low-cost, high-quality mobile investing platform that clients can use to directly access the market." Her story is similar to those of many entrepreneurs who have used the power of the Internet to make cumbersome tasks simpler. But she is also part of a generation of western entrepreneurs who are attracted to the unique opportunities in Africa.

• Japan's SoftBank invests $250m in GrabTaxi: Tokyo-based mobile carrier giant Softbank Corp said it has invested $250m (£159.2m) in one of Southeast Asia's fastest growing taxi app services, GrabTaxi. The move will make Softbank's internet and media arm the taxi app's largest investor. GrabTaxi was founded in Malaysia but earlier this year moved its headquarters to Singapore. It operates in 17 cities across six countries in Southeast Asia. GrabTaxi said it had raised $340m over the last year, including its investment from Softbank. The Tokyo firm's move will see two of its board members join GrabTaxi's board. More than $10m of GrabTaxi's total investment so far came from Vertex Venture Holdings, a wholly-owned subsidiary of Temasek, the Singapore government's investment arm.

• McArthurGlen to Open in Canada: McArthurGlen Group is opening a new Designer Outlet in Canada in Spring 2015, the group’s first unit outside Europe. The Vancouver Airport Designer Outlet, built in partnership with the city’s airport authorities, is located on the train line that links the airport to the city center. “This is an important challenge because we have to bring a European established model into a mature market as the North-American one”, said Roberto Meneghesso, country manager, Italy and regional operation director Southern Europe at McArthurGlen Group. The opening is consistent with the McArthurGlen Group’s international expansion plan which includes new units in Spain, Germany, France and Turkey. In addition, Vancouver is experiencing an increasing wave of Asian tourists, which is the focus of the group’s investment since the crisis of the Russian market.

• Children's E-tailer Melijoe Raises 9 million Euros: French children’s wear e-tailer Melijoe has raised 9 million euros, or $11.2 million, from Belgium capital investment firm Gimv and Paris-based CM-CIC Capital Privé, its historical shareholder. “This capital increase marks a key opportunity for Melijoe to further enhance our offering and services, while boosting brand awareness and international growth,” said Nathalie Christen-Genty, president and founder of Melijoe.com. The company said it aims to become the world’s leading children’s fashion e-commerce player by 2017. Launched in 2007 by Christen-Genty, Melijoe.com generates more than 50 percent of its annual turnover outside France, with Russia, the U.K., Germany and the U.S. representing its biggest markets.

• Palter DeLiso Unveils Flagship: Luxury shoe brand Palter DeLiso is staging a comeback. The 87-year-old brand — re-launched in 2013 by president Lauren Bruksch and creative director Taz Saunders — is set to ship its resort collection in a month, following the opening of its Beverly Hills flagship last week. “We were very focused on wanting to open a store early and it’s a strategic decision in that, as a brand developing a store, we have the ability to really make an immediate statement about who Palter DeLiso is and really immerse customers in our brand identity,” Bruksch said. Bruksch projects the store could do at least $1 million in sales in its first full year in operation. Palter DeLiso, named after the company’s founders Daniel Palter and Vincent DeLiso, sold women’s footwear and handbags up until the Seventies before it fell by the wayside. 

Tech:

• Ericsson Working on Tech to Beat Frequency Limits: Swedish telecom equipment maker Ericsson is working on a fourth-generation technology that allows communication services to move seamlessly across frequencies and technology standards and may help operators overcome restrictions from frequency shortage. Such a technology offers opportunities for spectrum-starved Indian operators, especially those holding frequencies in multiple bands. One of the major beneficiaries could be Reliance Jio Infocomm, the Reliance Industries' unit that has airwaves in the 1800 MHz and 2300 MHz bands and has yet to launch services. “Operators in India are challenged for spectrum, but as a result of it comes some of the best technology innovations,“ Arun Bansal, the company's radio business unit head, told ET in an interview. Ericsson's technology allows a call to be completed in different bands: a caller can uplink his voice onto the network in one frequency and get response in another. It is not possible at the moment ­ for instance, if the caller's phone is using 900 MHz band to uplink the voice, it will receive the respondent's voice in the same frequency band. 

• Google Launches New App to Help SMBs Succeed Online: Google on Wednesday announced the launch of an interface `Google My Business' here to help Indian small and medium businesses (SMBs) succeed online. Google said the new product, designed to work across both desktop and mobile devices (tablets and smart phones), will help small and medium businesses to create and update their business info on Google Search, Maps and Google+ from one place for free in both Hindi and English.

• Duck face, lolcat and respawn are among the new terms added to OxfordDictionaries.com: Language is always evolving, and as such the things we consider to be ‘real words’ change too. On that note, Oxford Dictionaries is announcing the addition of 1,000 new entries to its OxfordDictionaries.com website, the largest quarterly addition it’s ever made. Among the newcomers are choice internet slang for Instagram users like lolcat, duck face and man crush. Gamers get their spotlight with the additions of reswpan and permadeath. Then there are other highlights like Secret Santa, ‘the ant’s pants’ and Obamacare. It’s important to note these additions aren’t actually being added to the Oxford English Dictionary tome you might be thinking of. That book is meant to be a historical record covering the ‘core’ words of the English language. For its website, the group instead collects examples from about 150 million words from various souces.

• Google to Release Kid-Friendly Versions of Popular Products: A report from USA Today says that Google is working on new versions of its most popular products targeted directly at children 12-and-under. According to the report, Google Search, YouTube and Chrome are most likely to be up first, since they have “broad appeal.” Pavni Diwanji, the Vice President of engineering said that “The big motivator inside the company is everyone is having kids, so there’s a push to change our products to be fun and safe for children.” Yes, everyone can have children, but is it right to directly target products that track service usage at younger kids? The FTC requires companies to get parental consent before companies can use children’s data. Google isn’t going into this without expecting a fight, with Diwanji pointing out that “we expect this to be controversial, but the simple truth is kids already have the technology in schools and at home, so the better approach is to simply see to it that the tech is used in a better way.”

• Google's New CAPTCHA Is Easier For Proving Your Humanity: Google is today announcing an improved version of CAPTCHA that it’s calling the ‘NoCAPTCHA reCAPTCHA.’ While it sounds like a mouthful, the new service has some great benefits for users. We’ve known CAPTCHAs for years for their awful distorted text that’s hard to read and get right a lot of the time. Google set out to fix that a year and a half ago, when it discovered that it could teach computers how to beat the traditional CAPTCHA with 99.8 percent accuracy and realized that if it could do that, so could others. The new noCAPTCHA reCAPTCHA is the result, which makes it easier to prove you’re a human as an end user, over typing in distorted text. The new version simply offers a checkbox that says “I’m not a robot.” When you tick the box, Google performs a number of seamless checks using a “risk analysis engine” to determine if you’re human or not. If the noCAPTCHA thinks you are a human, you’re done and there are no more steps; it’s really that easy. It feels like a heavensend to use, too, if you’re like me and fail at basically every CAPTCHA the first time.