Daily News Digest- 8th Dec'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• E-tailers beef up logistics for GOSF: E-commerce companies and their logistics partners seem to have learnt their lessons from the innumerable delivery bloopers and delays that happened during the Diwali sales this year. Ahead of Google's Great Online Shopping Festival (GOSF) from December 10 to 12, online retailers and logistics companies alike are preparing for the deluge of orders, even as several courier companies are still recovering from the backlog they have from the previous big online events. This year, the GOSF has about 450 companies participating, almost twice as many as last year, and also has a special section offering products at Rs 299 with free shipping and cash on delivery . Most online retailers are expecting thrice as many orders during the event compared to regular days.From hiring supply-chain experts, increasing capacities and poring over customer trends to predict demand, companies are going all out to get the deliveries right this time.

• Now, use your debit card for inter- bank fund transfers at ATM centres: If you need to transfer money from, say, your YES Bank account to a customer of Union Bank of India, you can now do so through your debit card, by visiting an automated teller machine ( ATM). Union Bank of India, Canara Bank, Andhra Bank, Saraswat Co- operative Bank and YES Bank have come together to allow inter- bank fund transfers through debit cards. “For this card- to- card transfer, a customer has to go to the ATM and just punch in the debit card number of the person to whom he or she wishes to transfer money. You have to type the 16- digit debit card number of that person in the ATM and the amount you want to transfer. Immediately, once you confirm ok, your account gets debited and the other person’s account linked to the card gets credited. This is an instant fund transfer,” said a senior Union Bank of India official, explaining the transfer process. Initially, the amount allowed to be transferred is a maximum of ₹ 5,000 a day and ₹ 25,000 a month. Aspy Engineer, president & country head (ATM management & currency chest) at YES Bank, confirmed the bank had been running this facility for its customers for a while, and the response so far had been encouraging.

• Flipkart might lie low on next mega funding: Leading e- commerce entity Flipkart is expected to begin the new year with another round of funding, perhaps crossing the $ 1- billion figure. However, the company might not make any announcement on the mega funding, unlike the previous occasion, in July. At that time, co- founders Sachin Bansal and Binny Bansal had made a public announcement at a Bengaluru hotel, about a $1- billion fund raising, largest so far in the Indian e- commerce sector. A day later, Amazon issued a statement that it was investing $ 2 billion in India. A source said Flipkart was not keen on attracting attention due to fund raising. In the recent past, the $ 1- billion funding was a part of the discourse even when it came to other developments around the company, such as the ‘ Big Billion Day’ sale and offline- online war, the source said. Chief executive Sachin Bansal has stayed away from interviews over the past couple of months, to indicate his focus is on business. 2014 has been a year of blockbuster funding for e- commerce companies, a $4- billion market. Beside Flipkart’s $ 1- billion funding in July, Snapdeal had raised $627 million from Japanese investor SoftBank in October. Since no e- commerce company in the country is listed, they hardly ever publicised their fund raising till recently. While talk of mega bucks being raised from foreign investors brought e- commerce in the bracket of big league, it also meant a fair share of controversy to the players. Among other things, the foreign investment going into these companies has been under scrutiny. Foreign investment is not permitted in e- commerce but there’s no rule barring it in a marketplace model.

• Carmakers Accelerate Production on Excise Uncertainty: December is typically a lean month for carmakers because of weak customer demand, but this year, uncertainty over continuation of excise duty beyond the year-end is forcing them to maximise production. If the government doesn't extend the deadline further for the 4-6% excise duty reduction announced in February, car prices could go up in the New Year, by as much as Rs. 50,000 on popular sedans like the Honda City and even more on some other models. Carmaker are anticipating a spurt in demand in the next few days from buyers, who could advance their purchase decision in the absence of clarity on the duty stimulus going beyond December. “As there is no clarity with regard to the excise rate being altered or extended, we have decided to equip our dealers with stocks in order to pass the benefit of lower excise to customers,“ said Rakesh Srivastava, senior vice-president for marketing and sales at Hyundai Motor India. The previous Congress-led government announced the duty cut during its interim budget to boost demand in a sector where sales had shrunk for two consecutive years. While that relief was until the end of June, the current BJP-led government extended the cut to end-December. But before that announcement came, sales had jumped in June as people expected the tax relief to end in June. The industry posted this fiscal year's highest jump in sales at 15% in June, and auto makers are expecting a similar experience in December. 

• `Ad Spend in India may Grow 12% to Over Rs. 40k cr in 2015' `: Advertisement expenditure in India can grow 12% to Rs. 40,307 crore in 2015 if the current positive consumer and business sentiment holds, according to ZenithOptimedia global ad spend forecast. This growth will be fuelled by print at 12%, TV at 10% and online and mobile at 25%. Other media are expected to grow between 5% and 10%. At the beginning of 2014, the agency had forecast that the Indian advertisement market would grow 10.7%. It is now expected to end the year with at least 10% growth. The report categorises India as one of the ises India as one of the fast-track Asian mar kets along with Chi na, Indonesia, Ma laysia, Pakistan, the Philippines, Taiwan, Thailand and Viet nam. According to it, these economies are growing rapidly as they adopt western technology and practices, while benefiting from rapid inflow from investors hoping to tap into this growth. The Asian advertising market appeared less affected by the 2009 downturn -ad expenditure grew by 7.4% that year -and since then has grown strongly . It is expected to end 2014 with 10.1% growth, and the report predicts that this market will grow by 10-11% a year for the period 2015 to 2017.

• SpiceJet's Poison Could be Aviation Industry's Cure: The aviation regulator's directive to SpiceJet to limit advance bookings to just a month and its withdrawing 186 flights are likely to increase airfares substantially in the future, which may disappoint passengers but bring some respite to its peers. The budget airline had recently unleashed a string of special fares, often catching competition off guard. While some airlines feel that the regulator's action would lead to sanity in pricing, others feel that it would actually result in competitive pricing for last-minute bookings. Some analysts reckon that spot fares are indeed expected to soften as SpiceJet will increasingly compete in this space in the coming days. “If limiting bookings to one month for SpiceJet continues, the airline will have to fill all its seats in the past one month. This would only lead to aggressive pricing by the airline in the past one month to fill its seats, hence, a fare war in the last-minute bookings. This surely won't be good for the aviation industry,“ said an Air India official. “There would definitely be some sanity in pricing because of the move, at least in the short term. For the past few months, SpiceJet was the only airline which had pushed the industry into spates of flash sales, which were often not conducive to margins,“ said another executive with a domestic carrier.

• Telangana preparing to flaunt its quick-approval mechanism by clearing IKEA, Coca-Cola proposals: A week after unveiling its industrial policy incorporating right to clearances within a fortnight, claimed to be the world's first, Telangana is now preparing to showcase its quick-approval mechanism by clearing two large foreign investment proposals. The world's largest furniture retail chain, IKEA, and beverages giant Coca-Cola are set to get quick approvals for their projects. While IKEA chose Hyderabad for its first India store with a proposed investment of $100 million (about Rs 620 crore), Coca-Cola has evinced interest in setting up a Rs 1,000-crore facility near the state capital. The move from the country's newest state assumes significance in the backdrop of the proposed Hyderabad visit of IKEA's India chief executive, Juvencio Maeztu, sometime this fortnight.

• Amway to make India regional hub; says growth has slowed down: Direct selling major Amway plans to make India an export hub for its operations in Middle East and South Asian countries, even as its business growth here has slowed down due to lack of clarity for applicable regulations. The company also said there is an urgent need for detailed regulations to distinguish genuine direct sellers from sham players and to give a sense of legitimacy to the industry. "We need more clarity in the regulations so that the growth level is up. Few years ago, it had a very strong double digit growth which has slowed down and there is a need for a better understanding of legitimate direct selling company," Amway Managing Director & CEO William S Pinckney said. Amway, which is setting up Rs 600 crore unit at Nilakottai in Tamil Nadu is also looking for further expansion along with additional plant as the company is mulling to make India a hub for its Middle East and neighbouring countries as Sri Lanka, Bangladesh etc.

• Domestic i-banks increase focus on e-commerce as deal flow picks up: Local investment banks (i-banks) are setting up dedicated teams to pitch for assignments from the country’s e-commerce companies in a bid to capture a slice of the frenzied deal activity in the booming industry where companies such as Flipkart and Snapdeal are raising billions of dollars in new funds. Over the past six months, Kotak Mahindra Capital Co. Ltd, Motilal Oswal Financial Services Ltd, Equirus Capital Pvt. Ltd, Axis Capital Ltd and Edelweiss Financial Services Ltd have zeroed in on e-commerce as an area they would focus on. Some have put up new teams to target business from the sector. Some domestic investment banks including Avendus Capital have already managed some transactions including Quikr, TaxiForSure and BookMyShow.

International:

• Amazon Gets $5 Million From N.Y. to Bring 500 Jobs to Manhattan: Amazon.com Inc. is getting $5 million in tax credits from New York state to bring 500 jobs to a property across the street from the Empire State Building. The online retailer is opening an office at 7 W. 34th St. in the Herald Square shopping district in a building owned by Vornado Realty Trust, according to the Empire State Development Corp. The agency awarded Seattle-based Amazon credits to help lure the office to Midtown Manhattan. “We are proud to have attracted Amazon’s latest expansion and are excited about the 500 new jobs their move will create,” Kenneth Adams, president of Empire State Development, said in an e-mailed statement. “We look forward to building on our partnership and wish them continued success in the Empire State.”

• Bebe Stores Confirms Card Breach: Add Bebe Stores Inc. to the list of retailers that have suffered a cyber attack just as the holiday season was getting started. The Brisbane, Calif.-based specialty-store retailer acknowledged on Friday that customer payment card data were accessed from its payment-processing system from Nov. 8 to Nov. 26, the day before Thanksgiving. The breaches affected customers only at its stores in the U.S., Puerto Rico and the U.S. Virgin Islands and didn’t involve either stores in Canada or the Web site. The data taken might have included cardholder names, account numbers, expiration dates and verification codes. Bebe declined to specify the number of customers who might be affected. It advised consumers to review recent transaction records and notify banks of any unauthorized activity; the company also offered credit monitoring to customers who made purchases at its stores during the specified dates.

• Stefano Caroti Resigns as Puma CCO: Puma said Stefano Caroti has handed in his resignation as chief commercial officer, effective Dec. 31. According to the German activewear brand controlled by Kering, Caroti, who has held the position since 2008 and is also a board member, is leaving “at his own request” and “for family reasons.” Puma said it was accepting this request “with great regret” and thanked the executive for his “high engagement and his successful service.” Puma’s chief executive officer Bjørn Gulden is to take over Caroti’s responsibilities on board level, effective Jan. 1.

• Michael Barnes Named CEO of Francesca’s: Michael Barnes, who headed Signet Jewelers Ltd. and orchestrated its $1.46 billion acquisition of Zale Corp. earlier this year, has been named chairman, president and chief executive officer of Francesca’s Holdings Corp., the Houston-based apparel and accessories retailer. As president and ceo, Barnes succeeds Neill [FOLO: Neill] Davis, who has resigned. Greg Brenneman, who has served as chairman since 2010, has been named lead director. Barnes became ceo of Signet in 2011 following a more than 25-year career at Fossil Group, where he was president, chief operating officer and a director for three years beginning in 2007.

• Aer Lingus boss chosen to be new Malaysia Airlines chief: Malaysia Airlines has chosen Aer Lingus boss Christoph Mueller to be its chief executive-designate. The Malaysian airline, which has been hit by two disasters this year, also made other leadership appointments. Mr Mueller will will be the first-ever foreigner to head Malaysia Airlines (MAS). Last month, MAS posted its worst quarterly loss since late 2011, as passenger numbers and average fare yields fell sharply. Khazanah Nasional, Malaysia's sovereign wealth fund and MAS's parent company, said discussions were continuing for Mr Mueller to assume his new post before 1 May 2015, but no earlier than 1 March 2015. Mr Mueller's Aer Lingus notice period ends on 1 May. "The appointments announced today are part of efforts by the government and Khazanah to lay strong foundations for the future success of our national carrier," Malaysian Prime Minister Najib Razak said.

Tech:

• Great Google Mystery: The Missing Nexus: This tale from a technology sector CEO illustrates an unusual thing about an iconic global technology giant. Vijay Shekhar Sharma, CEO of Paytm, is a devoted fan of Google’s Nexus smartphone. Sharma is waiting to upgrade to Nexus 6 and has to wait patiently till it’s available online on Flipkart, which is the only Indian outlet, online or offline, for the phone. The Paytm CEO’s frustrating experience is shared by many, many Nexus smartphone fans. Google, as formidable a marketing machine as any globally, has put its weight behind low-cost Android One phones in India, spending ₹ 100 crore in the project. Nexus, on the other hand, is not marketed by Google and is rarely marketed by its hardware partners LG, Motorola and HTC either. Even as Android One had a tepid start, market analysts and retail sts and retailers say Google is missing a trick by not promoting the pricier Nexus phone more. “Instead of focusing on Android One, it would be a good call for Google to sell Nexus offline as it is a flagship product that has a good pull,“ says Satish Babu, founder of Chennai-based retail store chain UniverCell Mobiles, one of several large format chains willing to stock Nexus 6. “There are takers for Nexus even at the high price,“ Babu said. He compared this with cheaper Android One phones, which have had a not-so-impressive run since their launch a few weeks back. Other mobile brick and mortar retailers — for example, Himangshu Chakravarti of MobileStore — agree with UniverCell Mobiles’ Babu. They say there’s a lot of latent demand for the high performing Nexus phone but supply is a problem, and Google can tap that by selling offline.

• Sony Employees Threatened by GOP Hackers via Email: e hackers calling themselves #GOP have struck again, this time sending threatening emails to Sony Pictures Entertainment employees. Variety obtained a copy of an email sent by the GOP group to Sony employees. In it, the group threatens both employees and their families. Sony told Variety that it is aware of the situation and is working with law enforcement. There is a portion of the email that calls for employees to sign their names via an email address or “suffer damage”. On November 24, Sony Entertainment’s computer system was hacked with employee computers displaying a splash screen from a group calling itself GOP.

• Dolby is launching its super-vivid IMAX theater competitor in the Netherlands: Dolby has just announced a huge new project, but it's not about audio as you'd expect -- it's about the upcoming launch of its IMAX competitor called Dolby Cinema. This giant screen format will be able to project movies using the "Dolby Vision" technology (something it's been working on for years), which combines high dynamic range videos with something else that the company's keeping a secret. High dynamic range or HDR videos, as you might know, can show shadows and light as you'd see them in real life (take this Disney Research video, for example). Dolby goes as far as to claim that its technology's "contrast ratio far exceeds that of any other image technology on the market today." The company plans to open its first outlet this December in the Netherlands, but it will temporarily use 4K laser projectors until the Dolby Vision-capable ones are ready to ship out next spring. Of course, venues will eventually open in the US, but probably not any time soon, as Dolby's still busy negotiating with both theater owners and Hollywood studios. For the format to reach audiences, the company will not only need to convince local movie houses to shoulder part of the cinema's construction costs, but also to persuade studios to make their films Dolby Vision-compatible during postproduction. It needs to convince a whole lot of people, in fact, for the technology to be financially viable and be able to compete with IMAX.

• Uber rolls into Portland, Ore., despite city regulations: Despite its recent pledge to be a "more humble company," Uber continues to be defiant of government regulations: this time in Portland, Ore. The ride-sharing service began operating in Portland on Friday, regardless of the fact that city officials have deemed the service illegal. The company is rolling out its low-cost UberX service, which lets passengers use a smartphone to get rides from drivers who use their own cars. The Oregonian first reported on Uber's launch in Portland. In response to news of Uber's launch, Portland transportation officials said the city is prepared to issue civil and criminal penalties against Uber and its drivers for "operating without required permits and inspections."

• Microsoft: Windows 10 on track for latter half of 2015: On Thursday, Turner covered Windows 10, along with Microsoft's evolving business model, during his appearance at a Credit Suisse technology conference in Phoenix, Ariz. Turner told attendees that Microsoft is still on track to "talk about the end-user consumer experiences in the early spring" of 2015. He also said Microsoft will have a "developer preview" in early summer.