Daily News Digest- 9th Dec'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Uber, Ola, TaxiForSure Banned in Delhi Until They Get Licence: Online taxi-hailing service Uber has been banned from operating its services in Delhi and looks set to face speedbumps in other Indian cities, dealing a crippling blow to its ambitions in the country after its reputation for passenger safety was left shattered by revelations that the driver accused of raping a passenger was a serial offender. Late on Monday, the Delhi Transport Department issued a public notice saying only Mega Cabs, Meru Cabs, Easy Cabs, Chanson, Yo Cabs and Air Cabs were licensed to operate radio taxis and all other taxi services are illegal till licensed. This would mean other Ubertype app-based taxi services such as OlaCabs and TaxiForSure also stand banned from operating in the national capital region. Authorities in Delhi on Monday banned Uber's services in the city with immediate effect and also blacklisted the San Francisco based company's services after it emerged the driver accused in the rape case, 32-year-old Shiv Kumar Yadav, had been jailed for rape in 2011, something that Uber's driver checks missed. However, despite the ban, Uber services operated as normal on Delhi streets on Monday evening, with drivers taking bookings on the company's mobile app.

• HuffPost India Goes Live: The American news and opinion website Huffington Post has launched an India edition through a collaboration with Times Internet (TIL), the digital arm of The Times of India group. The Indian version is the 13th international edition since the launch of the AOL-owned website’s international operations three years ago. “We are happy to be launching the Huffington Post in India at this critical juncture as India is accelerating both because of 4G coming which will come here next year and the government’s commitment for expanding the online roadmap. We are a platform where thousands can participate at any time,” said Arianna Huffington, president and editor-inchief of the eponymous website. The coming together of two media powerhouses will create newer opportunities with a differentiated content offering. “Huffington Post has both the qualities of being disruptive and differentiated while still keeping a level of authority which a lot of online media haven’t necessarily been able to do,” said Satyan Gajwani, CEO, TIL. TIL, a digital product company, reaches over 100 million visitors and over two billion page views every month across various media, including desktops and mobile.

• Walmart Takes Over Carrefour Store in Agra: The lone Carrefour wholesale store in Agra will soon be replaced by a Walmart Best Price outlet. Two people familiar with the development said the US retailer has already taken possession of the property from the landlord and is in the process of opening a wholesale outlet early next year. A Walmart India spokesperson confirmed it is opening a second outlet in Agra but wouldn’t confirm if it will come up in the same property where French retailer Carrefour operated. “We recently received all internal approvals for opening a new store in Agra, our second one in the city. Our team is currently working towards procuring all relevant licences and permits to have it up and running in due course,” the spokesperson said.

• Airport Operators Put SpiceJet on Cash-and-Carry: SpiceJet faced trouble on multiple fronts on Monday with the Directorate General of Civil Aviation (DGCA) issuing another warning, while the airport operators moved to put the carrier on cash-and-carry mode, which means the airline can use the facilities of an airport only upon immediate payment. The DGCA warning came after it discovered that SpiceJet was not following its order barring the airline from booking advance fares beyond a month. “The airline has been asked to immediately limit advance booking to a month or a show cause notice will be issued on Tuesday ,“ said a government official, who did not want to be identified. The DGCA official explained the aviation regulator, can even consider cancelling the licence of the airline for flouting its instructions. The airline's website, as of 8 pm on Monday , said that “bookings open till October 24, 2015“. SpiceJet replied to a query on the notice by saying that they will be discussing the matter with the aviation regulator tomorrow. “We have told the DGCA in our response that we would like to discuss that matter, and plan to do so tomorrow post board meeting,“ said a SpiceJet spokesperson.

• ITC to Invest Rs 1,000 Cr Into Dairy, Juices Biz: ITC Ltd will invest ₹ 1,000 crore for its ambitious foray into dairy and juice businesses which it plans to roll out in the January March quarter, two people aware of the development said. The Kolkata-based cigarette-to FMCG-hospitality conglomerate will make the proposed investment in the short term on manufacturing capacity, marketing, brand building and distribution expenses, two senior industry executives told ET. ITC has already undertaken over ₹ 250-crore investments on these two businesses. Early this year ITC acquired Bengaluru-based B Natural juice brand for about ₹ 5060 crore, which is now being modernised both in terms of formulation and packaging. ITC’s expansion into dairy is done organically and involves setting up processing plants in Munger (Bihar), Punjab, Uttar Pradesh, Maharashtra, Telangana and Andhra Pradesh. Trial production in Munger will start this month, the executives quoted above said. The company wants to have a local production footprint to overcome distribution hassles of dairy products and also to suit the palette of consumers in each region since milk quality differs.

• SAP India Looks to Tap Growing Cloud Business: Software firm SAP India is looking at offerings such as B2B trading portal Ariba, Cloud HR, succession planning tool and social media to offset a slump in sales of on-premise enterprise resource planning services. For SAP, these cloud-based new applications are growing at over 50% yearon-year — a sharp contrast to its breadand-butter ERP business, where sales have slowed to about 10%. The Germany-headquartered software maker now wants to expand into other areas, as not many customers are willing to shell out large sums of money to buy an ERP package. “Most of the relationships till date were ERP centric; now we are moving to the cloud. The cloud is really opening up huge base for us in other verticals and industries and non-SAP customers,“ said Rajamani Srinivasan, head of cloud, SAP India. “Cloud has helped us double the addressable market today and we are far more rele vant to many industries.“ SAP already offers a lighter and low-cost version of its ERP called `SAP Business One' to small and medium companies through both cloud as well as on-premise model. According to Gartner, the public cloud services market in India is expected to grow from ₹ 2,550 crore) in 2013 to $1.3 $423 million (₹ 7,800 crore) in 2017. Gartner billion (.expects India to be the fastest growing market for cloud adoption globally.

• Youth4work Raises Rs 2.8 cr: Delhi-based Youth4work, a startup offering pre-assessed talent-for-hire to companies, has raised $0.5 million (₹ 2.8 crore) in bridge capital from Aurum Equity Partners, Global Asia Partners, and UK based angel investor Dan Sandhu. Founded by Rachit Jain in 2012, Youth4work is a platform where individuals showcase their talent and skills that are finally tested and ranked. These pre-assessed profiles are made available to companies to make suitable hires. “We have 5 lakh users currently and want to reach one million users in the next eight months. We will use funding for marketing, user experience, mobile and the team,” said Jain, CEO and director, Youth4work. The platform also helps companies engage people with specific skill sets for specific activities. “In a short span time of time they have grown to a half a million user base with a tested business model and created a community which today can either become a large youth LinkedIn community or a voca tional play and could go either way. Without any marketing dollars to grow this user base manifold, in a business where cost of customer acquisition is so heavy, is a great achievement,” said Sanjay Bansal, founder, Aurum, on his reasons for investing.

• Now, food comes home on e-commerce wings: Traditional neighbourhood eateries like Veena Stores, Brahmin's Coffee Bar, Kamat, Adigas and the numerous Darshinis that dot Bengaluru have taken baby steps to board India's $6-billion online commerce market. Over the past few months, these eateries have struck tie-ups with a startup to become part of an online marketplace for home deliveries. Consumers can order breakfast, lunch, snacks and dinner. Bengaluru-based Delyver, which recently raised $1.2 million in funding from the family office of big pharma entrepreneur and Strides Arcolab founder Arun Kumar, is an internet startup connecting local brands with neighborhood residents. Delyver promises home deliveries that carry a Rs 30 service fee within an hour. It serves 21 neighbourhoods in the city.

• PepsiCo CEO says Cola has lost its 'cool factor': PepsiCo CEO Indra Nooyi conceded Monday that cola has lost some of its "cool factor." Speaking at Beverage Digest's "Future Smarts" conference in New York City, Nooyi said that craft soda, like PepsiCo's own Caleb's Kola, may be the key to restoring some of cola's allure. "I think there is actually a huge potential for craft," Nooyi said. PepsiCo launched Caleb's Kola earlier this year. Nooyi said it has a distinctive taste that is "catching on," but she didn't disclose any early sales figures. PepsiCo, like other major soda companies, is suffering from an industry-wide decline in soft drink sales as consumer demand grows for healthier beverages with less sugar and artificial ingredients. "Health and wellness was fashionable to talk about three to five years ago and today has become very mainstream," Nooyi said. Consumers' idea of "health and wellness" over that time period has also evolved from a focus on diet drinks and foods to natural ingredients and exercise, she said.

• SpiceJet cancels over 1,800 flights in domestic sector: Cash-strapped SpiceJet Ltd. has cancelled over 1,800 flights across the country for the current month, in signs of mounting troubles for the budget airline. The air carrier, which is part of Kalanithi Maran-led Sun Group, has cancelled a total of 1,861 flights, a few to Kathmandu in Nepal and all others connecting domestic cities, till 31 December, SpiceJet said in an update on its website. These included 81 flights scheduled for Monday itself. The large-scale flight cancellations came at a time when the aviation regulator Directorate General of Civil Aviation (DGCA) was considering issuing a show-cause notice to the airline for defying its directives regarding advance bookings. DGCA has asked the airline to stop taking bookings by Tuesday of more than one month in advance. Besides, Airports Authority of India (AAI) is said to be considering putting SpiceJet on cash-and-carry mode soon if it does not furnish a bank guarantee against its dues to the airport operator, which stand at around Rs 200 crore.

International:

• Singapore Air to Honour Underpriced Airfares: Singapore Airlines (SIA) said it will honour all bookings that customers made on business class tickets, which the carrier wrongly sold at economy fares, to ensure their travel plans aren't disrupted. The airline is continuing to investigate what caused the sale at a cheaper price, Singapore Air said in an e-mailed statement on Monday. The carrier was alerted on November 29 on the sale of premium tickets at an “outdated“ economy fare level, it said. Singapore Air said last week it was working with travel agents in Australia to recover the difference in fares. The tickets sold involved 900 segments, or journeys between two cities.

• McDonald's global sales continue to decline: Sales at McDonald's outlets in the United States fell 4.6% in November - more than double the expected decline. Global sales for the fast-food chain dropped 2.2%, in their sixth consecutive monthly fall. Like-for-like sales at McDonald's have not increased since October 2013, as smaller rivals eroded its market share. Consumers have been opting for healthier and more varied offerings at outlets such as Chipotle, which allows diners to customise their dishes. The Mexican food chain reported a 20% rise in like-for-like sales for the three months to September 30 - the third quarter of double-digit increases. Sales for McDonald's in the Asia/Pacific, Middle East and Africa markets were down 4%, hit by a China meat supplier scandal that scared off customers and forced the company to find new sources for its chicken and beef. In Europe, sales dropped 2% in November, as a strong UK performance was dragged down by a "very weak" Russian market and negative results in both France and Germany.

• E-Commerce Growing in China's Rural Areas: E-commerce in China's less-developed rural regions is gaining momentum as consumers there increasingly use mobile phones to make purchases online, according to a report released Monday from Alipay, an online payment service provider owned by Chinese e-commerce giant Alibaba Group. From 2012 to 2014, mobile payments as a portion of total payments made via Alipay more than doubled in rural regions, indicating shoppers "in rural areas and smaller cities are quickly adopting mobile devices as their primary tool for online shopping," the 2014 Alipay spending report said, noting that this year in Tibet more than 62 percent of Alipay payments were made via mobile devices.

• German Union Launches New Strike at Amazon Warehouse: Workers at a German warehouse of Amazon.com went on strike on Monday as labour union Verdi sought to squeeze the online retailer in the busy pre-Christmas period in a long-running dispute over pay and conditions. Verdi said in a statement it had called out workers to strike at a distribution centre in Bad Hersfeld, saying Amazon was increasing order volume and pressure on workers with special offers ahead of Christmas. Verdi expects up to 450 workers to join the strike on Monday, a spokeswoman said. The union said it would keep up the pressure as long as Amazon did not meet its demands. Amazon said the vast majority of workers had not walked off the job and were working hard to meet customer expectations. It said its deliveries should not be disrupted as it can draw on a European network of 28 warehouses in seven countries. The U.S. company employs almost 10,000 warehouse staff at nine distribution centres in Germany, its second-biggest market behind the United States, plus more than 10,000 seasonal workers.

• Patricia Lopez Makes Move From Avon to Estée Lauder: The Estée Lauder Cos. Inc. has named Patricia Lopez senior vice president and general manager for the Estée Lauder and Aerin Beauty brands in North America. Lopez succeeds Nancy McKay, a 28-year veteran of the company who left Lauder in mid-November to join Nest Fragrances as chief executive officer. Lopez was most recently Avon’s chief marketing officer and global brand and category president, as Patricia Perez-Ayala. In that role, she drove Avon’s strategic direction and managed the company’s $10 billion global marketing and research and development business. Avon eliminated the chief marketing officer role in November, assigning the position’s duties to Fernando Acosta, senior vice president and president of Latin America for Avon. Lopez spent 25 years at Procter & Gamble before moving to Avon in December 2012. Her last position at P&G was as vice president and general manager for Eastern Europe, among P&G’s top five largest markets.

Tech:

• BlackBerry Launches First Healthcare App for Doctors: BlackBerry’s investment in healthcare technology has produced its first application targeted at doctors and nurses who use its smartphones. The Canadian phone maker’s networks and devices will run apps developed by Los Angeles-based NantHealth, a healthcare company run by billionaire Patrick SoonShiong. BlackBerry invested in NantHealth last April. Health care is a key target for BlackBerry, said chief executive officer John Chen. The first part of the deal will connect physicians’ BlackBerrys with a NantHealth system that analyses tumours and recommends treatment options. It will be available early next year, the companies said. More applications are planned, Chen and Soon-Shiong said in a joint phone interview.

• Facebook, Twitter Current Status: Hirers are Watching You Closely: Sachin Keshav's (name changed) rile about a past employer on his Facebook page might have earned him many likes and forwards, but it has spoilt his chances of landing a better job next time. Keshav, a mid-level employee of an information technology firm, is among scores of prospective employees whose Facebook and Twitter accounts are under close employer scrutiny. Candidates who post radical views on various subjects apart from negative comments about previous employers face the risk of never being called for an interview or receiving job offers. Having a clean image on social media is equally important, according to executive search industry experts. “A profile on a social medium like Facebook is normally woven in with traditional recruiting programmes. This helps HR personnel to do background checks and screen profiles of potential recruits,“ says Manoj Biswas, managing director, HR for Accenture in India. Though Facebook is meant to be a leisure activity, it is important to keep a professional profile while looking out for a job. “Employers, to a great extent, have second thoughts on an individual who appears to be insensitive and tactless on such an open forum,“ says Biswas. While more than 90% of hiring managers use professional networking site LinkedIn as a tool to source candidates, in certain industry sectors, such as IT, more than 50% of hiring managers scan candidates' profiles on Facebook and Twitter before shortlisting them.

• Centre to Urge States to Help Fast Track National Broadband Project: The Narendra Modi-led government will soon urge all state governments to help fasttrack the national broadband project and suggest business models for delivering citizen-centric e-services under the Digital India initiative in their respective regions. “The immediate mission is making all state governments active partners in speeding up the national broadband venture and exploring ways to leverage the highspeed internet network to deliver government e-services to the common man,” a top telecom department official told ET. Accordingly, all states will be urged to assign responsibilities to senior bureaucrats to oversee the broadband rollouts in their regions, remove bottlenecks and come up with workable network utilisation models for delivering eservices in areas such as health, education and banking. Telecom minister Ravi Shankar Prasad is tipped to chair a meeting this week with senior DoT officials to thrash out a strategy to make state governments “direct stakeholders” in the national broad band project. The new stirrings at DoT come at a stage when it is keen to involve private firms -infrastructure providers, telcos and content developers -to hasten the national broadband network rollout, which is already three years behind schedule. More so, as it is keen to lev erage the renewed interest in India's technology space among top foreign investors, especially in the US and Japan, after a debili tating image crisis, post the Vodafone retrospective tax case and the 2G telecom scam. The national broadband net the backbone of the bitious ₹ 1.13 lakh work will be the backbone of the Centre's ambitious ₹ 1.13 lakhcrore Digital India programme, through which it aims to deliver eservices to rural end-consumers, which could be homes, schools, hospitals, banks or other institutions.

• Amazon tells US it may move delivery-drone testing overseas: Amazon.com Inc. told US regulators that it has begun testing deliveries by unmanned aircraft, or drones, in other countries and will divert more research abroad if the government doesn’t let it conduct such tests locally. In a 7 December letter to the federal aviation administration (FAA), Amazon, the largest Internet retailer, urged the agency to quickly grant the Seattle-based company permission to test drones outside of laboratories in Washington state. The company proposes to fly the drones on private property in a rural area, supervised by trained pilots, according to the letter, which was a response to questions from the FAA. Amazon, which unveiled plans to use drones last year, said it wants them to deliver light packages to customers in 30 minutes or less. In July, Amazon sought permission to test the drones outdoors, based on an FAA request for comments on possible exemptions to its ban on commercial drone operations. Today’s letter expressed concern that the FAA may be impeding technology innovation in the US.

• Smartphones the Future, but Tablets Drive Sales: A divide has opened up in the fast-growing world of mobile commerce, leaving retailers to wonder whether they should focus on smartphones that get the traffic or tablets that get the sales. There are many more smartphones than tablets, but shoppers who use tablets convert to buyers at a greater rate. Data from IBM Digital Analytics Benchmark showed that mobile sales were up 27.2 percent for the five days from Thanksgiving to Cyber Monday and that mobile made up more than 50 percent of total online traffic. This is the first time mobile outpaced desktop traffic on a Cyber Monday. But conversion still lags. Smartphones yielded just 9.1 percent of online sales, even though they comprised about 29 percent of online traffic. The dynamic was different for tablets, which made up 12.9 percent of sales on 12.5 percent of traffic.