Daily News Digest- 12th Dec'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Karnataka, AP Latest to Ban Uber; Maha Does a U-turn: Karnataka, the state where Uber started its Indian operations, and Andhra Pradesh, became the latest states to join a juggernaut of bans on the Internet-based taxi aggregator, even as the San Francisco-based company issued a contrite statement pledging improvement in its driver verification process. Transport authorities in Maharashtra, however, appeared to backtrack on a `ban' which was announced on Wednesday with the state's Transport Secretary SK Sharma saying the state was collecting information on web-based aggregators such as Uber and Ola, adding they were not banned. He, however, pointed out that the firms had started services without permission. Karnataka Transport Commissioner Rame Gowda spoke in a similar vein, saying eight taxi operators, including Ola, were authorised to operate in Bengaluru.Uber was not among them. Gowda said any taxi operator or aggregator would have to register with transport authorities if it wished to continue offering services. It has also emerged that the country's highest political authorities are engaged with the problems besetting web-based taxi services. At a meeting on Tuesday evening, Prime Minister Narendra Modi sought information on how the decision to ban Uber came to be taken, a senior official privy to the discussions told ET.

• Snapdeal buys gift e-tailer Wishpicker: In its first acquisition after $627-million Softbank fund infusion, e-commerce major Snapdeal has bought Wishpicker, an online gift retailer founded by IIT-Delhi graduates. The acquisition amount for Wishpicker, which was founded last year itself by IITians Apurv Bansal and Prateek Rathore, was not disclosed. “We are investing in strengthening our technology platform and Wishpicker.com is an excellent platform with top-tier entrepreneurial, engineering talent and fits in perfectly with our vision,“ Snapdeal cofounder Rohit Bansal said on Thursday . Wishpicker claims to provide “gift ideas from across the internet“ through an intelligent gift recommendation engine. It uses parameters like relationship with the recipient, age and personality for suggesting gifts. Bansal said as consumer buying trends are evolving, intelligent recommendations will be one of the key drivers for business volume for sellers. This is the company's first acquisition after Japanese telecom and internet giant SoftBank invested $627 million in the homegrown online marketplace in October.

• Will 2015 be Happy New Flying Year? Probably: Happy New Flying Year? More so for the corporate frequent flyer? Quite possibly . 2015 may see lower domestic fares and more metro-to-metro flights than this year. And no-frills flying, the clear winner in 2014, may yet again see some serious competition from business classplus-free meals flying options. Three New Year developments are likely to put downward pressure on air fares. First, the Tata-Singapore Airlines-run full service carrier Vistara (fleet size 5, by March) will start operations early next year and its promised highquality full service will be in direct competition with Jet Airways (fleet size 101), which has discontinued its low-cost operations and is girding up to improve its full-service offering. Second, low-cost carrier Air Asia (fleet size 3, expected to go up to 5 or 7 in 2015) will significantly increase its metro operations and will be taking an aim at nofrills biggie IndiGo (fleet size 85). And IndiGo itself is adding one aircraft a month to its fleet and will ramp up more once the 180 aircraft it ordered in 2011 start arriving in the last quarter of 2015. Third, the SpiceJet (fleet size 39) story may not be over. The airline may survive and may recover at least partly from its current ignominy of having had to surrender 186 flying slots to the aviation regulator.

• Global Brands Change Partners for More Zing: Brioni, a luxury menswear brand from Italy, is currently looking for the “perfect” location in a south Delhi upscale mall to open a store, almost after a year it shut down its earlier store located inside a five-star hotel. Store location is not the only change that Brioni has initiated in the country. It has found a new partner to sell its jackets, ties and shirts in India. Another luxury brand, Etro, is holding talks with a number of retailers in India to make a comeback, after it split ways with Genesis Luxury and all the India stores were shut last year. A host of popular brands, including Ferrari, Bang & Olufsen, Montblanc, Etro, Brioni and Bulgari are revisiting their India business plans by tweaking one of the most important factors – the local partner. Reasons differ. It could either be inefficiency of the existing partner to infuse new energy and money in the business, or the desire to take control of the operations by choosing someone docile. Iconic jewellery brand Bulgari has formed a joint venture with a new “silent partner” with an aim to have better control over its operations in this market.

• Now, Safal Wants a Bite of Frozen Snacks Market: Safal, the organised retail chain of Mother Dairy, is venturing into the frozen snacks market with aloo tikki, a segment dominated by McCain so far. Safal’s aloo tikki will be available across the country in modern and traditional retail formats by the end of this month. Interestingly, Safal has timed its entry into the segment when prices of potato have crashed by more than half in the past one month. The frozen vegetable snacks market in India is currently pegged at ₹ 1,200 crore and it has the potential to grow manifold. Since we are already into frozen fruits and vegetables category, we thought that making a foray into the frozen snacks category will help us leverage this growth. We will offer frozen snacks with ethnic Indian taste like aloo methi,” Pradipta Sahoo, business head (horticulture), Mother Dairy Fruit & Vegetables, told ET.

• 10 New Models to Help Audi Maintain Top Spot in India: German auto maker Audi AG plans to intensify efforts to maintain its leadership position in the Indian luxury-car market by introducing 10 new models in 2015, even as rivals try to displace the company from the slot in this fiercely competitive segment. Its fully-owned unit, Audi India, is sure of posting another year of double-digit growth in 2014, as it has sold more than 10,000 cars by the end of November -sales in the whole of 2013 were 10,003 units. “We have had the best year in terms of sales in 2014 as we have already surpassed last year's total volumes,“ Audi India head Joe King told ET on the sidelines of an event where it launched the new cabriolet version of the A3 compact sedan. “Now we are repeating last year's feat of double-digit growth this year too even in a flat market, and would further enhance the market share in the luxury segment.“ He said the company's “special emphasis“ is on the compact luxury segment, which is the fastest growing in the luxury-car space. The A3 Cabriolet is priced at ₹ 44.75 lakh before insurance and local levies in Delhi. The four seater has a retractable soft top, 1.8-litre petrol engine and can attain a top speed of 242 km per hour.

• Heavy Online Discounting Hurts Franchisees' Expansion Plans: The battle between e-commerce and brick-and-mortar retail, having exacted on a toll on stores selling electronics brands, is now leading to casualties in other segments. Franchisees of Benetton, Tommy Hilfiger, US Polo, Puma, Lee, Wrangler and Calvin Klein say they are being forced to freeze expansion of stores because of the heavy discounting onslaught by ecommerce companies. “We are holding expansion plans until the next season,“ said Keshav Tiwari, retail head for Samarth Lifestyle that operates more than 100 outlets of Puma, US Polo, Nautica, Tommy Hilfiger and several other labels. Mohalibased Kapsons, which runs about 200 franchisee stores of various Indian and global brands, is only opening a few stores catering to children. It's putting on hold a plan for five department stores of 30,000-40,000 sq ft each. Another Delhi-based franchisee of Benetton and Adidas said his company has completely frozen store opening plans for 2015 primarily because of the impact of e-commerce and also because of rising rentals. “It is confirmed that most expansions are on hold. Even companies have put their own stores on hold,“ said the head of one of the country's largest franchisee groups. “They are also suffering and they themselves are not expanding.“ Such a freeze could also have an impact on mall rentals as demand for space declines, unless the moves by brands to ease the situation take effect. This involves having separate product lines for online and offline.

• Online real estate portals get a new look: Online real estate portals are attracting equity investors and venture capitalists. For instance, according to mergers and acquisitions tracking website, Dealcurry.com, Housing.com sold 30% stake for $70 million, IndiaHomes.com raised $50 million (Rs.310 crore) from its existing investors, Commonfloor.com secured $7.5 million from existing investors, and Grabhouse.com raised $2 million. Among the real estate portals in India, a few are established, such as 99acres.com, magicbricks.com, Indiaproperty.com and Makaan.com. However, it’s the new entrants that have brought in new technology and trends in the segment, thanks to which, now all websites are trying to offer new services to customers, from property location to even help with documents.

• Rising smartphone sales boost m-commerce: Rajashree Desai, a 20 year-old college student in Aurangabad, shops anytime, anywhere, and with her fingers. “I could be in a coffee shop or even a movie theatre, and I could still be on my mobile phone browsing and shopping,” says Desai. People like Desai are increasingly becoming the norm in e-commerce. E-commerce sites Flipkart, Myntra and Jabong now get 50% of their revenues from consumers shopping on their mobile phones, according to company officials. A year ago, such transactions, labelled m-commerce (the m is for mobile) accounted just for one-tenth of the overall revenue for Flipkart and just 8% of Myntra’s revenue, say officials. At another e-commerce site, Jabong, they accounted for 5-8% of revenue 18 months ago, said founder and managing director Praveen Sinha.

• SAIF Partners bets $1 mn on Zoomo Creators: YoungMonk Technologies, a Bengaluru-based startup that is building Zoomo, a mobile peer-to-peer marketplace for used cars, has raised $1 million in a seed round of funding from SAIF Partners.The deal takes early-to-growth stage investor SAIF's tally of seed deals, or investments in pre-revenue startups, to 10 in just 12 months. Zoomo was founded this July by IIT alumni Arnav Kumar, Himangshu Hazarika and Aniket Behera. The three earlier worked at companies such as Bankbazaar, Deutsche Bank and UrbanTouch (acquired by Fashionandyou). The platform currently sports 1,200 listings, all from Bangalore, and claims to have already facilitated the sale of 100 cars. “We are currently seeing 150odd incoming listing requests per day . Last month, we did a GMV (gross merchandize value of $500,000 (under 3 crore),“ said Kumar, who is the startup's CEO. The company will raise the funds raised to increase its presence in Bengaluru and expand to Mumbai and elsewhere in the next six months.The company is also in talks with potential investors for its next funding round. “We now have a runway for six months, but will raise a larger round soon,“ said Kumar.

International:

• McDonald's to Pare US Menus for Speed: McDonald's said on Wednesday it plans to cut the number of items on its US menus and use fewer ingredients in food as it moves to speed up service, bolster sales and offer consumers personalised options to compete better with Subway and Chipotle Mexican Grill. Mike Andres, the company's US president, said starting in January menus will have eight fewer food items and five fewer Extra Value Meals. The world's biggest fast-food chain, which has not had a monthly gain in sales at established US restaurants since October 2013, is also making the changes to reach out to consumers who are demanding simpler, more natural food choices. The company is testing its slimmed-down menus in six markets, including Bakersfield, California, and Knoxville, Tennessee, a spokeswoman said. The simplified menu boards will offer one Quarter Pounder with Cheese hamburger as compared with four on the regular menu, one Premium Chicken sandwich versus three, and one Snack Wrap versus three. Andres said McDonald's is not finished tweaking menus.“There's more to come,“ Andres said on a conference call with investors. “We don't need to have a big menu board to offer variety .“

• Wal-Mart report found inflated profit, unapproved sales in China: After years of heralding China as one of its best markets, Wal-Mart Stores Inc. in August said its performance there was among the worst in its major countries. A management shake-up and job cuts have followed. Although the reversals seem abrupt, cracks in the foundation of Wal-Mart’s retail business in China have been developing for years, hidden by questionable accounting and unauthorized sales practices, according to employees and internal documents reviewed by Bloomberg. The practices—including bulk sales to other retailers and some sales allegedly booked when no merchandise left the shelves—made business appear strong even as retail transactions slowed and unsold inventory piled up, these people and documents say. Wal-Mart said in August that it was unhappy with inventory growth internationally. Stores in China continue to make bulk sales, sometimes unprofitably and without required management authorizations, according to employees who’ve left the company this past month. Concerns about bulk sales, raised as far back as 2011 in an internal report, have been the subject of inquiries in China by Wal-Mart’s legal team as recently as May, according to an internal company e-mail and an employee interviewed by lawyers.

• Amazon job posts hint at global ambitions for same-day delivery: Amazon.com Inc. is considering expanding its same-day delivery programme globally, recent job listings show, underlining the importance of fast shipping to its ability to compete with the instant gratification offered by brick-and-mortar stores. Amazon is also looking to add a same-day delivery option on all items sold by third-party merchants on its site, a move that some logistics experts said may help offset the high costs of speedy, last-mile delivery. The company’s global ambitions for same-day delivery were echoed in at least seven listings for senior product and marketing jobs based at the company’s headquarters in Seattle, including three posted online this week. “Our long-term vision is that customers can order and receive a sellers’ product the same day anywhere in the world,” according to one job listing posted in late October.

• H&M Opens Piazza del Duomo Flagship: Eleven years after the first Italian H&M store opened in Piazza San Babila here, the Swedish retailer has unveiled a new, four-story flagship overlooking the city’s gothic Duomo cathedral. The 25,670-square foot store, H&M’s 125th in Italy, carries a full range of men’s, women’s, teen and children’s wear. Bright and spacious, with marble floors and touches of greenery, the new Milanese flagship is the city’s sixth H&M store, and it has a staff of 200. In spite of Italy’s prolonged economic malaise, H&M Italia country manager Dan Nordstrom expressed confidence in the potential for greater expansion across the peninsula, noting that, this year, H&M turnover in Italy rose 27 percent in the nine months ending Aug. 31, compared with the 15 percent increase the group saw overall. Over a thousand of H&M’s 3,900 employees in Italy joined the company in 2014, and the firm opened 11 new Italian stores, in cities such as Modena, Treviso and Reggio Emilia, in the year.

• Frank & Oak Opens Canadian Flagship: Little more than two years after launching the online men’s wear company Frank & Oak, cofounders Ethan Song and Hicham Ratnani have moved off-line in strategic fashion to simplify shopping for Millennial men. Thanks to a recent infusion of $15 million led by Silicon Valley’s Goodwater Capital, the Montreal-based e-tailer, known for its slick magazine format, monthly, in-house designed collections and e-commerce interface with 1.5 million active users, opened its Canadian flagship in November in Toronto’s Queen Street West district. The move, according to chief executive officer Song, 30, wasn’t an either-or proposition. “Having these multiple channels is good for business. That’s the bottom line,” he said.

• Chanel Unveils Enlarged Houston Store: Chanel’s Texas imprint is even larger with the opening of its newly renovated and expanded boutique here. The store draws design cues from Coco Chanel’s Paris apartment on Rue Cambon while providing ample space to accommodate shoppers. Chanel first opened its doors in Houston in 1998, and after 16 years the store was due for a look and feel that not only represented the brand, but the aesthetic of Chanel boutiques elsewhere in the U.S. “We wanted to raise the level of shopping experience,” said Barbara Cirkva, Chanel Inc. division president of fashion, watches and fine jewelry. “It has a very residential feel with beautiful carpets and décor, but the same luxurious experience. Time really is one the biggest luxuries.”

• Marc Bolland Joins Coca-Cola Board of Directors: Marc Bolland, the chief executive of Marks & Spencer Group will join the board of The Coca-Cola Company as a non-executive director on Feb. 18, according to a statement from M&S. The statement added that Bolland has resigned from the ManpowerGroup, Inc. board of directors, having served on the board since July 2004. He will step down in February.

Tech:

• You Can Now Watch YouTube Videos Offline: YouTube on Thursday said it was giving Indian users the option to watch videos even when they are offline through its mobile application, as the video service owned by Google looks to boost its usage in the country. The new offline feature for the You Tube app lets people take videos of fline, using WiFi or their data plans. Once taken offline, the videos can be viewed without an Internet connec tion for up to 48 hours. “Already, we're seeing over 40% of our traffic in India come from mobile devices. By launching this offline ex perience on YouTube in India today, we hope to help people move past the challenges of data connection, speed and cost to enjoy a smooth, buffer-free version of YouTube,“ John Harding, vice-president of engineering at You Tube, said at the press event organised to announce the offline service.The service was also launched in Indonesia and the Philippines. YouTube has other plans to improve viewer experience in emerging countries like India where data plans are expensive and mobile data networks are poor. “We are bringing in adaptive bitrate streaming to the mobile where we can change the quality of the file depending on the speed of the network. When we first used it on the desktop, we found it could cut buffering time in half,“ Harding told ET.

• Foxconn to Shut Chennai Unit in Dec: Electronics component manufacturer Foxconn said it will suspend operations at its eight-year-old facility in Chennai as its only customer, the now mothballed plant of Nokia, stopped production in October. The shutdown of FIH India Pvt Ltd will be effective December 24, the company said in a news release. Management representatives of the plant and union members are set to work on the final settlement formalities at a local labour office on Friday. Foxconn India's only client was the Finnish phone-maker Nokia, to which it has been supplying panels. “The winding down of Foxconn could just have not been prevented,“ a management member told ET. Nokia's Chennai factory had been seized by tax authorities, accusing the company of evading tax, a charge it denies. Because of the tax dispute, the facility wasn't part of Nokia's now-completed deal to sell its telecom handset business to Microsoft.

• TCL Aims to Sell 4 m Alcatel One Touch Phones in India: Chinese handset manufacturer TCL Communication Technology Holdings aims to sell 4 million Alcatel One Touch smartphones in India next year, a top company executive told ET.Michael Chen, senior director of product & marketing of APAC at Alcatel One Touch, said the company expects majority of sales in India from 4G telecom service providers and e-commerce channels. It is already in talks with 4G operators in the country , he said. “We have been present through a number of telcos in the country . With 4G, we will enhance our overall market and relationship with Indian telcos,“ Chen added. He, however, refused to name any 4G LTE telecom company with whom Alcatel One Touch is working. Earlier, Praveen Valecha, regional director, APAC at Alcatel One Touch, had told ET that the company was in talks with Reliance Jio Infocomm for 4G devices.

• Microsoft sold 1.2 million Xbox One consoles in November: Black Friday is big, but just how big? Enough to push 1.2 million of Microsoft’s Xbox One consoles through shop doors, apparently. Geekwire is reporting that Microsoft is touting the number from a report by NPD market research that looks at the holiday period. Mike Nichols, Corporate Vice President for Xbox marketing, said “Response to the holiday lineup of games on Xbox One was incredible, with Xbox One fans buying more games in November in the U.S. than any other gen eight platform and enjoying over 357 million hours of gameplay globally.” 

• Amazon Removed its Secret Android App Store: Remember how Amazon had sneakily implemented its entire app catalog into its primary Android App and it seemed no one noticed? Yeah, well, Google found out. If you try to look for Amazon’s app on the Play Store now, you won’t find it. There was a replacement app called Amazon Shopping – essentially the same software but without the app store – but at the time of writing of this article that app also does not no longer appear in the Play Store. According to Android Police, the removal is due to a small change in wording in Google’s Developer Distribution Agreement on September 25. Whereas before the document would not allow apps whose “primary purpose” was to distribute apps outside of the Google Play store, the document now reads that it doesn’t allow any apps which “have a purpose” of selling outside apps.

• Zuckerberg Hosts Second Facebook Q&A: During Facebook’s second live Q&A session today, Mark Zuckerberg answered questions from the crowd around the company and its plans. The first question was a good one: is Facebook thinking about adding a dislike button? Zuckerberg said that it’s something that gets discussed a lot at the company. He doesn’t think there needs to be a voting mechanism or even a specific dislike button, but instead more sentiments for situations where you might not want to “like” something. He gave the example of when something sad happens, you might not want to like the status. The company is thinking about “other sentiments” and how it could use these with a single button or easy process similar to the way you “like”, but it’s something that won’t be coming in the near term.

• Facebook Adds Call To Action Buttons for Pages: Following a slew of new tools for publishers yesterday, Facebook has announced seven “call to action” buttons for Pages. Page admins can now select one of seven buttons, which use verbs to attempt to get user conversion and appear on top of the cover photo. Dollar Shave Club, which has been trialing the buttons says that adding a “Sign Up” button converted 2.5x more users than previously. Call to action is rolling out over the next few weeks in the US and worldwide in 2015.

• Microsoft sends out invites for Windows 10 event: After showing off Windows 10 at an event in San Francisco and then offering a downloadable preview, Microsoft is ready to unveil a bit more about the next iteration of its operating system. Today, the company sent out invitations to the media titled “Join us to hear about the next chapter of Windows 10.” The event will take place at Microsoft’s headquarters in Redmond, Washington on January 21 and it looks to be a deep dive into Windows 10. The event will start at 9:00am PT. The presentation portion of the event will be livestreamed.