Daily News Digest- 18th Dec'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Gaurav Mahajan to join Raymond as President – Group Apparel: The recent resurgence of the 90-year old Raymond group has gained further momentum with another high profile addition to its ranks. Gaurav Mahajan, currently Chief Operating Officer at Trent Ltd., will be joining Raymond as President - Group Apparel. Raymond's apparel portfolio comprises of Park Avenue, Colour Plus, Parx and the recently launched, Raymond ready-to-wear. The Gautam Singhania led group is looking to aggressively scale its existing brands and also venture into newer categories with the view to establishing itself as the leading house of lifestyle brands in the country. Sanjay Behl, CEO Lifestyle Business said “We have set an ambitious vision for our Lifestyle business and our apparel portfolio will be the forerunner in the achievement of this vision. Our leadership philosophy is driven by a judicious blend of nurturing Raymond talent towards senior leadership roles and infusion of best-in-class external talent. We are therefore delighted to have Gaurav join the Raymond leadership team. He brings 20 years of intimate experience in lifestyle retailing with strong business acumen and a deep understanding of the consumer psyche.” Mahajan has been with Trent since its inception, being one of the first members to join Noel Tata’s team, and has been a key player in shaping it over the years into the largest and most profitable private label retailer in the country. He was instrumental in setting up and expanding Westside, taking it to a national spread of over 80 stores across 45 cities and product portfolio spanning Mens, Ladies, Kids, Ethnic, Innerwear, Home, Beauty and Food. He launched a successful visual revamp at Westside a few years ago bringing in the internationally acclaimed design company Fitch and was the first in the Indian industry to champion retailer-designer collaborations through the Lakme Fashion Week and the Vogue Fashion Fund. Another highlight was the extension of the Westside portfolio beyond clothing into food with Gourmet West – a first of its kind gourmet food section inside an apparel department store. Gourmet West runs very successfully in 5 Westside locations and is now expanding further. He was recently involved in scripting an exciting revamp strategy for Landmark, Trent's entertainment retail chain and charting the international expansion plans for Westside. Mahajan is a key industry voice and actively participates in industry forums such as CII, Lakme Fashion Week Advisory Board and CMAI. He is an alumnus of NIFT Delhi and GMP, Harvard Business School.

• Starved of Fuel, SpiceJet Planes Stay Grounded: SpiceJet's planes were grounded on Wednesday morning, stranding passengers across the country and leading to long queues and angry exchanges at airports as travellers tried to switch carriers at the last minute. The development, which stemmed from the carrier's inability to get aviation fuel on credit, underscored the tenuous nature of SpiceJet's future despite having got what seemed like a bailout proposal from the civil aviation ministry on Tuesday night. Flights eventually resumed at 4 pm after the airline paid about ₹ 3 crore to refuel its planes. But ` the breather could again be temporary -the fuel companies had threatened to cut off supplies again by evening, a ministry official said. SpiceJet's plan was to operate 75 flights on Wednesday, according to a company statement. That's a just fifth of its daily flights in July. Under the ministry's plan, which also called on banks to give the company ₹ 600 crore in working capital loans, the ministry had sought a respite on fuel supplies, seeking credit of up to 15 days. The airline calculated this as amounting to ₹ 75 crore based on a daily fuel bill of ₹ 5 crore. Pending dues were put at ₹ 14 crore until December 15. Junior aviation minister Mahesh Sharma, however, offered clarifications on Wednesday to this plan, saying companies cannot be helped on individual basis. “The ministry has not given any assurance to SpiceJet in terms of financial help,“ he told reporters.“The ₹ 600 crore is subject to a concrete financial revival plan that SpiceJet has to submit within 10 days. Oil companies will have their own discretion. If SpiceJet offers some token amount then maybe oil companies can give them fuel for two more weeks.“ State oil marketing companies said they haven't stopped supplying fuel to SpiceJet on a “cash and carry“ basis in the past six months. “It is SpiceJet which did not come to purchase fuel (on Wednesday),“ one executive said, requesting anonymity.

• Big Get Bigger, but Small E-tailers Fail to Click: Despite an online shopping frenzy in the country and large investors stepping in to fund several online retailers, most e-commerce players are yet to turn their click-and-buy model into big businesses as the big ones steal the show. While nearly half a dozen shopping portals such as Zovi, FashionandYou, Yepme and Shopclues have doubled their sales since the last two years, they are yet to reach the ₹ 100 crore sales mark, and pale against the likes of Flipkart, Snapdeal and Jabong that clocked anywhere between ₹ 500 crore - ₹ 2,800 crore in sales for 2013-14, according to filings with the Registrar of Companies. India, one of the fastest-growing ecommerce markets, is expected to have 100 million online shoppers by 2016 when the industry will grow to $15 billion, or about ₹ 93,000 crore, up from 35 million consumers and $3-billion valuation this year, according to a recent Google report. Yet, in a highly competitive marketplace, where big discounts are the primary sales drivers for online retailers, many small players are struggling to gain ground. “For every successful online retailer, there are at least 10 others which have either shut shop or got acquired,” said Devangshu Dutta, chief executive at retail consultancy Third Eyesight.

• Mahindra Partners in Talks to Buy Online Portal Babyoye: In a deal that could mark a first for an Indian conglomerate, Mahindra Partners, the emerging business arm of the diversified conglomerate Mahindra Group, is in talks to acquire online portal BabyOye, according to multiple sources privy to the negotiations. “Due diligence is on. Mahindra Partners is looking to buy Babyoye through its retail business Mahindra Retail,” said one person directly involved in the deal. “There are significant synergies between Mom & Me and Babyoye. It will prove to be the online platform that Mom & Me has been looking for to expand its sales.” A second source said the Mahindra Group is in the final phase of due diligence. ET could not ascertain the value of the proposed deal. The Mahindra Group, a $17 billion conglomerate that is present in sectors ranging from automobiles to IT services, already owns a chain of baby-care stores and industry sources say it could view the acquisition of an online portal as a complement to its existing network.

• Hero MotoCorp Sells 700 Bikes Online: Hero MotoCorp, the world's largest two-wheeler maker by volume, is testing the waters for selling its products online. As many as 700 Hero MotoCorp bikes were sold in 72 hours through online marketplace Snapdeal during the recentlyconcluded Great Online Shopping Festival, organised by Google. The demand ­ it peaked on the last day of the sales with it selling 500 bikes in eight hours on December 12 ­ underlines the potential of the online market in India to sell products such as automobiles that hitherto were considered as an exclusive domain of traditional channels. Snapdeal, the only ecommerce portal that sells automobiles in India, also offers Mahindra & Mahindra's Scor pio SUV and two-wheelers. Launched online on December 10, the first day of the sales festival, Hero MotoCorp's Splendor, Passion, Glamour, Ignitor, Hunk and Xtreme motorcycles and Pleasure scooter were available at the same price as at off-line dealerships.

• New Road Safety Law to Cover Taxi Aggregators: The government has inserted online taxi aggregators into a proposed new road safety law it plans to bring in Parliament, potentially ending the regulatory ambiguity surrounding firms such as Uber, Olacabs and TaxiForSure whose operations have come under sharp focus following the rape incident in Delhi earlier this month. The ministry for road transport and highways has amended the draft of its proposed Road Safety and Transport Bill to include aggregators, a move that will finally acknowledge the existence of these firms while also empowering authorities to act against any wrongdoing or lapses by them.

• GreenDust Launches E-auction Platform: Refurbished goods retailer Reverse Logistics Company, which owns and operates the portal GreenDust.com, has launched a business-to-business e-auction platform as it looks to broaden its suite of offerings. The move could put it on a collision course with the likes of Alibaba and Amazon. The GreenDust auction platform, which was launched last week, comes at a time when Jeff Bezosled Amazon has signalled its intention of launching a portal for wholesale merchants in India, the first country outside the US where such an initiative is being planned by the company. “We have created an auction platform, where merchants looking to sell in bulk can connect with buyers looking to buy in bulk, and we offer a number of value-added services,“ said Hitendra Chatur vedi, founder and CEO of GreenDust. The move also comes at a time when the country's wholesale market is expected to grow to $700 billion by 2020 from the current $300 billion, according to Wal-Mart. “This is the second phase or the evolution of e-commerce. There is definitely an opportunity for GreenDust here, as an increasing number of businesses look to sell their excess inventory online,“ said Nitin Agarwal, director at investment bank Equirus Capital. Separately , Jack Ma, co-founder of Alibaba Group, has also indicated that the world's biggest e-commerce company is ready for a bigger play in India's online retail industry , likely making the country one of the fiercest battlegrounds for global consumer internet companies.

• Himalaya's Neem Face Wash Pips Liv.52 as Top Money-spinner: Purifying Neem Face Wash has emerged as Himalaya Drug Company’s new money-spinner, outstripping its herbal liver medicine, Liv.52, in sales and boosting the company’s presence in the FMCG sector. According to Himalaya’s CEO, Philipe Haydon, Purifying Neem Face Wash is the market leader in the domestic face wash category with about 21% share. It earned the company Rs 300 crore in net sales in 2013-14, way ahead of the Rs 225 crore generated by Liv.52. “With an FMCG product overtaking our flagship pharma product in sales, we are confident the personal care business will surpass pharma sales by 2015-16,” Haydon said. In the domestic face wash category, Himalaya competes with Johnson & Johnson (J&J) and Garnier. J&J’s Clean and Clear and Garnier hold the second and third slots, respectively. Experts say Purifying Neem Face Wash’s success is in part due to the company’s brand equity in the herbal healthcare segment and R&D.

• Hrithik Will No Longer be the Face of Joyalukkas: Kochi-based jewellery retailer Joyalukkas has decided to discontinue Bollywood actor Hrithik Roshan as its brand ambassador as it looks to turn to a “mature and established actress“, toeing the strategy followed by its peers Kalyan Jewellers and Malabar Gold & Diamonds which have roped in Aishwarya Rai Bachchan and Kareena Kapoor Khan, respectively, to endorse their brands. The company's chairman Joy Alukkas said there are no plans to renew Roshan's oneyear contract, which expires this month. “We will now bring in a Bollywood actress who is established and mature and can add value to our brands in India as well as in the global markets. She will be appointed in March so that we can launch her in the next financial year,” he said. Although Alukkas said the company’s marketing team is still working on finding a replacement for Roshan, speculation is rife that Deepika Padukone could well be the next face of the group which has operations spread across the Gulf countries, Singapore, US, UK and Malaysia.

International:

• Chanel Welcomes a New Global Creative Head for Their Make Up Line: After a 2-year-long gap, Chanel has finally taken onboard a new master brain to head its luxe beauty section. Slated to take charge from January 1st 2015, Lucia Pica seems like the perfect person to take on the coveted designation for the Italian fashion brand. Besides being a popular face backstage during Peter Pilotto's fashion shows and ad campaigns, the beauty expert has already begun displaying her talent at Chanel. All set to take on the position, Pica has begun her stint with the signature red lip style for Chanel’s Allure Rouge line, followed by her creations for the Holiday ‘14 Collection and the Spring Summer ‘15 Beauty Collection.

• Sony cancels The Interview release amid threats: Sony Pictures has cancelled the planned US release on 25 December of the film The Interview, after major cinema chains decided not to screen it. The film is about a fictional plot to kill North Korean leader Kim Jong-un. Hackers have already carried out a cyber attack on Sony and warned the public to stay away from cinemas screening the film. The US government said it was considering a "range of options" on how to respond to the attack. "We know that criminals and foreign countries regularly seek to gain access to government and private sector networks - both in the United States and elsewhere," a National Security Council statement said, adding that the FBI was leading the investigation. "We take very seriously any attempt to threaten or limit artists' freedom of speech or of expression." The statement came after US media quoted anonymous officials as saying that the FBI had linked North Korea to the attacks. 

• Hudson's Bay Names Gerald Storch CEO: Hudson’s Bay Co., seeking to accelerate growth on several fronts, has brought in Gerald “Jerry” Storch as its new chief executive officer. Richard Baker, who held the ceo job, will continue as governor and executive chairman of HBC, with Storch reporting to him. Baker and Storch will comprise the office of the chairman. In another top-level shift, Don Watros, who was president of the company, has become president of the group’s new international unit to identify and launch international businesses and operate them, though no possibilities were disclosed Wednesday. International growth could involve an acquisition or furthering Saks Fifth Avenue’s overseas presence. “We are really not ready to have any discussion about international,” Baker told WWD.

• Giorgio Armani Opens Store in Miami's Design District: Giorgio Armani has joined the growing number of fashion houses with stores in Miami’s Design District. A 4,300-square-foot, two-story Giorgio Armani boutique just opened there, its interior created by the designer and his team of architects. It offers both ready-to-wear and accessories for women and men in an environment that reflects the Armani ethos. Among the details are gray marmorino plaster walls, teak tables with black glass tops, and mirror-effect steel details that read natural bamboo. The store brings Armani Group’s number of total stores to 185, of which 18 are Giorgio Armani boutiques.

• Maesa Taps Shawn Haynes as SVP: Maesa has created a new position for Shawn Haynes. The newly appointed senior vice president of sales for mass and drugstore retailers will develop an annual sales plan, implement distribution strategies and manage the current sales team. “Shawn will bring value to our growing exclusive brand business,” said Gregory Mager, chief executive officer and founder of Maesa USA. “Maesa launched its first exclusive brand through a partnership with Wal-Mart two years ago with the brand Flower. Since then, a few major launches scheduled for 2015 and 2016 are currently in development with other mass and drug retailers, and this business needed structure and leadership.” Haynes had served as vice president of sales at E.l.f. Cosmetics, where he developed the strategy for distribution expansion and retail sales growth, ultimately growing brand sales by 100 percent over a two-year period.

• Frederick Mostert to Retire from Richemont: Frederick Mostert, chief legal counsel at Compagnie Financière Richemont SA and a longtime crusader for the company’s intellectual property rights, will resign from the board of directors and the group management committee, on Dec. 31 in anticipation of his retirement in 2015. Mostert joined Richemont in 1990 and was appointed to its group management committee in 1994. He has served as a member of the board of directors since 2010. After retiring next year, he will continue to work as a consultant for Richemont in intellectual property matters. Richemont’s chairman Johann Rupert said Mostert had told him of his desire to “extend his teaching commitments as a law professor and specialize in copyright and intellectual property rights more generally.” Rupert added that Richemont “will be able to continue to benefit on an advisory and consultancy basis from Dr. Mostert’s internationally acknowledged expertise in intellectual property law.”

Tech:

• Handset Makers Vie to be The Early Bird Ahead of 4G Service Rollout: A slew of 4G handsets are hitting the market as mobile handset makers seek to get the first-mover advantage ahead of the launch of 4G data and voice services across India by Mukesh Ambani's flagship telecom venture, Reliance Jio Infocomm, and expansion of offerings by the country's No. 1 carrier Bharti Airtel. While device manufacturers such as Xolo, Xiaomi, Gionee, Lenovo and Microsoft Devices have launched affordable 4G smartphones in the country in the ₹ 8,000 - ₹ 15,000 range, players like Motorola, Micromax, LG and Karbonn have announced plans to launch devices at these price points soon. “As and when operators develop larger and deeper 4G networks and push their 4G services, if you are one of the options available in the market, then the benefit directly comes to you,“ said Sunil Raina, business head at Xolo. Jio, which has spectrum in the 2300 MHz band (TDD-LTE) across India, is widely expected to launch 4G services in phases starting March 2015, while Bharti has already launched its 4G services in 15 cities using the same technology and is in the process of expanding its 4G footprint. Both these operators, along with Vodafone India and Idea Cellular, have the 1800 MHz airwaves, which support 4G on the FDD-LTE technology. Currently, handsets supporting both TDD-LTE and FDD-LTE from the likes of Apple, HTC and Oppo are offered at prices upwards of . 30,000, while the ones in the afforda` ble range support only TDD-LTE.

• Apple stops online sales in Russia as rouble tumbles: Apple said on Tuesday it had halted online sales of iPhones, iPads and computers in Russia as the rouble's plunge made it difficult for sellers of imported goods to fix local prices. The US consumer electronics giant suggested the halt was only temporary and only related to the country's currency crisis, which has seen the rouble plummet 20% against the dollar this week and about one-third in a month despite Moscow's attempts to defend it. "Due to extreme fluctuations in the value of the rouble, our online store in Russia is currently unavailable while we review pricing. We apologize to customers for any inconvenience," a company spokeswoman said. Overnight Monday the Central Bank of Russia ratcheted up interest rates from 10.5% to 17% to stem the outflow of currency from the country.

• Twitter’s transparency reports are now available in 10 languages: Since launching its first transparency report in 2012, it has been Twitter’s aim to ensure users from around the globe can access this information in a clear and straightforward way. Today, Twitter announced that the transparency reports will now be available in 10 languages – fulfilling its July promise to add approximately one dozen report languages by the end of 2014. Twitter’s transparency reports are now available in 10 languages. The company naturally took to Twitter to announce the update, noting that individual country pages will follow in early 2015. The available 10 languages are English, Chinese, German, French, Italian, Korean, Arabic, Portuguese, Spanish and Turkish. Twitter transparency reports are released biannually.

• Ex-Hulu CEO Unveils Vessel, a YouTube Competitor: After departing from Hulu back in Q1 of 2013, former CEO Jason Kilar has unveiled his latest project: Vessel, a video subscription service featuring content creators and media brands. The service is aimed toward viewers who follow YouTube stars and other internet personalities like Marcus Butler, Ingrid Nilsen and Shawn Dawson. Actor Alec Baldwin has also reportedly agreed to produce a Web series titled “Love Ride,” where he’ll dish relationship advice for couples during their taxi ride together. The subscription service will launch in early 2015 as a two-tier service: an ad-supported free version and a $2.99 monthly subscription for fewer ads and early access to the latest content. Although the site does not promise exclusive content, it is pushing to release content at least 72 hours before other sites.

• BlackBerry Launches the Classic, Aims at QWERTY Productivity: At an event in New York today, BlackBerry announced its newest device, the BlackBerry Classic. Harkening back to BlackBerry’s strongest days of yore, the phone features a, well, classic QWERTY form-factor, running the company’s newest version of BlackBerry OS 10. Like the Passport before it, the phone features a square Gorilla Glass 3 display. The screen is 3.5 inches diagonally, touchscreen-enabled, and comes with a 720 x 720 resolution (294ppi). There’s also an 8 megapixel rear camera, a 2 megapixel front facing one and the usual array of transmitters and sensors. Performance-wise, there’s a dual-core 1.5 GHz Adreno processor and 2GB of RAM on 16GB of storage (there’s Micro SD expansion, though). Those specs aren’t exactly high-end for today’s standards, but its worth noting the Classic is also pushing much less pixels than the average smartphone too. The Classic is running on BlackBerry OS 10.3.1, which comes with battery optimizations to help the phone last up to 22 hours of continuous usage, or about 50 percent longer than the BlackBerry Bold, according to the company. In order to use Android apps not optimized for the display’s unusual aspect ratio. As usual, these apps are available through Amazon’s App Store, rather than the Google Play Store. Of course, you can also install apps through the company’s proprietary BlackBerry World.

• Foodpanda Gobbles Up Central Eastern Europe Food Startups: Last month, Rocket Internet-backed food delivery service Foodpanda made a set of acquisitions in India and Mexico. Now it’s made another series of purchases in Central Eastern Europe. In Serbia, Montenegro and Bosnia & Herzegovina, the company has taken over Donesi.com and will merge operations under the Donesi brand. In Croatia, its acquired Pauza.hr, which will continue to operate under its own brand. Finally, Foodpanda has acquired NetPincer.hu in Hungary which has been operating since 1999 and works with over 550 restaurants across that country.