Daily News Digest- 19th Dec'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Ex-Promoter may Pilot SpiceJet Out of Money Trouble: SpiceJet's fortunes took a dramatic turn for the better on Thursday with former promoter Ajay Singh and two `blue-chip' investors said to be pumping in about ₹ 1,200 crore to rescue the financially strapped airline, according to several persons aware of developments. Singh, closely associated with the ruling Bharatiya Janata Party , embarked on a hectic series of meetings with avia tion ministry officials in Delhi on Thursday. The airline will come up with a financial plan for revival on Monday, according to the persons cited above, with Singh and the other investors getting a stake in the airline.It needs to be noted, however, that SpiceJet's market cap on Thursday was ₹ 706.57 crore, with the stock rising 0.38% to . 13.20, after a drop of 38% in ` the past month since the crisis began. “They (SpiceJet officials) have informed the civil aviation ministry that movement on the deal will happen as soon as next week,“ said Civil Aviation Minister Ashok Gajapati Raju. “SpiceJet is going through a financial crisis. Spicejet said they are talking to investors. It is confident investment will come soon.“ One of those cited above said, “Singh has evaluated the company and is believed to have said that the company has the potential to revive. He also met the SpiceJet management at their office in Gurgaon today (Thursday).“

• Before Eagle Lands, Amazon Wants FDI Runway Widened: Ahead of US President Barack Obama's visit to India next month, ecommerce major Amazon has asked the government to allow 49% foreign direct investment in e-tailers sell ing directly to consumers. It has also asked the Centre to amend the law on value-added tax to overcome clashes with local tax authorities that have dogged its operations in Karnataka. Amazon raised these demands at a meeting between officials from the industry ministry and US companies. The meeting was to address the concerns of USbased MNCs ahead of the first meeting of the inter-ministerial committee set up to fast-track investment proposals from the US. Obama is the chief guest for Republic Day celebrations next year. Amazon, which has invested $300 million in India so far, argued that the current policy permitting only business-to-busi ness (B2B) sales to foreign investorfunded companies restricts investments and local sourcing from manufacturers. “Clarify and remove FDI restrictions in ecommerce. Allow at the minimum 49% FDI in business-to-consumer ecommerce,“ Amazon said, according to a document prepared for the meeting. A government official privy to deliberations confirmed that Amazon has sought FDI in businessto-consumer (B2C) ecommerce.

• Flipkart among world's 5 biggest tech startups: Qatar Investment Authority (QIA) has picked up a $150-million stake in India's e-commerce poster boy Flipkart, which closed a $700-million fund-raising on Wednesday, sources directly involved with the matter said. QIA is the new investor buying into Flipkart, valued at around $11 billion, taking it among the top five privately held technology startups in the world. TOI had earlier reported that existing investors had committed $500-600 million in fresh financing. Middle East sovereign funds have been looking at India's e-commerce sector for a while. QIA, the owner of Harrods department store in London, joins GIC of Singapore as another sovereign investor in Flipkart. Deutsche Bank advised QIA on the just concluded investment, said sources cited earlier. The investment in India's e-commerce sector, which is projected to grow seven-fold to $22 billion by 2018, adds to QIA's spree of acquisitions. QIA has investments in Tiffany, Barclays, Credit Suisse and a $1.2 billion stake in India's biggest mobile phone carrier Bharti Airtel.

• Vistara Starts Sale of Tickets, Flights Take Off from Jan 9: Vistara, the airline joint venture between the Tatas and Singapore Airlines, started selling tickets on Thursday, executives at travel agencies said. The airline will start flights on January 9 on the Delhi-Mumbai route and follow it up with flights in the Delhi-Ahmedabad and Mumbai Ahmedabad sectors. “The airline's inventory is on its Amadeus global distribution system but isn't showing up yet on the online travel portals,“ said an executive at a travel company, who didn't want to be named. Vistara's lowest fares--on a 30day advance purchase--on the Delhi-Mumbai route is ₹ 5,500, that on Delhi-Ahmedabad is ₹ 4,900 while Mumbai-Ahmeda bad is ₹ 3,800 according to inventory on the GDS, said the executive. Vistara's Ahmedabad flights will be launched days before Vibrant Gujarat festival, the biennial investors' summit to be held during January 11-13.

• Honda Betting on Affordable 2-wheelers to Overtake Hero: Riding on the success of its Indian operations, Japanese auto major Honda Motor is developing a new range of affordable motorcycles and scooters for Indian customers to gain market leadership even as its narrows the gap with its partner-turned-rival market leader Hero MotoCorp in the 15 million units domestic twowheeler market. These new range of low-cost motorcycles and scooters, that are expected to hit the streets in two to three years, are currently being developed at its Manesar-based Research & Development facility that houses over 200 engineers, mostly sourced from India. Honda Motorcycle and Scooter India (HMSI), the fully-owned local subsidiary of the world’s largest two-wheeler maker by value, has outlined these details tailored on the need of its sales, engineering, design & bough out (SEDB) concept that would allow the rollout of Indian customercentric bikes and scooters. “We are working closely with our technical centre to develop motorcycles and scooters keeping in mind the local customers that would change the Indian market in terms of pricing, but would not be a lowcost product. These would be extremely innovative next-gen mobility vehicles bearing the Honda stamp and based on materials sourced from local Indian market that would help us control costs, but maintain high aspirations like most of our brands,” HMSI president and CEO Keita Muramatsu said.

• Snapdeal expects online auto sales to touch Rs1,000 crore: Snapdeal.com, an online marketplace, on Thursday announced a partnership with Hero MotoCorp Ltd to sell the company’s two-wheelers and expects its automobile category to generate Rs.1,000 crore of business in next six to 10 months. Snapdeal.com, run by Jasper Infotech Pvt. Ltd, gets Rs.15 crore of business in the automobile category currently in terms of gross merchandise value (GMV), or the value of goods sold on the site. The company expects to close the fiscal year ending March 2015 at Rs.300 crore GMV from the auto segment. Tony Navin, senior vice-president, Snapdeal.com, said the company is in talks with at least three more two-wheeler companies to take their products online in the next three to four weeks. Taking more four-wheeler brands online on its platform is also on the cards. He declined to share details as deals with the automobile firms are yet to be inked. Snapdeal, which started selling automobiles online nearly a year ago with motorcycles and electric scooters, has sold 700 Hero motorcycles since 10 December. “This is the first time we tried out the online platform for selling our bikes and the response has been phenomenal,” said A. Srinivasu, head of national sales at Hero MotoCorp.

• RIL Plans a Grand Show for its Staff With Aamir's PK: He has eyes like headlights and ears like flying saucers.He steals money from beggars and clothes from parked cars; relieves himself in public; finds faults in almost everything while travelling across the country in fancy costumes. And now PK and his celluloid adventures against God and godmen will also set the plot for a unique HR initiative. Reliance Industries (RIL) -the country's largest private sector company by revenues -is organising what arguably will be the largest-ever movie show in India after Aamir Khan's film is released on Friday . For the last weekend of this year, the company has picked up 58,000 tickets of the movie for its employees and their families in Mumbai, spanning single screens and multiplexes. The weekend of December 27-28 also coincides with the annual celebrations to commemorate the 82nd birth anniversary of RIL's founder chairman Dhirubhai Ambani. Every December, the Group undertakes various HR initiatives to celebrate the event through a month long celebration that culminates in what is internally called Reliance Family Day. Even this year, many events — from talent shows, cricket matches, marathons and carnivals — have been organised across the company’s offices and factories in Mumbai, Jamnagar, Hazir and Patalganga and other places but the highlight will clearly be the screenings in Mumbai.

• Yum! in Talks with Samara Cap to Sell KFC Biz in West India: Yum! Restaurants India is in talks with private equity firm Samara Capital Partners to sell the company-owned KFC restaurant chain business in West India, a person aware of the discussions said. The company directly operates 18 KFC outlets in the region. “There are multiple buyers keen on buying Yum!'s KFC West business, given the brand's well-established equity. Yum! is keen on partnering with a PE fund rather than selling the business to one of its existing franchise partners. Samara is a likely contender for the business,“ said an official directly aware of the developments. Sumeet Narang, co-founder and managing director of Samara Capital Partners, was unreachable for comment. A Yum! Restaurants India spokesperson declined to comment on market speculation. “Yum! India is uniquely well positioned with both equity and well capitalised franchisees across all markets including the West, which is predominantly a franchise market. Yum! is one of the fastest growing restaurant companies in India and while we continue to explore opportunities in the course of business, as a policy we do not comment on market speculation,“ the spokesperson said.

• Barista Coffee on Overdrive, Plans 550 New Outlets in 5 Yrs: The new owner of Barista Coffee plans to open 550 outlets of the coffee chain in the next five years with sales target of $50 million (about Rs 3,100 crore) for the fifth year. According to Carnation Hospitality, which acquired Barista Coffee from Lavazza Spa in July. Carnation, a wholly owned subsidiary of Haryana-based packaging company Rollatainers, has since then acquired Maple foods business, which supplies food to hotels and corporates and has operations in the banqueting space, and Kylin chain of casual and fine dining restaurants. It’s also in the process of introducing global players such as US hamburger chain Wendy’s and Jamie’s Italian, the Italian restaurant brand of celebrity chef Jamie Oliver, in India. Of the 550 Barista outlets it plans to open in five years, 350 will be owned and operated by the company, while the rest will be run by franchisees.

• Myntra Bets on `McKinsey Talent' to Up Market Share: Myntra, India's leading online fashion store, has reposed its faith in former McKinsey executives to garner a larger share of the rapidly growing market for online fashion retail. The Bengaluru-based retailer, which has been acquired by Flipkart, has rewarded some of these executives with plum salaries and designations, including senior vice president, according to people familiar with the matter. “I knew that e-commerce is the sector I had to be in,“ said Abhishek Verma, senior vice president and head of private brands at Myntra, who worked with McKinsey for nearly eight years before being hired by founder Mukesh Bansal in May. Verma is tasked with expanding the scale of ten in-house brands of Myntra, which is seeking to build on its 30% share of India's online market. Similarly, Rahul Chaudhary, who came on board from McKinsey in September, is vice president of strategy at Myntra while his former McKinsey colleague, Sidharth Gupta, who joined last month, is vice president and head of strategy and corporate development.

• Snapdeal Scouts for Logistics Firm to Beat Last Mile Blues: Online marketplace Snapdeal.com is seeking to acquire a significant stake in a logistics company or form a joint venture with one to overcome the delivery challenges in India's fast growing e-commerce market, two people familiar with the matter said. Snapdeal is flushed with funds, having raised $627 million (about ₹ 3,845 crore at the then exchange rate) from Japanese internet, media and telecom conglomerate SoftBank in October. “They are keen to have something of their own but it is too late to build a network from scratch,“ one of the people quoted above said on condition of anonymity. “They are considering all options, including a significant stake buy or a joint venture to have some control on quality.“ The second person, who also declined to be named, said Snapdeal is most interested to start with a minority stake with a right to buy the remaining stake later. “They want a company with a pan-India network with a significant presence in tier-II and III cities. They also want the company to have a good reverse logistics capability ,“ this person said. Snapdeal declined comment on queries related to their plan to get into logistics.

• Hyundai's Elite i20 Wins ICOTY Award Again: Hyundai's Elite i20 has been named the Indian Car of the Year 2015, the second consecutive year that a Hyundai model has bagged the award. The jury for ICOTY comprises the editors of top motoring publications. BS Seo, MD and CEO, Hyundai Motors said: “Winning 2 successive ICOTY awards symbolises Hyundai's commitment to Indian customers by offering world class standards of quality products, design and branding.“

• India's Heaviest Rocket GSLV Mark III Launched: In yet another flawless operation, the Indian Space Research Organisation (ISRO) on Thursday demonstrated its growing technical prowess by conducting a textbook launch of a completely new vehicle. The rocket was the experimental Geostationary Launch Vehicle (GSLV) Mark III, the heavy lifter ISRO is developing to put 4-tonne class satellites into geostationary orbit. The first two stages of the rocket were tested on Thursday, and it also tested a crew module that splashed down near the Andaman islands. The GSLV Mark III has been under development for the last 10 years. Its first two stages were completely new, and its path through the atmosphere was the most critical part of the mission. The recovery of the crew module was yet another key experiment, as it was being prepared to launch humans into space.

International:

• Gap Launches Flagship on JD.com: Gap Inc. on Thursday launched an online flagship on JD.com, a leading Chinese e-commerce site. More than 600 items for men, women and children are available as part of Gap’s initial online selection for the site, which is offering exclusive discounts. “The launch of Gap’s flagship store on JD.com underlines our confidence and commitment to this growing market. We are truly excited about this new partnership, which allows us to further engage with more local customers, providing them with authentic products with high quality and a superior shopping experience,” May Ng, vice president of e-commerce for Gap China, said. In China’s increasingly competitive e-commerce market, JD.com has aggressively tried to differentiate itself from other major e-commerce platforms — especially Alibaba’s Taobao — as a purveyor of authentic products, a positioning which makes it an attractive partner for international brands looking to make their mark in the world’s most lucrative online shopping market.

• South Korea's 8Seconds Eyes Expansion: South Korean fast-fashion brand 8Seconds is nearly three years old and is growing rapidly in terms of sales as it plots international expansion. Heading into the year's final month, the brand expects its full-year 2014 sales to grow 20 percent on the year to 156 billion won, or $143.5 million. Over that same period, the company opened 2 stores to bring its total to 28. By 2017, 8Seconds aims to achieve 380 billion won, or $349.49 million in sales, and increase the store count to 58. Kim Jeong-mi, the head of 8Seconds and managing director at its parent company Cheil Industries, said the brand is keeping its focus on its home market of South Korea, where it competes with the likes of Hennes & Mauritz, Fast Retailing's Uniqlo and Inditex's Zara. But clearly the brand is eyeing international markets. 8Seconds recently revamped its logo to include a Chinese version of the name to cater to the Chinese customers who make up a large portion of its customer base.

• Donna Karan Opening Urban Zen Pop-up in Aspen: Donna Karan is opening an Urban Zen pop-up boutique in Aspen on Monday. The 2,500-square-foot store, which will be open through mid-April, is located at 501 East Dean Street, in the retail area of The Residences at The Little Nell and within walking distance to Aspen Mountain’s Silver Queen Gondola. The ski resort is dear to Karan. “I’ve spent endless holidays there with my family and have so many friends who live there,” she said. “My new Urban Zen store is my way of dressing and addressing a community that’s given me so much love and enjoyment — in the same way as my West Village and Sag Harbor stores.” Alongside women’s and men’s apparel and leather goods, jewelry, home decor and art, there is an exclusive collection called Silver Snow, which focuses on white, gray and silver and features cashmere sweaters, sweatpants and leggings, as well as suede, shearling and down pieces. It is priced from $995 and $5,995.

• San Francisco Academy of Art Students Open Shop: Students from San Francisco’s Academy of Art University are getting some first-hand experience this holiday season. The school has opened a permanent 1,500-square-foot not-for-profit retail space called Shop657 at 657 Sutter Street that will sell apparel, shoes, accessories and decorative lifestyle pieces designed by students and alumni. “With Shop657 we are carrying on the momentum that the Academy of Art University School of Fashion experienced with our successful pop-up store, which made its debut at our spring show this past May,” said Keanan Duffty, the school’s senior director of fashion merchandising. “Creating and operating a dedicated fashion retail space is a unique opportunity and a logical progression for our fashion merchandising and design students and alumni.” The school’s merchandising students transformed what was formerly a liquor store into the retail store, and they also will operate the boutique. Items for sale range from $50 to $800 and include products from alumni brands including Mansoor Scott, San Francycle, Rinat Brodach, Freda Salvador, Mute by Joanne Lu, Apartment 415 and Golden Pony Workshop.

• China, India Criticize U.S. Textile Tariffs: Trading partners lauded the U.S. at a World Trade Organization forum for maintaining an open trade regime, and for the recovery of the economy, but also took issue with the U.S. maintaining high tariffs in sectors such as textiles and for resorting to incentives for reshoring. “As a result of the United States’ open markets, we are the world’s largest single-country importer, importing $2.76 trillion in 2013, which is up an additional 3.4 percent so far in 2014. This is equal to $7.6 billion of imports of goods and services per day, or $5.2 million per minute,” said Michael Punke, U.S. ambassador to the WTO. “In 2013, 68.6 percent of all U.S. imports, including those under preference programs, entered the U.S. duty-free,” Punke said during a two-day review of U.S. trade policy, which ended Thursday.

Tech:

• Amazon Launches Prime Now One-Hour Deliveries: Amazon is throwing its hat into increasingly busy the same-day delivery ring today with the launch of Prime Now. It’s starting small though. The service is only available in ‘select areas’ of Manhattan and covers ‘essential daily items’ like paper towels, shampoo, books, toys and batteries. Orders can be placed by existing Prime members through a Prime Now app on Android and iOS, which will also notify users when new areas are opened up. The company is charging $7.99 for one-hour delveries, while if you can wait two hours the delivery is free.

• Paytm Set to Apply for a Payment Banking Permit; To Enter Singapore: Paytm, a fast-growing mobile wallet company, is set to apply for a payment banking permit, becoming the first entity to formally announce interest in launching a service that is part of the Reserve Bank of India's financial inclusion initiative. The company also plans to expand services overseas, starting with Singapore. Paytm is planning to go solo on the application and won't be partnering with any banks, Amit Lakhotia, vice-president of business at Paytm, told ET. “Out of the total of 30 million mobile wallets in the country, 18 million are Paytm wallets and we feel we are better poised to do this on our own.“ He said the company doesn't have the cost structures which banks have. This should allow it to offer incentives, including higher interest rates compared to banks, to attract customers. A mobile wallet is a prepaid payment instrument. It allows customers to digitally store money in a secure virtual wallet and use it for transactions such as DTH service top-ups, mobile recharges, paying utility bills and buying movie tickets.

• Micromax Yu to Sell Yureka Smartphone on Amazon in Jan: Micromax-owned Yu Televentures will start selling its first smart phone, Yureka, from early January, according to a top company executive. India’s second largest smartphone maker Micromax has an exclusive partnership with US-based operating system maker Cyanogen for using its CyanogenMod technology in the new device. Booking for the ₹ 8,999, dual-sim, LTE-enabled phone will start on e-commerce major Amazon.in at 2 pm on Friday.

• India Becomes Fastest-Growing, Third-Largest Market for Dell: Michael Dell’s decision to take Dell private last year has started showing signs of change for the company in India, where it has grown to become a $2 billion entity. Growing at close to 50% in the last one year, India has now become Dell’s third largest market in terms of revenue after US and China. “Our pace of growth makes India the fastest growing market for Dell globally and India has now emerged as the third largest market for Dell, next only to the US and China,” Alok Ohrie, managing director at Dell India told ET. “India is also the largest workforce for Dell outside of the US and representative of every single business of Dell.” The company has been rapidly growing in most of the segments it is present in. As per market research firm IDC’s latest India PC market report, Dell has inched closer to the top position in the third quarter of 2014 with 22% market share, trailing HP by 3.5% in terms of total number of units. For the same period last year, the company was the third largest player with only 11.8% market share. “In the server business, we have grown at an even faster rate,” Ohrie said. The growth has been driven by the compa ny’s aggressive expansion in smaller towns and cities, using partners to sell its products instead of selling everything directly to the customer and also due to IBM’s exit from the entry-level server business.

• Zomato enters Italy, acquires Cibando: Online restaurant guide Zomato has acquired Italy's leading restaurant search service Cibando, for an undisclosed sum, making it the company's fifth global acquisition this year. Zomato plans to invest $6 million in Italy over the next two years. The Cibando brand will be integrated with Zomato and over the next few months, Italian users will be able to use Zomato for all major cities in the country. This is Zomato's fifth acquisition in the recent months. Zomato acquired MenuMania in New Zealand, Lunchtime in Czech Republic, Obedovat in Slovakia, and Gastronauci in Poland recently. Led by Info Edge (India) Limited and US based investment fund Vy Capital, with participation from Sequoia Capital, Zomato had recently raised about $60 million. Founded by Italian serial entrepreneur, Guk Kim in 2010, Cibando currently boasts well over 82,000 restaurants and over 7,000 reviews written by its own editors.

• Wordpress 4.1 Brings Distraction-Free Writing and More: The very latest version of WordPress is here, just in time for Christmas. WordPress 4.1, dubbed “Dinah” in honor of jazz singer Dinah Washington, brings a number of new features along with a new theme. Every year, WordPress releases a new theme and this year is no different. The new Twenty Fifteen theme is beautiful, responsive and comes bundled with WordPress by default and uses Google’s Noto Web font. 

• Line Is Buying Microsoft's MixRadio Music Streaming Service: Line, the popular messaging client, today announced it is acquiring Microsoft’s MixRadio music streaming service. The deal is expected to complete in early 2015. As part of the move, MixRadio will continue to work with Microsoft in order to maintain its personalized music experience on Lumia smartphones – now as a third-party service. Line notes in its press release “the MixRadio team firmly believes that Line is the optimal partner to support the company’s future expansion and development.” MixRadio was originally developed as a Nokia service, but had begun a spin-off process to become a standalone company after deep budget cuts once Nokia’s mobile division was acquired by Microsoft. Now that the service is officially leaving Microsoft’s hands, you can expect to see it pop up on iOS and Android in the not-so-far future.