Daily News Digest- 9th Feb'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Adidas Appoints Damyant Singh as its Brand Director in India: German sportswear major Adidas Group has appointed Damyant Singh as its Brand Director in India. Damyant will report directly to Dave Thomas, the Group's Managing Director in India. He succeeds Tushar Goculdas, who was recently appointed as the Brand Director-Adidas Emerging Markets. “Damyant is a very experienced marketing professional and has broad experience and strong knowledge of the Adidas brand, the Indian sports market and consumers. “I am very confident that with him leading the marketing for Adidas in India, we will see the brand reach new heights in the coming months and years,“ Thomas said.

• Race for Kesoram's Tyre Unit Hots Up as Apollo Enters Fray: Two of India's leading tyre makers, Madras Rubber Factory (MRF), the country's largest tyre manufacturer, and Onkar Kanwarled Apollo Tyres are battling it out to acquire the main tyre unit of BK Birla flagship Kesoram Industries, raising the possibility of a bidding war for the factory which is located in Uttarakhand. While MRF was the front-runner for the asset, Apollo Tyres has recently entered the fray, said multiple sources aware of the ongoing negotiations. For both Apollo and MRF, the acquisition will consolidate its manufacturing presence in the north Indian market and get a stronger grip over the commercial vehicles tyre segment where they are the number 1 and 2 players, respectively. The next one week is expected to be crucial. According to the sources cited earlier, on Monday , the promoters of Apollo and Kesoram are expected to meet in New Delhi to discuss the matter. Later in the day , Kesoram's management is also scheduled to meet with its consortium of lenders to get their approvals to hive off the tyre plant to a drop down subsidiary . This is expected to facilitate the monetisation exercise and improve the net worth of Kesoram, which is a listed company . Interestingly , both MRF and Kesoram have separately called for a board meeting on February 12 to announce its quarterly financial numbers, triggering speculation that a deal between the two is imminent, barring a compelling last-minute counter offer from Apollo. 

• HUL Tests Online Waters with Direct Selling Switch: Hindustan Unilever (HUL) has changed the operating model of its direct-selling business, Hindustan Unilever Network, paving the way for a likely debut in e-commerce. “The Hindustan Unilever Network business model has transitioned from physical servicing to an online ordering and fulfillment model,“ an HUL spokesperson said. Consumers can buy the Aviance and Lever Ayush range of health and beauty products through HUL network consultants, who will operate only online now and will no longer have any physical offices. HUL did not provide additional details. The maker of Dove soap and Surf detergent, which launched the direct-selling division in 2003 to offer high-value home and beauty-care products, attributed the change in model to “optimising operating costs and making the business more competitive.“ Analysts said HUL may be testing the waters in the ecommerce space and could evolve into selling everything from detergents to deodorants online -a small but rapidly growing business in India. Unilever chief executive Paul Polman had said in an interview last week: “Over the next few years, our global e-commerce business will approach the size of HUL's business...it won't be small. However, we believe e-commerce should be done through distributors rather than on one's own.“

• Jet Offers More Free Miles on Vistara Routes: Jet Airways continues to take on Vistara aggressively, now offering more privileges and benefits under its frequent flyer programme specifically on routes flown by the full-service carrier of Tatas and Singapore Airlines. Jet Airways has announced triple its normal free miles under the JPMiles programme on business class and double the base JPMiles on economy class bookings for travel till March 31. The “promotion is applicable for travel between Mumbai, Delhi and Ahmedabad Sectors only“, it said on its website. Vistara, the third full-service airline in India after Air India and Jet Airways, started its operations on January 9 with flights from Delhi to Mumbai and Ahmedabad. It has faced stiff, though somewhat subtle, competition from incumbent players. Low-cost flier, IndiGo, for instance, chose the Mumbai-Ahmedabad sector ₹1,799 when it refor its lowest fare of ` cently introduced discounted fares.

• World Cup Brings Bonanza for Travel Cos as 6,000 Indians Fly Down Under: Close to 6,000 Indians will fly to Australia to watch the cricket World Cup starting next weekend, and tour operators say Indian cricket fans have generously loosened their purse strings to buy special holiday packages around the event. “These sports events are the new holiday (and) travel destinations of well-heeled Indians, especially the superrich,“ said T C Guruprasad, managing director at Cen trum Direct , which has processed around 500 visas for Australia for the world cup through its travel arm Club7 Holidays. “For a minimum one match holiday people are ₹1.5 lakh wherespending close to ` as those planning an Australian holiday around the matches are ₹12 lakh,“ he added.spending up to ` Dr B N Raghukumar, a doctor based in Mumbai, will take a 12day tour of Australia with seven family members. Not only has he booked the best seats inside the stadium for the India-Pakistan match on February 15, but also ensured top hotels for stay. “Centrum helped me customise our holiday around the India-Pakistan match and let us choose hotels of our choice like Palazzo Versace at Gold Coast (Queensland), Four Seasons in Sydney and in Sydney and Crowne Plaza in Melbourne,“ he said. The group is spending ₹25.69 lakh in all.

• Colgate, Dabur Outshine HUL in Oral Care: A major shakeup is underway in the Rs 6,200crore oral care market with Hindustan Unilever losing ground, with homegrown Dabur eating into its market share and Colgate-Palmolive consolidating its leadership. As per research firm Nielsen's data on the domestic toothpaste market, HUL has been losing market share. While category leader Colgate-Palmolive gained volume market share in 2014 at 56.7% as against 55.9% in 2013, HUL's share declined to 21.5% from 22.8% in 2013. Market share of HUL's both brands, Pepsodent and Close Up, dipped during the period. Dabur also gained volume market share from its brands Dabur Red and Meswak in 2014 to 13.4% from 12% in the previous year. Analysts blame HUL's “wrong strategy“ of just focussing on two brands -Pepsodent and Close Up -while rivals have focussed on product innovation and offering a bouquet, specially after the entry of P&G into the segment albeit with little initial success.

• Faasos Food Set to Raise Rs 120 Crore: Faasos Food Services, a technology-focused quick-service restaurant chain backed by Sequoia Capital, is raising $20 million (₹120 crore) in a fresh round of funding led by Lightbox Ventures. This is the highest fund-raising by a homegrown QSR chain and a shot in the arm for local startup eateries that have lately seen investor interest wane. Fundraising comprises a $16 million equity investment by Lightbox and Sequoia, and a $4 million debt. Pune-based Faasos, which hawks wraps and biryanis from 90 outlets across six cities, will use the funds to add 10 cities over the next 12 months.It expects to cross ₹100 crore in revenue by March 2016. “We expect to break even by March 2018 on revenues of ₹450 crore,“ Jaydeep Barman, founder and CEO of Faasos, told ET. Much of this growth, said Barman, will come on the back of extensive investments the company has made in technology and data analytics in the past couple of years. “Anything hab years. “Anything habit-forming is more susceptible to technological disruption,“ said Barman, a former McKinsey and Co executive who founded Faasos in 2004 with Indian Institute of Management-Lucknow batchmate Kallol Banerjee.

• Marico to Revamp its Strategy, Eyes 20% Growth: Homegrown FMCG firm Marico is revamping strategy for its youth category products such as hair care items and deodorants and aiming for up to 20% growth after witnessing stagnation. The company, which sells youth brands such as Set Wet, Zatak and Livon in hair care and deodorant categories, is focussing on innovation to accelerate sales growth. In an investor update, Marico said in the short to medium term outlook, it would “revamp strategy and drive innovation in the youth portfolio to enable growth at about 15% to 20%“.

• Cisco says Key Bengaluru Unit has filed 800+ Patents: India plays a key role in the development of new products and solutions at networking giant Cisco with its Bengaluru unit filing over 800 patents till date, a senior executive said. The US-based firm spent about $6.3 billion or 13.4% of FY14 revenues on R&D globally. “From being a centre for cost advantage to a skill pool, India has today become a centre of innovation for us. The impact that India is creating is phenomenal and every solution that we have, India has an imprint on it,“ said Cisco executive vice president and chief development officer Pankaj Patel.

• Hero's Unisex Scooter to Take on Honda's Activa: Having consolidated its pole position in the face of stiff competition, Hero MotoCorp wants to take the battle to its arch rival's stronghold. With scooter sales outpacing motorcycles in the domestic two-wheeler market, Hero MotoCorp has decided to expedite the launch of a slew of scooters, including a unisex scooter developed on a new platform that will be pitched against Honda's best-selling Activa. Hero's strategy is to quickly bring in new scooters and tap the stupendous growth in the sector, which at 21% for the fiscal, makes it the fastest across segments in the Indian automotive market, according to two highly placed industry executives familiar with the development. “Hero is aiming to cater to every customer segment and hence it wants to build an arsenal of scooters in the short to medium term and has expedited the launch of these new scooters to be launched ahead of its new motorcycles. This is a strategic call taken by the company,“ a top industry executive told ET on condition of anonymity.

• Mum-Dubai busiest route in 2014: The Mumbai-Dubai sector was the busiest international city pair for travel to and from India last year.With as many as 17.5 lakh people flying between these two cities, closely followed by 13.6 lakh between Delhi and Dubai, the Emirate emerged as the destination most frequented by Indians . Dubai saw a whopping 84.5 lakh people flying to and from India last year, way ahead of the second spot of almost 44 lakh occupied by the rest of UAE -of which it too is a part. London, Bangkok, Singapore and Kathmandu were the other major destinations or transit points for Indian globetrotters last year. India is an important market for all airlines as interna tional travel has been constantly growing in the past few years. Forget metros, even small towns are generating huge volumes of traffic.For instance, 4.5 lakh people flew between Sharjah and Kochi last year. Thiruvananthapuram and Dubai saw 4.7 lakh people flying between them last year. Pune, Varanasi and Amritsar also saw substantial numbers flying to overseas destinations.

• Ratan Tata invests in CarDekho: Ratan Tata has made a personal investment in auto classifieds portal CarDekho, once again reaffirming his bullishness around India's rapidly growing digital consumption story . Last year, Tata took a wager on Delhi-based e-commerce biggie Snapdeal followed by jewellery e-tailer Bluestone and online furniture retailer Urban Ladder amid a rush of funds into the thriving consumer internet sector. The 76-year-old chairman emeritus of Tata Sons, the holding company of the $100billion steel-to-software conglomerate Tata Group, has subscribed to fresh shares of the Jaipur-based GirnarSoft which owns and operates CarDekho.com, BikeDekho.com and PriceDekho.com. TOI could not ascertain the exact size of Tata's investment.However, like Tata's previous deals, all of which have been in his personal capacity , this too will be a small minority stake for him in the venture.The real significance of all his investments in new-age internet companies has been in the endorsement that Tata brings along for these fledg ling enterprises.

• Air India Reports Strong Performance in Jan 2015: An over 16% growth in its passenger traffic helped national carrier Air India improve its ticket revenue by 8.4%, which stood at . 1,500 crore in January over the period last ` year, an airline official said on Sunday. Meanwhile, the carrier has also lined up sumptuous Indian cuisines, named after popular cricketers, to cater to its passengers on its flights to Australia for ICC World Cup there. Air India has clocked a higher seat factor on its both national and domestic network during this period as well, the official said. Medanta Group to Invest Rs 1,500 Cr in Next Five Years

• Websites to Start Selling Properties Online: Realty websites firms are making a daunting leap into e-commerce. Housing.com and Snapdeal, both backed by Japan's Softbank, are building technology and teams to sell new properties online to tap India's billion-dollar real estate market. To instill customer trust in a high-risk market, the companies banking on wealth of data, offline partners and brand recognition. “Selling houses online isn't an easy problem to solve,“ said Advitiya Sharma, cofounder Housing.com. “It was because of the lack of a focused realty technology product that selling real estate online hadn't picked up.“ The Mumbai-based company sold 115 apartments online for Tata Value Homes, generating gross merchandise value of at . 50 crore over five days. The least ` website also launched a technol ogy called `Slice View' that allows users to go through each floor of a building project; hovering over a particular flat shows availability and built-up area. For this year, Housing.com al ready has 500 builder campaigns in the pipeline.

International:

• Alibaba to invest $590 mln in smartphone maker Meizu: Chinese e-commerce giant Alibaba Group Holding Ltd said in a statement on Monday it will buy a minority stake in domestic smartphone maker Meizu Technology Co. for $590 million. Alibaba didn’t disclose how much of the privately owned handset maker it will acquire. The deal will help Alibaba push its mobile operating system within China through Meizu’s handsets, while giving Meizu access to Alibaba’s e-commerce sales channels and other resources, the companies said in a joint statement.

• Poundland seeks to buy 99p Stores for £55m: Budget retailer Poundland has said it wants to buy 99p Stores for £55m, subject to approval by competition authorities. The two firms have signed a conditional deal for £47.5m in cash and £7.5m in shares. The sale, should it go through, includes 99p Stores' network of 251 shops, which trade as 99p Stores and Family Bargains. Discounters in the UK have been taking market share from supermarkets.

• Sweaty Betty Receives Catterton Investment: Premium U.K. activewear brand Sweaty Betty has received a “strategic growth investment” for an undisclosed amount from Catterton, a private equity firm. The company’s founders Tamara Hill-Norton, creative director, and Simon Hill-Norton, chief executive officer, will remain with the company and continue to lead the management team. Jon Owsley, a Catterton partner, described the brand as “cutting edge style, high quality and superior performance.” He said Catterton saw a “tremendous opportunity to build on these strengths and to extend Sweaty Betty’s reach in both new and existing markets.”

• Averyl Oates to Leave Galeries Lafayette: Averyl Oates has resigned as commercial director, fashion divisions at Galeries Lafayette and BHV Marais. Oates joined the French retailer 18 months ago, and according to a letter from the company seen by WWD, she was “deeply involved in the transformation plan currently in progress, Ambitions 2020, and in the refurbishment of the future Haussmann flagship men’s wear store to be opened in the second half of 2015.” Oates could not be reached for comment. She will continue to oversee the buying for the autumn-winter 2015 season, and her replacement will be announced in the coming weeks.

• Brands Using Apps to Court Their Best Customers: The smallest screen is shaping up to be the most important one. And on that screen it’s the app that offers brands the most effective way to cater to their best customers. Consumers are doing nearly everything on their mobile devices — from managing the minutia of their daily lives to browsing, comparing prices and buying. Mobile sales grew 36 percent last year to about $49 billion, according to Adobe Digital Index, which found that more than half of mobile transactions took place on tablets, although smartphones are catching up and are expected to eclipse tablets this year. “Smartphones already drive a higher share of visits to U.S. retailers compared to tablets, and with larger screen phones becoming more mainstream, we expect that more consumers will shop rather than just browse on their smartphones,” said Tamara Gaffney, principal analyst at Adobe.

• Weekend Shutdown Raises West Coast Ports' Stakes: In a move that could worsen the congestion at the West Coast ports and cost importers up to $3.8 billion in excess costs this year amid protracted negotiations over a crucial labor contract, the Pacific Maritime Association suspended operations to unload containers off ships over the weekend. The association, which includes 72 multinational cargo carriers and terminal operators, said Friday afternoon that containers were not to be moved on or off vessels docked at 29 ports on Saturday and Sunday. It made the decision in response to what it views as slowdowns orchestrated by the International Longshore and Warehouse Union, which has been embroiled with the employers’ association over the past nine months in talks to finalize a new contract affecting 20,000 dockworkers. “After three months of union slowdowns, it makes no sense to pay extra for less work,” said a PMA spokesman, “especially if there is no end in sight to the union’s actions, which needlessly brought West Coast ports to the brink of gridlock.”

• NYFW Economic Impact Close to $900M a Year: Rep. Carolyn Maloney (D., N.Y.) said that was her reaction to the economic impact made by New York Fashion Week — which alone totals almost $900 million a year — and the industry as a whole that was indicated by the results of a study she had put together as the newly appointed ranking member of the House Joint Economic Committee. Maloney, a founding member of the Congressional Apparel Manufacturing and Fashion Business Caucus, told WWD that while she was aware how important the fashion industry was, “until I started working on this report, I didn’t realize the importance of the fashion industry to our country and New York City. “It really astounded me,” she said. “As my first report as the ranking Democrat on the Joint Economic Committee, I wanted to do it on fashion, and what I found out blew me away.”

Tech:

• Samsung Leads Mobile Phone Market, But Losing Grip: CMR: Samsung may be the leader in the burgeoning Indian mobile market, but the Korean handset giant is losing ground in one of the world's largest markets as it faces stiff competition from rivals like Micromax, Karbonn, Lava and Microsoft (Nokia). According to the latest data from CyberMedia Research (CMR), Samsung is “losing its earlier firm grip“ with its share declining to 16.5% at the end of December 2014 from 20.3% at the beginning of the year. According to the research firm's India Monthly Mobile Handsets Market Review for calendar year 2014, India mobile handsets market grew by 4% to 257 million units in terms of shipments over 2013. Of this, Samsung captured 16.5% of the shipments, followed by Micromax and Microsoft (Nokia) at 13.3% each, it added. “However, Samsung was seen to be losing its earlier firm grip on market, as its share of the market showed a downward trend during the year, as compared to Micromax that gained primarily in April-June 2014, but then continued to remain flat during the rest of the year,” CMR said in a statement. Samsung’s share of the overall market in January-March 2014 quarter stood at 20.3%, while that of Micromax was 11.2% and Microsoft (Nokia) was 17.6%. About 77 million smartphones were shipped in 2014, accounting for nearly 30% of the total mobile phone market in the country. The smartphones segment grew at 46% as against the previous year.

• Mobiliya in Talks with Army to Secure Handset Software: When the BJP was preparing for its election campaign in Maharashtra last year, the party's digital war room turned to a two-year-old startup, Mobiliya, to secure its data and communication. The BJP, wary of leaks, used the start-up to remotely lock phones, wipe entire data stacks if a phone was lost, encrypt emails, and block cameras and file transfers via Bluetooth. “Mobiliya Shoonya helped us seamlessly manage and monitor the devices of our key party co-workers,“ said Shweta Shalini, digital war room head, BJP Maharashtra. Shoonya is the startup's enterprise offering that allows clients to manage and control personal mobile phones in official establishments. Mobiliya, which has datacenters in India, is now in talks with the Indian Army to develop a rugged handset equipped with its secure software. While most cyber security firms operate at the application or app-level, Mobiliya works at the chipset and the framework level.

• Voice Price War, Rel Jio's 4G Launch may Check Rate Hikes: Mobile users don't need to fear that the upcoming spectrum auctions will push up tariffs this year, thanks to return of a voice price war and Reliance Jio Infocomm's impending 4G launch, but higher cost of airwaves post auctions may squeeze telcos' margins and drag their profits. An ET analysis reveals that for every ₹100 crore more an operator spends on buying airwaves over the reserve price its cost of hosting voice increases 0.8%-1.5% per minute, which will be built into pricing over the next three-five years. The upcoming airwaves sale, that will start on March 4, will likely increase telecom operators' costs by at least 10%, as per the ET analysis, but on recent evidence, it's unlikely that they will pass it on to consumers anytime soon. Competitive pressures on voice has already hurt revenues from the segment for leading players such as Vodafone India, Bharti Airtel and Idea Cellular over the last two quarters, say analysts. While Idea had cut voice rates in the second quarter ended September 30, 2014 -which helped it sell the most SIM cards in the October-December period -Airtel and Vodafone have been forced to keep tariffs steady to avoid losing users.

• Sistema Shyam Changes Tack, Targets Home Wi-Fi Market: Sistema Shyam Teleservices (SSTL), which provides services under the MTS India brand, is tweaking its strategy by positioning itself as a home Wi-Fi provider. The company is seeking smartphone users on GSM networks to switch to its WiFi services when at home, by offering rates that are cheaper than what GSM players typically charge for 3G data. The local unit of Russia's Sistema provides telecom service on the CDMA platform, which has fewer takers compared with GSM.The company, which has airwaves in nine of India's 22 telecom zones, is therefore focusing more on dongle-based the data services. The CDMA technology is more suited for data services. “MTS is traditionally known as a data dongle provider. The plan is to now shift focus and be recognised as a Wi-Fi solutions provider in the Indian market,“ a top company executive told ET.

• Google Testing Shopping Help via Hangouts: When it comes to shopping for Google products, some people need help deciding what to buy. Google is reportedly testing a service that would allow customers to talk Android and Chromebook choices with a salesperson straight via Hangouts. TechCrunch reports that this new feature will team up potential buyers with Google sales associates via Hangouts. According to TechCrunch, the associates will tell you all about Android and Chromebook devices but oddly, not Nest products including Dropcam and Nest Protect. You can actually try out the service by navigating to the Devices section of Google Play, clicking on the help icon and selecting Video call. Happy shopping.

• Google Maps' Newest Feature Rewards You for More Reviews: Google has long battled Yelp to be your go-to place for restaurant and business recommendations, but it just doesn’t have as large a community of reviewers as Yelp. The search company is aiming to fix that with a Maps update introducing a new Local Guides feature. Replacing the old City Experts program, it’s essentially a rewards system for Google’s most prolific reviewers. There are currently four reward tiers. Users with 5+ reviews can arrange meetups and gain access to try out new Google products before relese. Once you cross 50 reviews, your submissions will be highlighted in the Maps app with a special badge, and you’ll gain access to exclusive events. At 200+ reviews, you could be featured on Google’s official social media accounts, as well as receive an annual thank you gift from the company. Yelp, of course, offers its own similar program known as Elite Squad, but it’s more exclusive than Google’s offering – reviewers need to submit an application and are selected on a case-by-case basis. This helps assure high-quality reviews, but the openness of Google’s take makes sense given its primary goal is increasing the number of people writing reviews.