Daily News Digest- 10th Feb'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Amazon to Parade Own Fashion Labels: Amazon plans to create its own brands in the booming fashion and lifestyle segment in the country, making India perhaps the first country where the US e-commerce giant has its own private fashion labels, two people familiar with the company's plans said. Amazon India is currently building a team for its private brands and has interviewed people from leading online fashion retailers Myntra and Jabong, one of them said. The other person said the US firm has already hired a couple of people for its private brands team, but is yet to find a person to head the business. An Amazon spokesperson, in an emailed reply to ET's queries, said, “As apolicy , we don't comment on what we may or may not do in the future.“ The US online retail giant has built a sizeable business in India, but in the booming fashion and lifestyle business it's playing catch up with the likes of Myntra and Jabong, which have already fairly big operations.

• Alibaba may enter Indian e- commerce soon, Jack Ma to visit this year: Alibaba’s chairman, Jack Ma, who visited India late last year as part of a Chinese business delegation, is set to return in August or September to raise the company’s presence in the country’s e- commerce market. Senior Alibaba executives are expected to join Ma during the visit. The Chinese ecommerce company announced its investment in India’s start- up Paytm last week. Alibaba’s co- founder Peng Lei is joining the board of Paytm, the country’s largest ewallet service provider. Ma, 50, an English teacher before starting Alibaba, was in India in November when he said Alibaba wanted to invest more in the country and was inspired by Prime Minister Narendra Modi’s approach.

• CarDekho. com cruises from two laptops to a mentor in Ratan Tata: Four months ago, the Jain brothers of Jaipur, Amit and Anurag, set their hearts on getting Tata Sons Chairman Emeritus Ratan Tata on board as an advisor for their six- year- old online automobile portal, CarDekho. com. Tata’s understanding of the automobile sector and his credibility in the business world made him the best mentor. The idea to set up CarDekho. com was inspired by a visit to the Automobile Expo in Delhi. The portal was launched in 2008. Starting from a one- room set- up with just two laptops, it has reached a valuation of $300 million today. On Friday, the duo was in Mumbai to sign an undisclosed amount of investment from Tata, who didn’t agree to a board position on CarDekho. com, but “ promised” he would be available to speak to the Jains at least an hour a month and guide them. “We did not need money at this juncture but we wanted Tata as our mentor. So, once we decided this, we got in touch with our investor Sequoia Capital, who got us in touch with Tata’s team,” Amit Jain told Business Standard. “ So far, I have met him twice and his composure, humility and the knowledge he carries are what impressed me the most.” This unusual approach to finding an investor is not the first such move for the Jains. In 2007, after nearly eight years of working with Texas- based Trilogy, Amit Jain, a graduate from Indian Institute of Technology ( IIT) Delhi, abruptly quit his job and returned to Jaipur. He dabbled in his father’s gemstone business for some time after the latter’s death. “Once on ground, I realised it was so easy to advise my father about business strategies from an academic point of view. The devil lies in the detail,” he says.

• Jabong announces line-up for Jabong Online Fashion Week: The second season of Jabong Online Fashion Week (JOFW), a young talent-based showcase that serves as a platform to highlight new names from fashion design and related industries, is set to take place from Feb 11 to 17, 2015. The shop-able event will feature Spring/Summer creations from a selection of emerging designers who have been judged and picked on the basis of quality, innovation, marketability, originality and ability to legitimately take fashion to the next level. The selected names are Flirtatious by Aakriti Grover, Abhi Singh, Aesthetical Cubes, Jaya Misra, Jayati Goenka, Kanika Goyal, Lalit Sengar, Niharika Pandey, Niket Mishra, Poonam Bhagat, Preeti S Kapoor, Rahul Singh, Siddhartha Tytler, Sonia Jetleey, Sougat Paul and Nitya Bajaj.

• Malaysia Tourist Arrivals Up Nearly 10% in 2014: After a challenging year with two mishaps involving its national carrier, Malaysia has some good news to report for 2014, with inbound tourists growing 9.6% to 22.8 million from 20.8 million in the previous year. India, the sixth most important tourist market for Malaysia, also contributed to the growth in tourism, with the number of tourists to the country going up to 6.4 lakh from 5.3 lakh in 2013. The number of Chinese tourists to Malaysia, however, declined in 2014. Tourism Malaysia's deputy director general Dato' Haji Azizan Noordin told ET that the country changed its strategy after flight MH370 disappeared with 239 people on board in March last year.In July, flight MH17 was shot down over eastern Ukraine with 298 people on board. “Naturally, there was a direct impact from travellers from China. But to make up for that, we had a look at other potential markets. This year, we are expecting eight lakh Indian arrivals,“ said Dato' Azizan. “Unlike a few years ago, Indians are travelling throughout the year now and that makes India a strong outbound tourist market for short-haul neighbour destinations,“ he added.

• Your McDonald's Burger Just Lost Some Weight: McDonald's Indian menu is shedding some weight. The world's biggest restaurant chain has cut almost 50-60 calories on an average from all its burgers, about 40% of the fat content in sauces and roughly 20% sodium in fries in an effort to steer Indian consumers to lowercalorie choices. However, even with the bulk of its products now containing 810% fewer calories, it still doesn't fit into the `healthy meal' option. McDonald's Indian arm doesn't deny that and claims it is only trying to appeal to a larger consumer base and not appeasing extremely healthconscious customers. “This is also to make McDonald's a better option for consumers. You have to meet the needs of consumers. If consumers are going in this (health) direction, I can't stick to the opposite direction,“ said Amit Jatia, vice-chairman of Westlife Development, the operator of over 200 McDonald's and 30 McCafe outlets across western and southern India. With a common supply chain and product development team for McDonald's outlets across the country , the lower-calorie merchandise is also available in north and eastern India.

• Jet Airways delays Dreamliner take off: In a sign of further deferment of its $ 2.6- billion order for 10 Boeing 787- 9 Dreamliners, Jet Airways told investors in a post- earnings call on Monday that the fullservice airline has nothing on its order book till around 201718. The airline’s current focus is on increasing aircraft utilisation, cost cutting through contract re- negotiations and process improvements, and making existing routes profitable. “We are right now looking at more or less a flat fleet. We do have some lease expiries coming up, which we are looking to either extend or replace, but broadly, we are not looking at any substantial growth in our fleet. ( We have nothing) in the order book for the next two to three years,” Abhijit Dasgupta, vice- president (planning and alliances), said. Cramer Ball, chief executive officer, added, “ There is still an intense focus within our business on continuing efficiency, network rationalisation, productivity improvement as well as quality improvement.” Jet has 117 aircraft, including 10 under subsidiary JetLite. The development comes as asurprise because Jet, which placed the Dreamliner order in 2006, was expected to take deliveries from 2016. This itself was a deferment from the first delivery target of 2015 because it had converted initial orders for the B787- 8 version to the larger B787- 9 version, with longer range and more capacity —280 passengers in a threeclass configuration versus 240 for the B787- 8. The B787- 9, which at list prices is $ 257 million, was expected to bolster its international routes, especially for direct flights to North America.

• MeraEvents Promoter looks to Raise $10 m for Expansion: Versant Online Solutions, promoter of online events ticketing and solutions platform MeraEvents, is in the market to raise $10 million to power its global expansion and build a marketplace for events related service providers. The firm has mandated Bengalurubased investment advisory firm Khetal Advisors to advise it on fundraising and expects to close the round in 3-6 months. As part of its global push, the company plans to set up sales offices and teams in London, Dubai and Singapore. It has also started work on two separate portals that will serve as marketplaces for venues and service providers who cater to events. The first is expected to launch in a month. The marketplaces will see the firm grow its headcount to 110 from 60. “We've spent most of the past year laying the groundwork for the services marketplace and going glob al. The aim is to create an eco system of solu tions that goes well beyond ticketing,“ Me raEvents foun der and CEO aidu Darapaneni Chennapa Naidu Darapaneni told ET. He expects the company's GMV (gross merchandise value) to hit ₹100 crore (about $16 million) by December from . 15 crore now on the back of ` these expansion plans.

• CarTrade.com Latest Auto Classifieds Co to Get Funds: The automobile classifieds segment is being identified as the next billion-dollar opportunity by risk capital, as marquee investors rush to pour capital in the stillnascent space that is being seen as a harbinger of India's growing consumer internet story. Mumbai-based online auto classifieds platform CarTrade.com has raised an undisclosed amount from Chip Perry , former founding chief executive of Auto Trader, the largest online auto classifieds company in the US, believed to be valued at $7-8 billion. In October, CarTrade had raised $30 million (about . 180 crore) in a round led by PE ` major Warburg Pincus. The news of CarTrade's latest funding comes a day after Ratan Tata, chairman emeritus of the $100 billion Tata Group, invested an undisclosed amount in GirnarSoft, which owns and operates CarDekho.com. Perry and Tata's investments, which have been made in their personal capacity , are the latest examples of global investors making a beeline for the sector.

• Voda Elevates Naveen Chopra to COO's Post: Vodafone India has promoted enterprise services head Naveen Chopra to the role of chief operating officer, effective April 1. Chopra, director at Vodafone Business Services (VBS), will succeed Sunil Sood as COO at the Indian unit of Vodafone Group Plc, the country's No. 2 operator said in a statement issued Monday. The development comes on the heels of a previous announcement of Sood succeeding Marten Pieters as the telco's managing director and chief executive officer, also with effect from April 1. Chopra joined Vodafone in 2004 as vice president, corporate marketing, and over the last 10 years has served in various roles, including chief marketing officer.

• Star, Advertisers Clash like India & Pak on Ad Rates: Diehard cricket fans will remember the memorable IndiaPakistan battles of the past World Cups. The tense standoff in Bangalore in 1996 when Ajay Jadeja went on a rampage and Venkatesh Prasad showed Aamir Sohail the way to the pavilion after sending his stumps clattering; that glorious Saturday seven years later in Centurion Park when fiery Shoaib Akhtar's missiles were smacked by Sachin Tendulkar to all parts of the stadium, in the process delivering a huge win for India and a big confidence boost after a demoralising loss to Australia early in the tournament. This World Cup, the old enemies meet again. Not in the final as many fans would hope for or in the semi-finals like in 2011, but in the opening league match on February 15. Well ahead of that epic India-Pakistan encounter, a different kind of a battle is being fought behind the scenes. On one side are the advertisers who want to exploit the big viewership numbers that this match promises to deliver, and sitting tight on the other is Star India, the official broadcaster, who wants to milk the match by jacking up the advertising rates. More than 70 brands, including some regional brands and firsttime advertisers, have booked slots for the game, which is 50% more than the count for 2011 World Cup final, said a spokesman for Star India. At ₹25 lakh per 10 seconds, this is going to be the most expensive advertising opportunity ever in cricket, but one that not many advertisers would want to miss. The match will see Amitabh Bachchan making his debut as commentator.

• Mangrove Brings $250 M for E-comm, Telecom Space: Mangrove Capital Partners has come knocking with a $200-250 million corpus to invest in India's e-commerce, internet and telecom startups, a partner Michael Jackson at the Luxembourg based venture capital fund said. “India is going to be a fantastic market for us because there will be millions of people getting on the internet. Second, only local technology and local solutions can resolve local problems,“ Michael Jackson told ET. The venture capital fund will look at investing in companies that offer disruptive models in the e-commerce and telecom space, for an investment period of five to 10 years, he added. Mangrove has already invested $5-10 million in Store King, which offers e-commerce platform to retail stores that double up as grocery stores in the tier-3 and lower towns in Karnataka, Tamil Nadu, Andhra Pradesh and Kerala.

International:

• Rebecca Minkoff to Open Chicago Store: Rebecca Minkoff will unveil her first store in Chicago this fall a 1,310-square-foot flagship at 106 East Oak Street. It will be the designer’s fourth U.S. store following a unit in Los Angeles that is under construction and existing stores in SoHo and San Francisco. The company plans to open two to three stores a year for the next four to five years, but the schedule could be accelerated, said Uri Minkoff, the company’s chief executive officer and brother of the designer. “We focused on Chicago because, on a wholesale basis, it’s consistently among our top three cities in terms of sales volume,” Minkoff said. “It’s the capital of the Midwest, and there are a lot of universities there.” The Minkoffs also took notice of a McKinsey & Co. report that listed Chicago among the 25 cities that will be global luxury capitals by 2025.

• Moschino Signs SoHo Lease: Moschino has just signed a lease to open a new store at 73 Wooster Street in New York’s SoHo neighborhood. The space, which measures about 3,700 square feet, was originally built in 1929 as a four-story garage. The new retail concept was developed by Jeremy Scott, Moschino’s creative director, and is similar to the store that was recently opened on Beverly Boulevard in West Hollywood, Calif. The planned opening for the SoHo store is this spring.

• Canada’s Maska Mode Eyes U.S. Expansion: After spending 14 years refining its upscale fast-fashion business, Montreal’s Maska Mode is venturing into the volatile U.S. market in 2015. The privately owned, family-run retailer — which currently operates 25 stores across Canada — will make its first foray into the U.S. via Boston, New York and Chicago. Launches are expected as early as the first half of 2015 and will roll out as the company continues its expansion into Western Canada, where Maska Mode opened its first boutiques in Vancouver and Calgary in November 2014. “We have yet to determine how many stores we will launch in the U.S. or when, precisely. But this company is incredibly agile,” co-owner Rebecca Cohen said. “Our strategy, as always, is to open fewer locations in great cities and do that in upscale little neighborhoods. That approach has served us very well in Canada.”

• Wet Seal's Fate: March 10 a Key Date: The Wet Seal Inc.’s fate — whether with B. Riley or a different owner — probably will be determined by mid-March. The Delaware bankruptcy court will likely hold an auction of the retail chain’s assets on or around March 10. Wet Seal filed a voluntary petition for Chapter 11 bankruptcy court protection on Jan. 16. At the time, the teen chain said it planned to exit from bankruptcy as a reorganized chain of just 173 stores — the company closed 338 stores on Jan. 7 shortly before it filed its petition — and its Internet business. The chain inked a deal with B. Riley Financial Inc., the parent of asset disposition firm Great American Group, for a $20 million debtor-in-possession financing facility. In exchange, and as part of the reorganization, the $20 million would convert into newly issued common stock of the restructured company and B. Riley would hold an 80 percent stake in the reorganized firm. The balance of the equity would be owned by certain creditors holding generally allowed unsecured claims left unsatisfied in the bankruptcy.

• M1, L Capital Asia Take Controlling Stake in Pepe: Lebanese investment firm M1 Group and L Capital Asia have acquired a majority stake in Pepe Jeans Group from Torreal SA, Artá Capital and L Capital Europe in a transaction that’s expected to bolster its presence in Asia, the U.S. and other underdeveloped markets. The company’s Barcelona-based management team, headed by chief executive officer Carlos Ortega, will remain in place. The group, along with “other shareholders close to management, will reinvest alongside M1 Fashion and L Capital Asia,” the company said. The distribution of ownership among the principals and other details of the transactions weren’t disclosed. Morgan Stanley had been pursuing buyers for the jeanswear brand, founded in London in 1973, since last year and hoped to generate about 700 million euros, or about $810 million at current exchange, in sale proceeds, according to published reports.

• Downgrade Hits Abercrombie, Stock Skids: Shares of Abercrombie & Fitch Co. led the fashion industry lower today after Wunderlich Securities analyst Eric Beder downgraded the company to “sell” from "hold." Abercrombie’s stock fell 6.5 percent to $24.11, the worst performance among the 100 stocks in the WWD Global Stock Tracker, which declined 0.9 percent to 110.41. “Both Abercrombie and Hollister have been unable to retain any pricing power as they switch away from logo-driven product, despite material cost cutting and store pruning,” Beder said. The analyst said Abercrombie’s average unit retail price was off 25.9 percent this month versus a year ago, while Hollister is off 22 percent.

Tech:

• US-based Lowe's to Launch Innovation Centre in Bengaluru: Lowe's, the second-largest US home improvement retailer, is making India its global technology war front as it looks to fight against larger rival Home Depot with the help of futuristic technologies. Today, the $50-billion company's chairman and CEO Robert Niblock will launch Lowe's first technology innovation centre outside the US at Bengaluru where the team will work on areas such as data analytics, mobile applications, payment technologies and on ensuring that all of their technologies are highly secured. Lowe's expects to spend approximately $350Mn in their annual IT capital expenditures, including Omni-Channel capabilities. “We met with other retailers, asked them to explain how they were working on newage technology, and many of them pointed us to the global innovation centres they have in place in India,“ Niblock told ET in an exclusive interaction.

• Facebook to Launch Free Net Mobile App for RCOM Users: Facebook is set to launch internet.org, an initiative to provide internet access to those who don't have it, in India through a tie-up with Reliance Communications, two people familiar with the development said. The social media giant and India's fourth largest mobile operator have called a joint press conference in Mumbai on Tuesday for, what the invite says, “one launch that will make a billion dreams take off “. The people quoted above said it's for the launch of internet.org mobile application exclusively for Reliance Communications (RCom) users, providing basic internet services in categories such as health, education, communication, jobs and local information free of cost. The companies declined to comment. The Anil Ambani owned company, which has around 60 million subscribers who don't use data services, is hopeful that many such customers will opt for da ta services once intro duced to the internet through the free-of-charge experience.

• OnePlus One to be sold without invite in India on February 10: If the only thing that's holding you back from buying a OnePlus One is an invite then there's some good news for you. The value-for-money, premium smartphone will be available without an invite to all consumers on February 10. Amazon.in, the online marketplace which exclusively sells the phone has announced open sale of OnePlus One phones in India on its marketplace starting 10am on February 10, 2015 to mark the successful completion of 10 weeks of OnePlus in India. Consumers will not require any invite to purchase the OnePlus One smartphone during the sale. The phone is otherwise sold only to consumers who have an invite to buy the phone. Invites are distributed via social media and through consumers who buy the phone.

• Qualcomm to pay record $975m in China antitrust case: US chipmaker Qualcomm will pay $975m (£640m) to Chinese authorities to end a 14 month anti-trust investigation into its patent licensing practices. The fine is the largest in China's corporate history and will require the firm to lower royalty rates on patents used in China's mobile phone market. The move could help Chinese smartphone makers Xiaomi and Huawei. Qualcomm said on Monday it would not contest the ruling that it violated China's anti-monopoly law. "Although Qualcomm is disappointed with the results of the investigation, it is pleased that the NDRC (National Development and Reform Commission) has reviewed and approved the company's rectification plan," the tech giant said in a statement on Monday.

• Netflix launches in Cuba as diplomatic relations thaw: Internet movie and television streaming service Netflix has launched in Cuba, as diplomatic relations between the US and Cuba continue to thaw. Netflix said its content, such as series House of Cards and Orange is the New Black, will be available to anyone with international payment cards. On 15 January, the US announced new rules that ease long-running sanctions against Cuba. A trade embargo has been in place since 1962. US credit card firms MasterCard and American Express have both said they will launch operations in Cuba soon. Last month, Netflix said its international expansion was proceeding ahead of schedule. The company said it plans to expand to 200 countries in the next two years, and to earn "material profits" from its operations overseas by 2017.