Daily News Digest- 13th Feb'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Google Brings in PE Subsidiary to Capitalise on Indian Startup Boom: Google is setting up its growth capital arm in India to double down on startup investing as it turns bullish on fast-growing local emerging companies that have drawn attention from big investors across the world. Google Capital will hire a team and invest in growth-stage companies in India, a market in which investors ranging from Japanese communications group SoftBank to Chinese ecommerce giant Alibaba have recently made big bets. “It made a lot of sense to focus a lot of attention here now,“ David Lawee, partner at Google Capital told ET in an exclusive interview. In the next 3-7 years, nearly 30% of the world's billion-dollar companies will be from India, Lawee predicted. India's startup ecosystem has become increasingly attractive for a spectrum of investors from large hedge funds to corporate venture capital arms as compa nies such as Flipkart and Paytm notch up hundreds of millions of dollars in funding at multi-billion-dollar valuations.Eight-year-old Flipkart was valued at (₹67,000 crore) in its latest over $11 billion funding round last year while China's Alibaba has earmarked Alibaba has earmarked $575 million to invest in four-year-old mobile commerce player Paytm.

• Bitten by the Fashion Bug, Birlas Plan E-tail Venture: The Aditya Birla Group is set to launch an online fashion retail venture selling apparel, footwear and accessories, taking on existing players such as Jabong and Myntra and highlighting the growing appetite among India's cash-rich conglomerates to enter sunrise businesses. The fashion venture, it seems, is a prelude to the group's bigger plans for the e-commerce sector. “Fashion e-tailing will be the group's launch pad into the e-commerce space, which offers multiple opportunities,“ said a person familiar with the plan. The $40-billion group is putting together an e-commerce team headed by former Mckinsey executive Prashant Gupta. Gupta, who joined the Group in 2010, was given the task of evaluating opportunities in the e-commerce space early last year. The basic structure for the new portal and its branding will be ready in another six weeks. “We are evaluating several options for branding,“ said the person. The Group is already into fashion business through Madura Fashion & Lifestyle, which sells brands such as Louis Philippe, Van Heusen, Allen Solly, Peter England and People. The new online venture will be independent of this brick-and mortar business.

• Shoppers Stop May Soon Give Home Delivery to Cut Queues: India's largest department store Shoppers Stop has piloted a special queue-busting service this end-of-season sale season at select stores, wherein shoppers can fill their shopping bags and drop them off with their address details at a dedicated zone. They can pay for it when the retailer delivers the products at their doorstep. “During sale, a lot of people get tired and drop the bag,“ said Govind Shrikhande, managing director at Shoppers Stop. “In a normal situation, drop off bags account for just 1% but during sale, it can go up to 4%-6%. While the queues are longer, there are more items in the bags too. So, if we are able to recover even half those bags, it's a great addition to our sales,“ he said. Shoppers Stop also plans to offer Wi-Fi in its outlets to help customers navigate the stores, find brands and offers and shop online from the store itself, as part of its efforts to woo customers to its shops at a time when more and more Indians are taking to online shopping.

• Titan in Advanced Talks to Buy 15% Stake in CaratLane: Tata Group company Titan is in advanced negotiations to invest about $30 million (₹187 crore) in online jewellery retailer CaratLane for a 15% equity stake, according to top sources privy to the transaction. The deal, likely to be signed in a few weeks, will peg CaratLane's valuation at about ₹1,200 crore. CaratLane was last valued at ₹750 crore in October 2014, when Tiger Global invested $31 million in it, a source in the investor community said.“We are in the process of closing round D for which we are in talks with an Indian conglomerate, among others,“ CaratLane founder Mithun Sacheti said, declining to elaborate further. “Titan has its own website where it sells products across all categories. We are not otherwise doing anything else now and will not otherwise comment on market speculation,“ Titan's chief financial officer, Subramaniam S, said in response to ET's email query .

• Future Retail May Sell Stake in Logistics Arm to Raise Rs 700 cr: Retail baron Kishore Biyani's Future Retail plans to raise about Rs 700 crore by selling some stake in its logistics arm Future Supply Chain Solution possibly through an initial public offering later this year. The firm's board of directors approved divesting a part of its stake in the subsidiary through IPO or other modes, the operator of Big Bazaar and Food Bazaar chains said on Thursday. The stake sale will help trim BSElisted Future Retail's interest cost by Rs 150-200 crore and fund expansion of the business, it said. The company currently has outstanding debt of around Rs 4,000-4,500 crore. Kishore Biyani, chief executive of Future Group, said Future Retail owns about 70% stake in the logistics arm. “Future Retail will sell some of stake in Future Supply Chain,“ he told ET.

• SpiceJet to Shed Flab at Management Level: Troubled low-cost airline SpiceJet, under its new promoter Ajay Singh, is working to sharply reduce the number of vice presidents to five from 20 as it seeks to rationalise staff. “The new management sees a lot of excess at the top level and is looking at ways to cut it down. In the toplevel management, we may see a huge cut in the number of vice presidents to five. The management is still working out ways to make that happen,“ said a senior executive, who did not wish to be identified. The executive said that at the same time a large number of exec utives who shifted from the airline to other carriers are likely to be brought back. “Discussions are being held with a lot of executives who were part of SpiceJet during Ajay Singh's earlier stint. Many of them may come back and a few of them are also supporting the airline in more ways than one,“ he said. With the change of guard, a number of positions created by the earlier promoters are being viewed as unnecessary in an airline company, the executive said.

• Flipkart Eyes Sales Worth $8 B This Year: Homegrown online marketplace Flipkart is eyeing sales worth $8 billion (about ₹50,000 crore) in 2015 in terms of total value of goods sold, more than double of $3 billion clocked last year. Increasing Internet penetration and online shopping by youngsters helped the e-commerce firm hit a gross merchandise value (GMV) of $1 billion in March 2014. The Bengaluru-headquartered firm is also targeting to add 100,000 sellers on its platform this year and expects to sell 25 million units (products) per month during the same period, people in know of the development told PTI. “Flipkart has set a target to reach $8 billion in GMV in 2015 and add 100,000 sellers on its platform. It also expects to sell about 25 million products per month by the end of this year,” they added. When contacted, a Flipkart spokesperson said: “We will not be able to comment on this information.” Sources also said Flipkart has set a target of selling one billion goods on this platform annually by 2017-end.

• Ecommerce New Driver for BPO Firms as Demand, Prices Improve: Business process outsourcing companies are once again optimistic about the domestic market, as a new breed of customers including ecommerce firms and existing clients raise spending on customer service. Over the past few years, a slew of BPO companies bowed out of the Indian market as their largest customers ­ telecom firms ­ pushed for lower rates that decimated margins.Outsourcers such as FirstSource and Hinduja Global Solutions exited unprofitable deals and others such as Serco and Concentrix because cautious in signing new deals. Now, the rapid rise of e-commerce firms and some new government projects such as Aadhar and the Jan Dhan Yojana financial inclusion scheme have boosted the need for call centre services. Besides, telcos, too, are willing to pay more for improved services for premium customers.

• Amazon Signs On as Fashion Week Sponsor: Amazon is stepping up its fashion activities worldwide, signing on as the new sponsor of the twice-yearly fashion weeks here. Amazon replaces Indian retailer Wills Lifestyle, which has sponsored the New Delhi fashion shows for nine years. Beginning with the 25th edition starting March 25, the shows will be re-branded Amazon India Fashion Week. It is the second major fashion week sponsorship deal Amazon has signed this month. Last week, the e-commerce giant revealed the group and its fashion sites — Amazon Fashion, East Dane and MyHabit — were becoming the presenting sponsor of New York Fashion Week: Men’s, the first edition of which will be held in July 13 to 16.

• Intel Bets on Women-owned Startups, Internet of Things: Semiconductor giant Intel is looking at investing in women owned startups in India as a part of global program to increase diversity in the technology business.“We are also looking at investing in women owned startups, which is something we haven't done before.We will be doing this worldwide,“ Intel President Renee James, told ET in an exclusive interview in New Delhi last week. James, who was on her maiden visit to India, also met Prime Minister Narendra Modi with whom she discussed the government's Digital India initiative and “what Intel could do for it.“ In January , Intel had committed to spend $300 million to increase workforce diversity .James is spearheading the initiative within Intel. (Read James' exclusive interview in today's Corporate Dossier) In India, Intel is already engaging with women owned businesses.Last year, Intel India had hosted its first ever Supplier Connect Conference for women at its campus in Bangalore. “This conference was to connect women owned businesses with Intel internal end users buyers and explore potential opportunities to work with Intel directly or through Tier 1 suppliers,“ Debjani Ghosh, MD, Intel, South Asia.

• TABcab in talks to raise ₹ 600 cr for expansion: TABcab, the largest taxi operator in Mumbai, has finally entered the deal market. TABcab is in discussions with private equity ( PE) investors for raising $ 100 million (₹ 600 crore) by diluting aminority stake. According to people in the know, TABcab will use the funds for expansion into Delhi and Chennai, where it is in discussions to acquire a leading taxi operator. Buyout talks with the Chennai- based operator were in initial stages, sources said. Though other taxi operators and aggregators like Meru Cabs, Ola Cabs, Easy Cabs, Mega Cabs and Taxiforsure have raised funds from PE firms, TABcab, which runs 2,800 taxis in Mumbai, has never raised money from private investors. Among radio cabs, TABcab is the largest operator in Mumbai today, with a five per cent market share. TABcab is run by SMS Taxi Cabs, a subsidiary of SMS Infrastructure, an infrastructure group promoted by Nagpurbased Sancheti family.

• Amazon to take on rivals by launching its own fashion label: Leveraging the power of technology, the popular US e-tailer giant Amazon is planning to create its niche in the ever-growing lifestyle segment in the country. With this, India will become the first country where Amazon will have its own private fashion labels in order providing unique clothing experiences to its customers, states The Economic Times report. The ET report further revealed, one of them stated that to execute its plans, Amazon India is currently forming a team for its private brands. And in order to steer its ship in the fashion arena, it's planning to hire experienced people onboard. Therefore, the US-based firm has also interviewed people from other known fashion e-tailers like Myntra and Jabong, the leading news daily said.

International:

• Nike CFO Donald Blair Sets Retirement: Donald Blair, chief financial officer of Nike Inc. since 1999, plans to retire on July 31. Andrew Campion, currently senior vice president of finance, strategy and investor relations for the firm, will succeed him as cfo. Blair will serve as cfo through July and remain with the company through October to aid in the management transition. The company noted that, during Blair’s tenure as cfo, “revenue has more than tripled, earnings per share have increased six-fold and the company’s market value has increased over eight times, delivering top-quartile total shareholder return of 16 percent per year.”

• Macy’s Still Battling Old Department Store Foes: Macy’s might have won the decades-long battle to become the dominant department store nameplate, but its old rivals — from Marshall Field’s to Strawbridges to I. Magnin — keep popping up for a fresh challenge. After the Federated-May Co. merger a decade ago, the renamed Macy’s Inc. converted the patchwork of chains to the Macy’s banner. While that might have been the end for the names, Ellia Kassoff, president and chief executive officer of Strategic Marks, moved to claim ownership of the trademarks and started using them on his Web site, retrodepartmentstores.com, which sells T shirts bearing the brand names. He said that trademarks reenter the public domain and are up for grabs once they’re not used for three years.

• Plac to Enter U.S. Retail Market: In its home country of South Korea, Plac is a big deal. But in the U.S., it’s essentially unknown. The brand is hoping to change that by hosting its first men’s wear show during New York Fashion Week and opening a store in New York City this summer. In an interview with chief executive officer Jeong Wook Choi prior to Plac’s show here on Wednesday, he said since its founding in 2009 as a denim brand, Plac has grown to become a complete lifestyle line with more than $42 million in sales and 75 of its own stores in South Korea. Although it offers women’s wear in Korea as well, Plac decided to concentrate on men’s wear only for its U.S. launch.

• L’Oréal Cranks Business in Q4: L’Oréal cranked up its business in the fourth quarter, when comparable-sales gains outpaced financial analysts’ expectations. The French beauty giant said Thursday that like-for-like revenues in the three months ended Dec. 31 increased 4.9 percent to 5.97 billion euros, or $7.46 billion, bolstered by business in its Luxe and Active Cosmetics divisions. In reported terms, sales advanced 8.5 percent. UBS analyst Eva Quiroga called the quarterly results “a clean beat” in a note. “L’Oréal reported a solid finish to the year with like-for-like growth in the fourth quarter well ahead of expectations [UBS’ forecast had sales up 3.1 percent and the consensus estimate was up 3.6 percent],” she wrote.

• Apple bans 'bonded servitude' for factory workers: Apple has banned the practice of bonded labour - where new recruits are charged a fee - from its factories. In its latest audit of factory conditions, the iPhone maker said that any such fee must be paid by its supplier and not the employee. Apple began the audits following criticism of the working conditions in some of its factories. It comes as a report from labour rights group China Labor Watch questioned the low wages earned by some Apple workers.

Tech:

• Apple's App Store now Highlights Games Without Paid DLC: Freemium games are bittersweet. Sure, you get to start playing for free, but if you want to do well at all or gain extra features, chances are you’ll have to spend money on upgrades or extras. That can be annoying, and it seems Apple thinks so too; MacStories spotted a new game category that highlights “Pay Once & Play” content. Basically, these are games that come without any extra purchases or DLC, just like the good old days. It’s a welcome move; while DLC can add longevity to a title, excessively incorporating it can also be deceptive to users who expect to pay a certain amount of money for a title. The change is currently only visible in the UK app store, but we wouldn’t be surprised to see it in other regions soon.

• Xiaomi is Launching Mi.com in US but not for Phones: At today’s Xiaomi press event in San Francisco, there was a lot of recap of the company’s current status and products. Nothing really new, until vice president of international of Xiaomi, Hugo Barra dropped some information about the company entering the US market via Mi.com in a few months. While the Mi line of phones is huge in China, you can’t actually get one of those phones in the United States. Today’s news about Mi.com won’t change that; the direct channel to Xiaomi’s products in the US will be for wearables, headphones and battery packs. Barra told the assembled press, “The amount of effort required to bring those products to the market is an incredible amount of work. We’re accelerating our entering by bringing simpler products.” While the news of Xiaomi entering the US and other markets is less exciting than hoped, it does mean that if the company is able to grab mind share in the states, in the future you might be able to get a Mi Note.

• Windows 10 for Phones Now Available to Try on Some Devices: Just as promised, Microsoft has made its preview for the phone version of Windows 10 available. In order to try it out, you’ll have to install the Windows Insider app (and sign up for the Insider Program, if you haven’t already). Also, this is the first Windows 10 preview (desktop included) to show off the upcoming Project Spartan browser engine. The technology is currently hosted in Internet Explorer, but expect a new browser to replace IE in future builds. There are some caveats; new versions of Office, Mail and Calendar apps are coming in later builds, and the updated Cortana assistant is only available in English and in the US. You’ll also need one of six compatible Windows Phone devices: the Lumia 630, 635, 636, 638, 730 or 830.

• Twitter is Testing Different Multi-Photo Layouts in Tweets: Twitter is apparently testing a new way of displaying multiple images in a tweet. We’ve tested the feature on Twitter.com and the iOS app and found that both will upload in a mosaic format. Twitter confirmed to us that it is testing different multi-photo layouts, so your mosaics may not always look the same. Hopefully, the test means the multi-photo format will soon support GIFs, Vines, and videos, or mixed media in one tweet. The update appears to come after Twitter rolled out a new swipe gesture to dismiss lightbox photos yesterday.

• Apple Now Lets You Test Groups Separately in TestFlight: Apple purchased Burstly last summer, and got the TestFlight beta-testing tool with it. Now it’s starting to add new features to the tool. Starting today, developers can organize their testers into separate groups to easily A/B test changes among them. Developers can choose to quickly send separate builds, provide different instructions, or apply actions to several testers at once with the new update. Testflight announced it would be closing its old TestFllightApp.com website on February 26th; developers should set up their apps for iTunes Connect if they still want to use the service.