Daily News Digest- 14th Jan'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• To Reel in FDI, RBI Eases Fair Value Buyout Norm: The Reserve Bank of India (RBI) has for the Tata Group relaxed a longstanding rule that bars local companies from paying more than the `fair value' price to buy out its Japanese partner's stake in their telecom joint venture on grounds it is important to attract foreign investment, in what will be viewed as a positive signal at a time the government is trying to boost India's allure to overseas investors. The central bank has allowed the Tata Group to pay Japan's NTT DoCoMo a previously agreed price of ₹58.045 a share for the latter's 26% stake in Tata Teleservices even though it is much higher than an independently determined `fair value' price of ₹ 23.34, sources familiar with the matter have told ET.RBI has further recommended that such a stance should be taken for all similar future deals given India's need to attract foreign funds, they said. “RBI feels that in order to boost FDI (foreign direct investment) in the country, and keeping in mind recent Indo-Japanese business ties, especially in relation to FDI, the government should allow an exception to the extant provisions,“ a senior government official told ET, adding that the central bank had also advised that the gov ised that the gov ernment could apply the same principle in fu ture to all simi lar cases.

• Flipkart Plans a Year-Long Party: A fortnight after raising $700 million, Flipkart has drawn up an ambitious strategy for the year ahead, including snagging the next round of funding at a valuation of $15 billion (₹95,000 crore) and selling goods worth $5 billion by March 2016. India's largest online retailer, which raised nearly $2 billion last year alone, will also begin discussions about a US listing while scouting to buy technology-focussed startups, three people aware of the company's plans told ET. “An IPO is imminent, but a call is likely to be taken only towards the end of the year,“ said one of the sources. Flipkart is now valued at $11.25 billion and expects to sell goods worth $3 billion by the end of the financial year in March 2015. With Amazon set to compete aggressively with an investment of $2 billion in India and Snapdeal raising nearly $1 billion from Japan's SoftBank and others, Flipkart believes it has a real fight on its hands when it comes retaining its leadership in the online retail market. The market is projected by Nomura to be worth $23 billion by 2019.The India unit of the Seattlebased online retailer is fast becoming a dominant player: The company, with eight warehouses, now boasts of 18,000 registered sellers and ships goods to over 17,000 pin codes in the country . It's done this in little less than 18 months since starting operations in the country. Flipkart, with 4,000 sellers, has close to 13 warehouses and ships goods to 300 cities.

• Axe may Fall on India Jobs as Coke Begins Cost-Cut Drive: Coca-Cola India is expected to lay off 4%-5% of its workforce as part of its Atlantabased parent’s move to cut up to 1,800 jobs globally. “We are redesigning our operating model to streamline and simplify our structure and accelerate growth. This redesign work will result in impacts to jobs across our global operations including in India,” a company spokesperson said in response to ET’s query. Coca-Cola India employs about 250 people. Coca-Cola Company had last week announced plans to cut 1,600-1,800 jobs, or about 1% of its global workforce, as part of a drive to cut annual costs by $3 billion in coming years to overcome sluggish sales and pressure on profitability. The job cuts will not impact its India bottling arm Hindustan Coca-Cola Beverages, which employs over 12,000 people.

• Honda Amaze, Brio Get New Variants: Honda Cars India on Tuesday introduced a new variant of its compact sedan Amaze, priced up to Rs 8.2 lakh (ex-showroom, Delhi). The petrol variant of the sedan is priced at ₹7.32 lakh while the diesel grade is priced at ₹8.2 lakh. The company has also expanded the Brio hatchback range by adding two new variants in the lineup. The manual model is priced at ₹5.99 lakh while the automatic variant is priced at ₹6.78 lakh. “The Amaze comes with a new VX (O) grade featuring the audio-video navigation. The new grade will be positioned above the existing VX grade in manual transmission in both petrol and diesel,” Honda Cars India Ltd (HCIL) said in a statement. The Brio range has also been expanded by introducing a new VX grade with black interiors and audio-video navigation, it added.

• 60K Mobiles Sold in a Flash, But Amazon Fails Crash Test: It was Micromax vs Xiaomi on retail websites on Tuesday, with both running successful flash sales of smartphones on e-commerce sites at the same time. In terms of customer satisfaction, Xiaomi buyers not only picked up more devices but also experienced hassle-free transactions. Micromax's wholly-owned unit Yu Televentures, which introduced Yureka smartphones on Tuesday, offered and sold out 10,000 devices priced at Rs 8,999 each within three seconds on Amazon. It was a frustrating experience for most of the 300,000 registered users who flocked to the sale as the site crashed, prompting some of them to vent their ire on Twitter. Xiaomi, which introduced flash sales on Flipkart back in July 2014, sold 50,000 of its Rs 9,999priced Red Mi Note 4G ­ a direct rival to Yureka ­ two minutes and 50 seconds into the sale that started at 2 pm. Xiaomi has scaled up the number of devices offered on the website after it faced a massive consumer backlash when stocks were limited to 10,000 units in each of the first few sales. Top executives say they had greatly underestimated demand for the Mi 3, last year's flagship device. Flipkart's site had also crashed during Xiaomi's first few online sales. The Chinese smartphone maker, which is ahead of Apple and Samsung in its home market, now puts on sale 100,000 units every week. On Tuesday, Xiaomi held two flash sales -the sec Rs 5,999, ond one at 5 pm for the Red Mi 1S, priced at ` which was sold out within 11 seconds.

• Reliance Jio MD to Helm New 4G Services Sales Division: Ahead of the launch of 4G services by Mukesh Ambaniowned Reliance Jio Infocomm, the telecom firm’s managing director Sandip Das will become a consultant for sales and distribution channels of 4G devices and branding at Reliance Digital outlets. Das will mentor a newly carved division under Reliance Retail in strategy to promote sales of 4G de vices ahead of the much-awaited but delayed launch later this year. The company is yet to launch its services despite having won the spectrum in 2010, a delay attributed by many to anticipation of a better device ecosystem. A memo to the group companies by chairman Mukesh Ambani said Reliance Retail’s Jio division will draw on Das’ marketing and sales knowledge. “It will take deep conviction and substantial expertise to build such LTE device ecosystem,” the memo said.

• Flipkart Content `Objectionable' for Telangana: What does Flipkart, an ecommerce major, have in common with Iambesharam.com, Thatspersonal.com and Ohmysecrets.com? Nothing, it would seem. But all four are on a list of websites the government of Telengana wants blocked for “objectionable content“. A senior government official told ET the state government feels some websites need to be blocked to avert crimes against women as “there is a strong concern that viewing porn sites is leading to crime against women.“ “The state government has sought our help in directing various internet service providers (ISPs) to set up appropriate software tools which will block content violating the provisions of the IT Act of 2000, as amended by amendment ACT 2008,“ the official told ET. The list of ISPs include Airtel, Hathway, Idea Cellular, Reliance Communications, Tata DoCoMo, Tata Indicom and Vodafone. The country's largest e-commerce play er's name has cropped up for supposedly pro moting and sell ing alleged objec tionable products, but the names of the products couldn't be ascertained. 

• Snowman May Buy Two Startups in Food: Snowman Logistics is in advanced talks to acquire two Bengaluru-based startups specialising in chopping vegetables and assembling sandwiches and burgers before sending them off to quick service restaurants (QSR), as the cold chain warehousing company looks to expand its value-added services in the fastgrowing food space. Snowman, which went public last year, is expected to take at least a month more to close both these deals. The company refused to disclose names of these startups and the possible deal value. “These are startup guys who are doing a decent job. They are unable to scale up because of their own limitations. Snowman can get these guys and can replicate it across the country,” CEO Ravi Kannan told ET. “It is an avenue for us to enter the fruits and vegetable business. That is the whole objective of getting into this.” The two startups run their own processing centres. One of them sources, cleans and chops vegetables, while the other assembles sandwiches, burgers and buns.

• SpiceJet Told to Clear Half of Daily Bills After Jan 15: While the Airports Authority of India (AAI) has given SpiceJet another five-day breather from payment of airport charges, it wants the airline to pay at least half of the daily bill amount post January 15, this year. “We have allowed them breather till January 15, 2015, but post January 15, we want them to pay at least half their daily bills, or give us bank guarantees for the amount that is due. Their daily bill is of about ₹75 lakh and they should pay at least half of it daily,” said a senior AAI official on the condition of anonymity. The official added that SpiceJet’s dues have climbed to ₹260 crore from ₹200 crore in the past one month. This five-day extension from payment of airport charges is the fourth relief that the government has given to the low-cost carrier. The first two extensions were of 15-day each till December 31, 2014. The rest two extensions were of 10 and five days, respectively.

• Max India Heading for Three-way Split: Max India, the flagship company of New Delhi-based serial entrepreneur Analjit Singh, may be split into three divisions —insurance, healthcare and specialty films — with holding companies being created for each of them, two people familiar with the development said. These may then be listed at a later date in a bid to unlock value in the separate businesses, they said. Singh, the founding promoter of Hutchison Max (now Vodafone India), owns a 74% stake in each of two insurance ventures —Max Life Insurance and Max Bupa Health Insurance — and 46% in Max Healthcare, which runs hospitals. Max India has a market value of ₹10,676 crore. “Since the intrinsic value of the (individual divisions) is significantly higher, they will be listed separately on the Indian bourses that will have the ability to attract long-term investors, having special interest in these businesses,“ said one of the persons cited above. 

• SsangYong Launches Compact SUV, but No Plans to Bring Tivoli to India: SsangYong Motor Co, the South Korean auto maker owned by Mahindra & Mahindra, on Tuesday launched a compact SUV, its first all-new vehicle since the Indian company took over control four years ago. The Tivoli, developed with an investment of ₹9.3$320 million, is priced at $15,000-21,500 (.13.4 lakh). The company is targeting to sell 1,00,000 units of the Tivoli, with about 60,000 units marked for exports to markets like China, Europe and Latin America. There are no plans to bring the vehicle to India. SsangYong wants to take the SUV eventually to the North American market, paving way for the brand's entry into the US, a market that parent Mahindra has long been trying to enter with its SUVs and pickups. “It (the new SUV) will be a cornerstone for the company to become a global SUV maker,“ said Yoo il Lee, SsangYong's chief executive.

• Foodsites Spicing up Taste Buds of Indian Travellers: If you're travelling and yearning for some home-cooked food, you might want to check out MealTango.com.It's a website that introduces travelers to unique dining experiences with locals in farms, villages and homes in various parts of the globe. If you're on a train, you could log on to RailYatri.in or TravelKhana.com to get your favourite dish delivered at your next stop. In Hyderabad, Detours India offers tourists personalised culinary experiences, apart from organising food tours.Companies that combine the experience of travel and food are attracting investors and customers and creating niches for themselves in a growing market. Consulting firm Technopak Advisors estimates the unorganised food services market will grow to $58 billion by 2020 from $34 billion in 2013. Pune-based MealTango, launched in August 2013 by Saket Khanna and his wife Neeta Valecha, started off as an in-home dining platform for food lovers seeking authentic home-cooked meals. It has now built up a network of 150 hosts on its site in 35 cities across 13 countries. This month, it will launch MealTango Light, which offers takeaway homecooked meals.

• Offline Merchants May Soon Have Mobile Payments Option:While the online mobile payment space has been buzzing with rapidly growing players such as Paytm, Citrus Pay and PayU, another batch of startups is focusing on enabling mobile payments for offline merchants, starting with the restaurant sector. There is Ruplee, launched four months ago, which enables payments for 50 restaurants across Delhi and Gurgaon, servicing around 1,000 monthly active users. Bengaluru-based Momoe has seen 20 lakhs worth of transactions from its 25 partner restaurants since launching this past August. And then there is eightmonth-old QuikWallet, currently live in around 100 restaurants with 10,000 users across Mumbai, Delhi and Bengaluru. “Mobile payments would definitely become the 'new creed' in restaurant payment, with people getting really bored of handing over their card to get swiped,” said Jishnu Dutta, COO of Impresario, whose restaurants -including Social Offline, Smokehouse Deli, and Salt Water Cafe -have pointof-sale systems fully integrated with QuikWallet. It sees around 150-200 transactions employing the service per day nation-wide.

• AppVirality raises funds from Rajan Anandan, others: Hyderabad-based start-up AppVirality Inc. has raised an undisclosed amount from investors in the US and India. The investors include Rajan Anadan, managing director of Google India Pvt. Ltd, Ravi Gururaj, chair of Nasscom Product Council , Ashim Mehra, vice president at Baron Capital, and Mohit Saxena, co-founder of InMobi, the company said in a statement on Tuesday. AppVirality, founded in 2014 by Ram Papineni and Laxman Papineni, is planning to use the funds for further product development and hiring, it added. AppVirality’s technology solution helps mobile app developers identify and implement growth techniques without having to code. In addition, the company targets users based on factors like location and behaviour to make the timing of campaigns effective.

International:

• Sainsbury's to cut 500 support jobs in cost cut push: Sainsbury's will cut 500 jobs at its store support centres as part of its plans to cut costs. The cut represents about 13% of staff in the roles affected, the supermarket chain said. But the reduction in staff could affect more people as the supermarket abolishes some jobs and moves workers to other roles. In November, Sainsbury's said it planned to make £500m of savings in the next three years. There will be a 12-week consultation process to decide precisely which jobs will go.

• McDonald's defends 'Signs' advert from 'negative comments': McDonald's has defended its latest US advertising campaign after it "sparked commentary" from social media users saying they were exploiting tragedies. The advert shows restaurant signs with messages that have been written for community members over the years. Although some praised the company for reflecting the lives of local people, others said they shouldn't capitalise on events such as 11 September attacks. "Did we expect all this? No," said Deborah Wahl, chief marketing officer. "Good advertising creates emotion," she said. "We Remember 9 11," reads one sign. Another, saying "Boston Strong" refers to the marathon bombing which killed three people.

• Airbus 'exceeds targets' ahead of A350 take off: Airbus has said it "exceeded its targets for 2014" and beaten its rival, US aircraft giant Boeing, for numbers of orders. It comes as the first commercial flight of its new A350 airliner is due to take off later this week. Eighty of the aircraft, whose wings are made at Broughton, Flintshire, have been bought by Qatar Airways. The company added that "the best days lie ahead" for the A380, whose wings are also made in north Wales. Airbus announced on Tuesday that it had won 1,456 net orders last year, down from 1,503 in 2013 - but above Boeing's total of 1,432. It means it has enough orders on its books for its aircraft for the next nine years. However, Boeing remains ahead on the number of planes delivered - 723 aircraft compared to Airbus's 629.

• Nasty Gal Taps Sheree Waterson as CEO: Nasty Gal has named Sheree Waterson chief executive officer of the Los Angeles-based e-tailer. Founder Sophia Amoruso will become executive chair of the company, which has been expanding rapidly with its first freestanding store as well as a growing team of senior retail and operations executives. Nasty Gal opened its first storefront in November on Melrose Avenue in Los Angeles. Waterson joined the company last year as president and chief product officer after leaving Vancouver-based Lululemon Athletica Inc. She spent five years at Lululemon as chief product officer and left shortly after the company’s high-profile recall of too-sheer yoga bottoms.

• EBay Unveils Retail Platform: All About Omni: EBay is determined to make “omnichannel” more than a buzzword. After a year of testing, the e-commerce and technology giant has begun the rollout of its Retail Associate Platform — and already has DSW, Nine West and Aéropostale on board. The tablet-based software was unveiled in late 2013 and offers participating brands a number of ways to enhance their offline experience by tapping into the online world. Providing a mobile point of sale is a given. But the service also helps users measure store performance, locate inventory and access consumer databases, with specific information on purchase history and what items customers placed in their online shopping carts. The platform was built to level the playing field between associate and consumer through data, mobile technology and good, old-fashioned in-person customer service, said David Geisinger, eBay’s head of retail business strategy and innovation.

Tech:

• Idea to Replace Roaming Pacts in Delhi, Launch 3G on its Own Network in April: Idea Cellular, India’s No. 3 mobile phone company, plans to launch 3G services in Delhi on its own network in April, a top company executive said, adding that this will make it the first network in the country to use the more efficient 900 Mhz band. The Aditya Birla Group firm had won 5 MHz in the lucrative band in Delhi for ₹3,704.8 crore in February 2014. It already has 2G sites in the circle, which it is upgrading with 3G technology. The company will also set up new 3G sites, Sashi Shankar, chief marketing officer at Idea Cellular, told ET. Until now, Idea has used roaming pacts to offer 3G in Delhi. Overall, the company provides 3G services in 21 service areas of India except Orissa. While it has its own 3G network in 11 service areas, it provides high-speed broadband services in other circles through roaming arrangements with Vodafone India and Bharti Airtel. Idea has 148 million subscribers, of which over 13 million subscribers use 3G services. The mobile phone operator’s marketing strategy for the financial year beginning April will also mirror the data focus of the company. “In the next financial year, the marketing theme is going to be the same because we feel that millions of people in India still need to come online,“ Shankar said.

• Google Launches Flight Search in India: Google has finally launched its flight search tool in India, a move that has been feared by online travel aggregators for some time. The tool allows users to find and compare airfares online and book tickets directly on an airline portal or through a partner aggregator. The new feature from the search giant cuts out online travel aggregators, who provide flight information and take a cut on the tickets they sell. Google's presence in the space could reduce traffic to their portals. Goibibo, meanwhile, has partnered with Google Flight Search to display results from its own portal along with options thrown in by Google search from airline websites, when a user keys in requirements such as destination and travel date. Experts say Google Flight Search will impact online travel agents' marketing expenses, a majority of which is spent on online marketing. “This move by Google will start an on line bidding war among the online travel aggregators,“ said Aloke Bajpai, cofounder and chief executive of ixigo.com, a travel metasearch engine. Ixigo offers a similar tool that aggregates flight information and directs users to airline websites for bookings.

• Twitter in Talks to Acquire Indian Startup ZipDial: Twitter is believed to be in negotiations to buy ZipDial, a startup founded in India that has honed in on the `missed call' practice that is unique to the Indian market, reported Tech Crunch. People in India often hang up before the call is answered, using the `missed call' as a simple alert that comes free-of-cost and becomes the basis of other commercial actions. Sources said the deal is likely to be priced between $30 million and $40 million and may be announced as soon as this week. ZipDial was co-founded by Stanford-educated Valerie Wagoner (CEO), Amiya Pathak (COO), and Sanjay Swamy (chairman).

• Directi Launches Voice App Ringo: Directi has launched an app, Ringo, which allows users to make overseas calls without the Internet, Wi-Fi or carrier minutes at rates that it claims are about 70% lower than those offered by mobile phone companies and creditbased calls over Skype or Viber. The model could well disrupt India’s market for overseas calls, where an estimated $2 billion is spent annually, said Directi founder Bhavin Turakhia. The charges for making international calls through the app will be comparable to local call prices. Making a call to the US via Ringo will cost about ₹1.08 a minute, while Skype charges about ₹1.45 and telecom companies charge ₹8, the serial entrepreneur said. Once a caller downloads Ringo, which is available on Android and iOS app stores, and makes an international call, the app dials out a local call to the user in India and another local call to the overseas user and connects the two over reliable carriers.

• PlayStation Now finally available, bringing PS3 games to the PS4: PlayStation Now, the service that lets you stream games right to your console, is now available for PS4 users to download. The service is subscription based and offers a 7-day trial before starting at $20/month to play 100+ PS3 games. PlayStation now finally brings PS3 games to the PS4, which doesn’t support backward compatibility directly. Owners of the PS4 can download the app and start streaming games right now; it’s an all-you-can-eat subscription, meaning you can play as many games as you want without limitation.

• Google Domains Public Beta Launches in the US: After announcing its domain registration service last summer, today Google Domains has lifted the invitation-only access and is open to anyone in the US. Google Domains comes with a dashboard to help users maintain their website, along with Blogger integration to help sync company blog posts. The service will offer templates and a site builder price comparison tool, which includes partners like Shopify, Squarespace, Wix and Weebly. For other third-party site developers (such as WordPress), you’ll have to manually set the resource codes. With Google Domains, you’ll be able to buy and sell domains through the service, as well as create up to 100 email addresses under one domain. The service also offers to keep your registration private for no extra cost, and runs on Google’s DNS server to help your site load swiftly. Google says it is adding new generic top-level domains (gTLDs) regularly. Currently, the available options include .coffee, .academy, .company, .us and .ninja. You can find the full list of domain names here. International support for Google Domains is not currently available – to be notified, sign up for an alert from Google.

• Facebook Will Now Show AMBER Alerts in Users' News Feeds: In an effort to help locate missing children in the US, Facebook will send out AMBER Alerts on its Web and mobile apps to users in targeted areas. The alerts, issued by the National Center for Missing and Exploited Children and local or state police, include photos and details about the missing children and will show up by default on the News Feed — the first screen shown to users when they log in to Facebook. AMBER Alerts previously came through Facebook pages set up for individual states, and users had to opt in to receive notifications.