Daily News Digest- 22nd Jan'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• India, US to Untie Transfer Pricing Knot: India and the US have finalised a framework to resolve transfer pricing cases, some of them pending for five years, in what could end tax trauma for more than 50 American MNCs such as Microsoft, IBM and Oracle by the fiscal year-end and send a strong signal to overseas investors that the Modi government is indeed committed to a non-adversarial tax regime. With President Barack Obama arriving in a few days, officials of the two countries are trying to hammer out agree ments on various pending issues. Under the transfer pricing deal, both sides have also agreed to respect bilateral advance pricing arrangements. Bilateral advance pricing arrangements (APAs) would allow American companies to ascertain their tax liability in India beforehand, said a government official aware of the development. Tax authorities will be able to resolve as many i as 50 of the nearly 200 pending cases before the t end of the financial year. This could save companies thousands of crores of rupees in tax claims.

• Fast-Growing Zomato to Tank up on $80 m: Online restaurant listing guide Zomato is likely to raise fresh funding of up to $80 million (₹490 crore) as it aims to recruit more people and expand business in two continents, including in the US where it will battle the might of Yelp, one of the world's largest restaurant listing guides. The fresh infusion of capital from both new and existing investors will top up the $60 million (₹370 crore) received by the Gurgaon-based company -from majority owner Info Edge, Sequoia Capital and Vy Capital in November -and could be used to increase field staff in specific American cities and boost marketing spend in Australia ahead of the cricket World Cup starting in February. “The company needs another round of funding,“ said Deepin der Goyal, the founder and chief executive officer of Zomato, in a conference call with analysts on Wednesday . He did not specify the exact amount or when his company expects to raise the money. Founder Deepinder Goyal said Zomato will “not focus on new acquisitions in the next six to nine months“. Earlier this month, Zomato bought Seattle-based UrbanSpoon, paying $52 million in an all-cash deal. 

• Luxury Brands Now Play to Art Galleries to Bond with the Rich: Sellers of luxury products and services are increasingly using art as a platform to connect with their target buyers. From wealth managers and diamond merchants to luxury carmakers and even insurers, companies are associating with art fairs, exhibitions and galleries to get access to the rich who invest in art. “Businesses today are looking at interesting ways to reach out to quality audience,“ said Sanjay Sharma, India head at global auction house Christie's. German luxury carmaker BMW, for example, will provide some 40 high-end cars for pick and drop service for art collectors during the annual India Art Fair in the capital later this month. These collectors are people with money and a taste for good things in life -clearly potential candidates for super luxury cars. Multinational insurance company AIG recently sponsored an Art Week event in Mumbai. “India is a growing market for us and we are looking to reach out to new clients by participating in art events,“ said Ronald Fiamma, global head of private collections at AIG.

• Jewellers Turn to Franchisees to Reach Out to More Buyers: Branded jewellers are looking at the franchisee route to expand their retail footprint, a strategic turn prompted by the volatility in gold prices and erosion of margins over the past two years. Rajesh Exports, Gitanjali Group, TBZ the Original, PN Gadgil Jewellers and others have opted for this route to grow their businesses as the margins in plain gold jewellery have tumbled to 4% from 15-20% two years ago. Higher rentals, which push up the operational cost, also figure among the reasons for choosing the franchisee route, according to jewellers. The latest entrant in the franchisee business is the Mumbaibased TBZ (Tribhovandas Bhimji Zaveri) the Original. “In today's world, the brand has to make an effort to go to customers and franchising model is a global tactic to deepen penetration and explore newer markets,“ said Prem Hinduja, CEO of TBZ.

• Double Taxation a Headache for India's Product Startups: India's software product startups plan to approach the finance ministry this week to get the ambiguity cleared in this Union Budget on the pending issue of whether software sold in the country should be classified as a product or service. Tax officials have been levying both value-added tax and service tax on sales of software products in the country, a move that's prompting many companies to shift their registered offices overseas. “Today, anything intangible is classified as a service for the purpose of levying a direct or indirect tax. Software products, while intangible, are not a service. Unless direct and indirect tax laws are urgently upgraded, we will not be able to build a product industry in India,“ said Sharad Sharma, cofounder of iSpirt, a software product think-tank. Largest product startups from India such as Druva, AdNear, Freshdesk, InMobi have shifted their domicile outside the country. According to iSpirt, India's software product industry can gross $100 billion in revenues by 2025 if favourable laws are in place. Currently, the industry is just 2% of India's total Indian IT industry, which is expected to gross $118 billion this year.

• Maxx Mobilink to Start Local Manufacturing of Handsets: Indian smartphone maker Maxx Mobilink plans to start production of mobile handsets at its Haridwar plant, beginning with assembling devices from April at the factory where it currently manufactures accessories such as battery and charger. The company's plans come at a time when Prime Minister Narendra Modi has urged manufacturers to `make in India' and reduce the country's dependence on imports for gadgets such as mobile phones. “Subsequently we will manufacture both feature phone and smartphone at the facility and will also set up a research and development (R&D) lab to support manufacturing,“ Maxx Mobilink chairman and managing director Ajjay Agarwal told ET. India's third largest mobile vendor Lava, too, has revealed its intention to start manufacturing in the country. It has also said that it will start assembling devices at its Noida factory from April and is planning to set up a factory at a cost of ₹500 crore over three years, besides looking at buying Nokia's Chennai plant.

• Snapdeal eyes 80% business from mobile phones: Aiming to generate 80 per cent of its business from the mobile phone segment, Snapdeal, India’s largest online marketplace, is enhancing technology. Most of the $ 627 million the company raised from Japanese investor SoftBank recently could be used to drive technology and, consequently, sales. At the end of 2014, about 60 per cent of Snapdeal’s traffic was accounted for by mobile phones. The company, which recently readied an innovation centre in Bengaluru, is beefing up its technology team and hiring 1,500 techies from internet companies around the world. “ At the pace at which we are growing, if possible, we would have hired everyone by yesterday. While internet penetration is still low in the country, we are confident we will have 80 per cent of our traffic from mobile very soon,” said Amitabh Misra, senior vice- president ( engineering), Snapdeal. Though the launch of a fourth generation (4G) network in India might aid Snapdeal’s plans, Misra, who has a decade of experience at Silicon Valley, is confident of meeting the target even without this. In the past years, Snapdeal has grown sixfold. For goods sold recently, the company clocked an annualised gross merchandise value ( GMV) of $ 2 billion. It plans to clock another $ 1 billion in GMV this year. “ We are pretty clear we are a tech company and will do anything possible, at any available platform, whether it’s the technology process, the infra platform or strengthening the team.

• Maruti Sukuki, Lloyd jump on bandwagon: Automobile major Maruti Suzuki and consumer durables maker Lloyd Electric have signed as on- air sponsors for the Cricket World Cup beginning February 14, sources say. When contacted, officials at STAR Sports, which will broadcast the tournament, confirmed this. Through the tournament, Lloyd will promote its Lloyd Air Conditioners brand. STAR Sports is also in talks with other advertisers, including those in the handset and ecommerce segments. However, before signing up, many are tracking India’s performance during the ongoing tri- series in Australia. “ How advertisers respond to the World Cup will depend largely on India’s performance in the runup to the tournament, as well as its performance during the World Cup. If India does well, the response from advertisers will be good,” says Ashish Bhasin, chairman and chief executive (South Asia), Dentsu Aegis Network. Shantanu Dasgupta, vicepresident (corporate affairs and strategy), Whirlpool, says, “The tri- series will determine how strong India is in OneDayers. We will then take a call on whether or not to invest in the Cricket World Cup.” On- air sponsorship rates for the tournament have been estimated at about ₹ 3 lakh/ 10 seconds, lower than the ₹ 5 lakh/ 10 seconds for the eighth edition of the Indian Premier League ( IPL), which begins in April. Multi Screen Media, the IPL broadcaster, is also making presentations to media planners and buyers.

• TomTom to sell GPS Sport Watches in India through Flipkart: TomTom today announced the launch of its range of GPS sport watches in India which will be available exclusively on Flipkart.com. The TomTom Runner and Multi-Sport GPS watches deliver real-time information such as time, distance, heart rate, pace, speed and calories burnt to runners, cyclists and swimmers. Amitesh Jha, Sr Director, Retail, Flipkart said, "We are excited to announce the exclusive launch of TomTom's first range of GPS watches in India. Targeted primarily at runners, cyclists, swimmers, this new range will be an extension of our fitness portfolio. Staying fit is one of top priorities today for the urban Indian youth and we have seen a recent surge in demand for fitness products. With the introduction of the TomTom GPS sport watches we are able to widen our portfolio of fitness products for our customers."

International:

• EBay to cut 2,400 jobs, sell enterprise unit ahead of PayPal split: EBay Inc plans to cut its workforce by 7 percent, or 2,400 jobs, in the current quarter and is exploring a sale or public offering of its enterprise unit as the e-commerce company prepares to split from its payments division, PayPal, this year. The jobs will be cut across the marketplace, payments and enterprise divisions, eBay said on Wednesday in its fourth-quarter earnings report. EBay said it entered into a standstill agreement with Carl Icahn, its largest active shareholder, and appointed to its board Icahn Capital executive Jonathan Christodoro. It also is adding two Wall Street bankers to its board, expanding the number of directors to 15. PayPal agreed to adopt a number of measures proposed by Icahn, which the billionaire said enhanced corporate governance at the payments giant.

• Wal-Mart launches in-store tax refunds: Wal-Mart Stores Inc has launched a service allowing customers to pick up tax refunds in cash at stores across the United States. The service, Walmart Direct2Cash, was made available at Wal-Mart stores from Tuesday, the company said. The world's largest retailer is working with Tax Products Group (TPG), a unit of Green Dot Corp, and Republic Bank & Trust Co. Wal-Mart will not charge a fee for the service, although customers could be charged up to $7. Sterne Agee analyst Thomas McCrohan said the service would appeal most to customers without a bank account, who would otherwise pay a higher fee to convert a tax-refund check into cash.

• Vilebrequin to Open Atlanta Store: Vilebrequin will open its first store in Atlanta, at the Buckhead Atlanta development, in April. The 827-square-foot store will sport the brand’s new Dune concept, a design that speaks to the brand’s San Tropez history with changing rooms that are reminiscent of beach huts and beams of light that project from the ceiling that are like beams of the sun. The store will carry men’s and boys’ swimwear as well as men’s ready-to-wear, women’s and girls’ swimwear. Other brands with stores at the development include Christian Louboutin, Helmut Lang, Hermès, Moncler and Theory.

• Pinterest Buys Machine Learning Firm Kosei: Pinterest, fashion’s favorite online scrapbook, is boosting its machine learning and data science brainpower to help convert its devoted user base into dollars. Michael Lopp, head of engineering at Pinterest, said in a blog post today that the company had acquired machine learning firm Kosei to “accelerate our work in discovery and monetization.” The social network already uses machine learning in its advertising business to understand ad performance and predict what will be relevant to users. Lopp said Kosei included “some of the best minds in machine learning and data science” and has been building a technology that “drives commerce by making highly personalized and powerful product recommendations.”

• P&G's David Taylor Adds President of Global Beauty to Title: David Taylor has landed in an enviable spot. Buoyed by a promotion to oversee the beauty business, the Procter & Gamble Co. veteran has found himself the front-runner in the race to eventually succeed A.G. Lafley, the firm’s chairman, president and chief executive officer. Taylor’s rise has dimmed the chances of Deb Henretta, P&G’s group president of Global Beauty, who was once seen as an early contender for the top job. Taylor, group president of Global Health & Grooming, will double the scope of his responsibilities by adding the beleaguered beauty business to his domain, according to sources citing an internal announcement. While Taylor will become group president of Global Beauty, Grooming & Health Care, effective Feb. 1, Henretta, the head of beauty, will move into the newly created leadership position of group president of Global E-business. She will be succeeded by Patrice Louvet, now group president of Global Cosmetics, Prestige and Salon Professional, who will maintain his duties while adding personal, skin and hair care. He will assume her title of group president of Global Beauty.

Tech:

• WhatsApp Finally Launches on the Web: It seems the day many people have been waiting for is finally here – WhatsApp is now available on your desktop, but only if you’re an Android, Windows Phone or BlackBerry user. The new Web client is actually a simple mirror from the WhatsApp app on your phone, so in order to use it, you’ll need to have an active connection on your phone, not just your computer. To start, you’ll need to scan a QR code and have the latest version of WhatsApp installed on your phone. You’ll also need to be using the Chrome browser on the desktop. WhatsApp founder Jan Koum said that due to “Apple platform limitations”, there’s no iOS version on the way for now.

• Windows 10 to get 'holographic' headset and Cortana: Microsoft has revealed that Windows 10 will bring its voice-controlled assistant Cortana to PCs. It also unveiled a headset that it said would one day project the operating system over views of the real world. In addition, the firm announced that the OS upgrade would be offered free of charge for devices running Windows 8, Windows 7 and Windows Phone. The offer, which is limited to the Windows 10's first year of release, may aid its adoption. It marks a change in strategy from Microsoft's previous policy of charging for major updates, and could help avoid a repeat of the relatively slow uptake of Windows 8.

• Lava to Sell New Brand on Own Online Platform: Home-bred Lava International will soon launch a sub-brand of its popular Xolo brand of smartphones exclusively on an e-commerce platform it is developing, as the country's third largest smartphone maker strives to replicate the success of foreign rivals Xiaomi and Motorola's `online-only' strategy. Vishal Sehgal, co-founder and director at Lava, did not reveal the name of the new sub-brand but confirmed that its launch and that of the e-commerce site will coincide. With the launch of the website, Lava will become the second Indian smartphone maker after Micromax to follow in the footsteps of the global majors, which have tasted immense success through their online-only model in India Micromax-owned Yu Televentures is selling its first smartphone, Yureka, exclusively through Amazon since January 13. Lava's move also follows Xiaomi's successful strategy in China, where it sells via its own e-commerce site. Xiaomi, which has used the model to dethrone Samsung as China's largest smartphone maker, plans to open an e-commerce site in India as well. Xiaomi not only sells handsets online but also cultivates its customer base through its own software, services and entertainment offerings.

• Motorola Offers Buyback on Gen 2 Moto G and X: Motorola India has introduced a fiveday buyback offer period for its popular Moto X (Gen 2) and Moto G (Gen 2) models to mark India's Republic Day. Under this offer, open from January 19 to January 23, customers can get up to ₹4,000 off on Moto G and up to ₹ 6,000 on Moto X in exchange for old smartphones, while the Moto 360 buyers will get a free Motorola Bluetooth Headset, reports Our Bureau. Motorola is also running an offer in which one can avail 10% cash-back on HDFC credit and debit cards for a minimum transaction of ₹ 7,500.

• Twitter now rolling out ‘while you were away’ recap in mobile apps: Earlier in January we reported that Twitter was testing a ‘while you were away’ feature in its mobile apps for some users that recaps what happened since you last visited, but now it’s rolling out for everyone. Twitter announced today that the feature, called Recap, is beginning rollout to everyone starting today for iOS users and later for Android users. In the announcement blog, the company said that its goal is to “help you keep up […] with your world no matter how much time you spend on Twitter.” This new feature will definitely help those who are newer to the service and aren’t quite accustomed to how fast paced it can be. The New York Times reports that users won’t have control over when Recap appears or the ability to specify what kinds of tweets it shows.

• Dropbox for Windows Phone has arrived: Not only has the long-awaited WhatsApp Web app launched, but today also brings the introduction of the much-anticipated Dropbox for Windows Phones and tablets. Announced in a blog post, the new apps offer access to the core Dropbox features you’d hope to see, like automatic photo backups, your favorite files (accessible online or offline), and multi-account support for people who have a separate work and personal account to maintain on a single device. For the phone version, you can also pin any specific Dropbox folder to your Start screen for swift access. Microsoft said that Windows Phone 8.0 and 8.1 (and Windows tablet) users will be able to download the app from today.

• Google Reportedly Set to Launch a Wireless Carrier Service: Google is launching its own mobile carrier service, codenamed “Nova,” according to a report by The Information. The service is expected to operate on T-Mobile and Sprint’s wireless networks, and is aimed at lowering prices and improving the user experience with mobile carriers. The report also notes Google is developing new communication apps to go along with the service. The move would essentially allow Google to control all aspects of its users’ mobile experience, from software and hardware to the networks the devices run on. While Google itself would not comment, according to the report, the company has been working on the project since last fall, and may be launching the service as soon as this year.