Daily News Digest- 23rd Jan'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Fast Food Chains Take the Spice Route to Success: Fast food's hot new offerings in India are all, literally, hot.Fries, burgers, wraps from KFC, Dunkin' Donuts and McDonald's that have high chilli quotient are among the best-selling products now. And there's no better, and hotter, example than KFC's Flaming Crunch Chicken, flavoured with one of the world's hottest chillies, the Assam-grown ghost pepper or `bhut jolokia'. Assam's ghost pepper is in the top ten of the world's hottest chillies and scores over one million in Scoville Heat Unit, a measure of spiciness. Ghost pepper-flavoured Flaming Crunch Chicken is one of KFC's most successful new launches in India, company officials say . Sales of crunch chicken have tripled since its December launch across 350 stores. Chilli is the management's favourite flavour in Dunkin' Donuts and McDonald's too. For Dunkin', the Tough Guy Brute Burger is among the hottest burgers by taste and, six months after launch, by sales. For McDonald's, McSpicy and Masala Grill are the fastest-growing categories. Fast food's high chilli quotient, say chefs and industry executives, is another adaptation of western `bland' munchies for the Indian palate.

• Incredible India is a Rs 200-Crore Bounty for Ad Agencies: The tourism ministry has floated a tender for the ₹200crore Incredible India campaign, inviting bids from advertising agencies with revenues of at least ₹100 crore, a condition that rules ` out participation of mid-sized firms such as Contract, Rediffusion Y&R, Everest, Bates CHI, Grey or any Indian-owned agency like Concept group of companies and other smaller boutique shops. While the ministry runs this campaign every year, in the international leg this year it wants to focus especially on new markets like Russia and CIS countries, the Middle East and South America, among others. “The bidding agency must have a cumulative revenue from creative work equivalent to ₹ 100 crore or above in the last three financial years. In addition, the creative agency should have handled at least one creative account in any field, with revenue of over ₹5 crore, in any one of the last three years,“ says the tender notice. The ministry has also stated that the agencies will have to submit an earnest money deposit (EMD) or bid security of ₹ 50 lakh. This will be returned to “unsuccessful bidders...within one month of issue of the work ordercontract to the successful bidder“. According to the head of a nonparticipating agency, if the guidelines are strictly followed, only five agencies in India can bid for the account. These include Ogilvy & Mather, J Walter Thompson, McCann Erickson, Lowe and FCB Ulka, said the agency head, who did not wish to be named.

• Vistara Cuts Fare to Counter Rivals: Vistara, Tata Sons' joint venture carrier with Singapore Airlines, has brought ticket price levels lower to lessen the gaps with rivals -in some cases even offering cheaper tickets than competitors -after price-sensitive Indian customers opted for discounts offered by Jet Airways and Air India. The fares are almost half of what they were last week, data from travel portals and its own website showed. For instance, a Delhi-Mumbai ticket price booked for a flight a month in advance is ₹5,481, compared to about ₹10,700 last week.The price is lower than most rivals, including IndiGo. The airline, however, hasn't an nounced any discounts or offers for the lean season starting end January and continuing till April. “They are now at the levels of the others, barring some instances.Vistara isn't exactly undercutting anyone yet, nor is it playing the fare war,“ said an executive from Makemytrip, India's biggest online travel portal by sales. The airline is also at par or lower than rivals on spot fares.

• Flipkart to Revamp Tech, Invest $10 M in New Servers from Dell: Flipkart is ramping up its technology infrastructure by investing $10 million in new servers from Dell to build a private cloud, according to two people with knowledge of the matter. “Flipkart's Big Billion Day sale made it realise that its current IT infrastructure is not capable of supporting such massive spikes in traffic,“ said one of the people.“The company therefore decided to work towards building a robust private cloud by working with Dell.“ Dell first signed up with the country's largest online retailer to build a private cloud in February last year. However, following events such as the Big Billion Day sale and Xiaomi Mi3 flash sale, the current infrastructure was found to be inadequate to support the surge in traffic. The result was frequent outages and customers were unable to shop. “Technology plays an important role for Flipkart as it competes with Amazon,“ said the second person. “Unlike Amazon, which runs IT infrastructure not just for itself but also for thousands of other companies, Flipkart has yet to build a strong technology platform that is reliable enough during peak seasons.“ During the Big Billion sale, many customers complained about order cancellations after making payment, sudden changes in product prices and errors on the website. Flipkart said although it was prepared for 20 times surge in traffic, the actual traffic was a lot higher, with 15 lakh customers trying to visit the website. Founders Sachin Bansal and Binny Bansal had to make a public apology about the incident.

• Tata-Tesco JV Plans Rs 250-Crore Investment to Open More Stores: Trent Hypermarket — the equally owned joint venture between the Tata Group and UK’s Tesco — plans to invest ₹250 crore as the only Indian multibrand retailer with foreign investment aims to open more stores. The planned expansion is likely to be seen as a test case for the ruling BJP’s stance towards foreign direct investment in the supermarket segment. The party’s stated policy is against FDI in stores selling multiple brands, but industry watchers and experts say the government is unlikely to meddle with Trent’s plan at a time when Prime Minister Narendra Modi is focused on bringing in investment. Trent’s board has been authorised to raise up to ₹250 crore through loans, guarantee, securities or way of subscription, according to a company resolution, a copy of which was filed with the Registrar of Companies earlier this month. The board passed the resolution on January 5. In December 2013, the previous Congress-led government had approved Tesco’s application to invest about $110 million (₹680 crore at current exchange rate) in the joint venture.

• ‘Jabong to enter $ 1- bn club this year’: Jabong, a leading fashion ecommerce company, looks set to enter the one billiondollar club this year. Rocket Internet- led Jabong reported agross merchandise value of $300 (₹ 1,800 crore) million at the end of 2013, which doubled in 2014 to about $ 600 million (₹ 3,600 crore). “We have grown by at least two times in 2014 but the exact numbers are yet to be firmed up. For 2015, the plans seem similar, as we would grow more than the market rate. As the industry is already on a high trajectory growth, we should be able to clock a growth of two times, maybe a bit more,” Praveen Sinha, co- founder &CEO of Jabong, told Business Standard.

• UltraTech Cement Notice to Portals for Selling Its Brands: First it was consumer companies crying foul about aggressive discounting by online portals, it now seems to be the turn of commodity manufacturers. Cement maker UltraTech Cement Ltd has directed at least two online marketplaces -ApnaStock and MaterialTree -to stop selling its brands -UltraTech and Birla Super brand of cement in Bangalore, stung by the shift of business to online marketplaces. A letter from the company to ApnaStock, which was accessed by ET says: “We have examined your proposal online along with regular cement retail stores with authorized dealership.We find it conflict of interest in dealing online versus regular onshop selling. Hence we cannot (sic) authorized to sell Ultratech products over ApnaStock Solution Pvt Ltd platform of online and offline selling.“ These online marketplaces buy bags of cement from authorised dealers of Birla at a price of about ₹ 385 a bag. In turn, they offer it to online shoppers at about ₹395, which is still below the price that a customer would pay for a similar bag of cement in a physical store. ApnaStock or MaterialTree are not Birla-authorised marketplaces.

• Sunil Sood to Replace Pieters as Vodafone India CEO: Vodafone India has named Sunil Sood, chief operating officer, as its next chief executive. He will replace Marten Pieters at the beginning of the next financial year. Pieters, the longest serving telecom head in the country at the moment and the only CEO to have seen all the spectrum auctions so far and the ups and downs of the industry , will retain a non-executive role on the board of India's No. 2 mobile operator. “Marten's term as chief executive has been marked by outstanding business performance and exemplary leadership in a highly complex sector and operating environment,“ Analjit Singh, chairman of the board of Vodafone India, said in the statement. The company will announce Sood's replacement shortly. Since Pieters took over as managing director and CEO in February 2009, Vodafone has expanded to an all-India operator, doubled its revenues, added more than 100 million custom ers, increased market share and launched data services used by more than 57 million customers.The company currently has some 177 million subscribers.

• Select Citywalk, Everstone form food court JV: Two well-known names have united to create a food court joint venture to tap the increasing demand for eating out. New Delhi-based mall operator Select Citywalk and Everstone Capital-owned Pan India Food Solutions have formed a 51:49 partnership to operate multi-brand food courts in high-traffic clusters such as shopping centres, airports and office campuses. The JV , which aims to create a single eco-system for various restaurant brands, will run food courts under `My Square' brand, similar to Singapore's Food Republic and US' HMS Host. Food courts, which started off in the west in the 1980s, have become popular in Asia's third largest economy too. For many Indians, a shopping experience in a mall is incomplete without hitting the food court. It is an equally common sight for people to grab a bite from the quick service outlets clustered in or around the airport. Globally , food court operators have emerged, improvising hawker fare by bringing food vendors together on a strong platform and tapping into the evolving consumption habits in fast-growth economies. In the Indian context, this segment has seen both value-for-money as well as fine dining experiences being offered together.

• Tata Motors launches Bolt hatchback at ₹ 4.64 lakh: Tata Motors on Thursday launched the Bolt, a hatchback, starting at ₹ 4.64 lakh ( ex- showroom, Mumbai). The company is pitting this car against segment leaders Maruti Suzuki Swift and Hyundai Grand i10. The Bolt, Tata Motors’ second launch in five months, is based on the platform of its compact sedan Zest. The base petrol variant of the Bolt costs ₹ 36,000 less than the Zest in Mumbai. The Bolt will be launched in 100 cities in aweek and will have four trim levels and two engine options, making it a total of eight variants for the hatchback. The top- end petrol version is priced ₹ 5.75 lakh while the base diesel variant comes at ₹ 6.34 lakh and the top- end diesel at ₹ 7.32 lakh. A senior company executive, however, said these were introductory prices and would be revised later. The Bolt shares most of its styling with the Zest and has the same 1.2 litre Revotron petrol engine and 1.3 litre Quadrajet diesel engine. The engines have been tuned to be more responsive for the Bolt.

• Kenstar launches split AC in exclusive tie up with Amazon: Strengthening its foothold in the Indian market, consumer durable maker Kenstar today announced its foray into the air conditioner segment and launched a lineup of split air conditioners, which would be sold exclusively on e-commerce giant Amazon.in. The new product range which comes with 3 to 5 BEE Star ratings starts from Rs20,990 and goes upto Rs 25,990 for a 5 star rated 1.5 ton AC. "We are proud to announce our association with the leading e-commerce player Amazon.in who has a wide reach and popularity among the tech savvy generation," said Rahul Sethi, President, Kenstar . "We are confident to reach our customers with this new product offering," he said further. According to Sethi, it is expected that the AC market in India will reach 4 million unit from the current 3.3 million unit in 2015. "In line with this growing demand we found immense potential in this segment to expand our product portfolio," said Sethi.

International:

• Apple's Tim Cook salary up over 40%: Tech giant Apple's chief executive Tim Cook's base salary was increased by nearly 43% in February last year, according to the company. Mr Cook's salary rose to $2m (£1.3m) from $1.4m, and his total remuneration more than doubled to $9.2m in 2014. The base salaries for other executives were also increased by over 14% to $1m, the company said in its annual report. Apple's New York listed shares had hit a record high last year, while almost 40 million iPhones were sold. The increase to Mr Cook's salary was the first since November 2011. He became the firm's chief executive in August 2011. In the report, Apple said the increases were given after reviewing "peer company" market data provided by its independent compensation consultant. 

• Florentia Village Shanghai Outlet Mall Opens: In the outer suburbs of Pudong, past farmland grazed by scraggly sheep, you will find an ersatz Italy. Terracotta and lemon yellow arches line the entrance of a 970,000-square-foot altar of fashion (made with real marble, no less). This is Florentia Village Shanghai, the second outlet mall of RDM China, the real estate development company of the Italy-based Fingen Group. The extravagance of Florentia Village, which opens Thursday, speaks for a sector on the rise. While China’s economic growth rate has slowed to 7.4 percent, its lowest in 24 years, its outlet mall sector is bucking the trend. Across the board, retail profit margins are suffering except for in two areas. The first is well documented — the online retail market, made famous by Alibaba’s historic $21.8 billion initial public offering last autumn. The second is outlet malls, less well known but still thriving.

• John Lewis Ramps Up Contemporary Brand Offer: British retailer John Lewis is ramping up the fashion quotient for spring, with a focus on contemporary brands for men and women. Central to its strategy is a new denim boutique called Denim Wardrobe that will launch at John Lewis’ Sloane Square unit on Jan. 28. The boutique is a partnership with the denim and contemporary retailer Trilogy, which has built a reputation on advising customers on the myriad fits and washes available in premium denim. The Denim Wardrobe concession will carry labels such as J Brand, AG and DL 1961, and be operated by John Lewis staff trained by Trilogy’s denim specialists. “The way that our customers are beginning to wear premium denim is much more flexible and much more wide reaching than it used to be,” said Ed Connolly, buying director for fashion at John Lewis. “We really think this boutique is going to resonate with our customer base very strongly.”

• Mali Targets 800,000 T Cotton Per Year by 2018: Mali plans to produce 800,000 tonnes of unginned cotton per year by 2018 after output surged by more than a quarter in the 2014/15 season on the back of improved farm inputs, the head of the state-owned textile development firm CMDT said on Thursday. Kalfa Sanogo said final production figures for the season stood at 552,000 tonnes, compared with 440,000 tonnes the previous season. "The government increased input subsidies and lowered the price of fertilizers. This significant grant from the state gave a lot of momentum to cotton production," Sanogo told Reuters in an interview on Wednesday in Bamako. Mali, Africa's third biggest gold producer behind South Africa and Ghana, also counts cotton as one of its main exports.

• Gerry Weber to Appoint Son of Founder as CEO: Germany's Gerry Weber said on Thursday it would appoint Ralf Weber, the son of the fashion group's founder, as head of the managing board from Feb. 25. Ralf Weber joined the three-man board in 2013 and was already head of sales and corporate development. His father Gerhard Weber, who owns a 29 percent stake in the firm, stepped down last year and joined the supervisory board. David Frink will give up the CEO post, but continue to run finance, logistics, IT, administration and human resources, the group said in a statement, while the third board member Arnd Buchardt remains in charge of products, brands and licences. Gerry Weber said shareholder representatives on the supervisory board had agreed to the step. Last month, the company agreed to buy fashion group Hallhuber and announced plans to return to the menswear market as part of its expansion strategy. The firm has been expanding beyond its home market and has said it could also make acquisitions to add brands to complement its Gerry Weber and Taifun lines, which cater to women in their mid-thirties and older, and the Samoon brand for plus-sized womenswear.

Tech:

• Higher Legal Risks Involved in the 4G Ecosystem Compared to 3G: Experts: India’s handset industry could see a spate of lawsuits around patent violations, as vendors launching low-cost 4G devices may look to cut expenses by resorting to copying rather than pay royalties to stay competitive in a fast growing market, say experts. Sweden’s Ericsson and China’s Huawei, which together hold a majority of patents related to fourth-generation communications technology, have warned potential offenders of litigation in case of patent violations. Handset makers, on the other hand, accuse the patent holders of misusing their dominant position and forcing them to agree to what they claim are unfair terms on patent-related payments, clearly underlining the fault lines in the telecom industry. In telecom, patent litigation is going to be huge all across the world and India is no exception,” said Pavan Duggal, a leading cyber law expert and advocate. As device makers, running on tight margins, look to cut costs, the potential to copy designs and “the other element of not using the right licences, cannot be ruled out”, Duggal said. Vendors may also look to circumvent expensive R&D investments and choose the more “economically viable” option of copying the technology, and then face potential risk of patent litigation as part of business risks, he added.

• Zomato can’t launch payment service in India: Zomato, the Indian restaurant search service, cannot introduce its latest innovation — cashless payment service — in India because of stringent credit card payment guidelines of the Reserve Bank of India ( RBI). USbased taxi aggregator Uber, too, had faced the same problem when it entered India last year. Gurgaon- based Zomato, one of the fastest growing start- ups in India, is set to unveil its cashless payment service in Dubai next month. “ We will start with Dubai, and see how it goes. We may look at India for this services at a later stage, depending on how things develop,” said Zomato’s co- founder Deepinder Goyal, referring to the regulatory hurdles. Cashless payment services are seen as a strong revenue contributor for Zomato, as the company will get a commission from restaurants for each transaction. The company is reported to be raising $ 80- 100 million in a fresh round of funding for expansions in certain countries; it is also hiring people. However, Goyal has declined any possibility of ‘ immediate’ fundraising for the company. According to him, the company is well funded for its capital requirements for the immediate future. Zomato has already added the payment option to its existing mobile application that would allow users to pay their restaurant bills through the app without exchanging cash. However, the feature is still inactive in the app that gets about 12 million visitors amonth.

• Jumping Into Augmented Reality, Microsoft Introduces 3-D Headset: Microsoft wants back in the game, and it is using a little science fiction to get there.The company on Wednesday , unveiled an unexpected new headset that allows interaction with holographic images, enabling people to play video games, build 3-D models and hold immersive videoconferences with colleagues. With the device, HoloLens, Microsoft is entering an increasingly crowded area, with giant competitors, in the world of virtual and augmented reality. Whether Microsoft can outmaneuver those companies, like Facebook and Google, is far from guaranteed.

• Govt plans free Wi-Fi in 2,500 cities & towns: As part of its `Digital India' scheme that aims to boost internet connectivity, the Centre will roll out free high-speed Wi-Fi in 2,500 cities and towns over the next three years, reports Pankaj Doval. BSNL will implement the Rs 7,000-crore scheme.However, after an initial period, one will have to pay for the service. The Wi-Fi speed will be “of 4G levels“ and 50,000-60,000 Wi-Fi hotspots will be set up.

• Twitter's Bing Tweet Translation Is Back: Twitter today announced that it’s resuming its team-up with Bing to let you read tweets in multiple languages. Translation functionality has waned on and off on Twitter, most recently re-appearing in Tweetdeck a couple of weeks ago. To activate the functionality, simply go to your account settings and select ‘Show Tweet translations.’ When looking at a tweet in a language you don’t understand, look for the globe icon located in the tweet. Simply click on the globe to expand the tweet, and a translation will appear below the original text. Alternatively, point your mouse to the “click to translate” prompt below an expanded tweet.

• Microsoft Announces Standalone Office 2016 for Later this Year: In Microsoft’s eternal quest to make you more productive, the company played up its new suite of universal Office for Windows 10 apps during the event for its new operating system yesterday. But in a blog post detailing new features today, the company snuck in an announcement: Office 2016 is being released the second half of 2015. Wait what? Yes, you read that right: there are two separate Office suites incoming. The touch-optimized Office for Windows 10 is slated to be the future of the company as it seeks to create universal apps that can work on anything from 84-inch displays to phones. Office 2016, on the other hand, will almost certainly be a version of Office more akin to what you already know and (maybe) love. In other words, just like past versions of Office, but with new features. This might not come as much of a surprise if you’re a Windows 8 user; there already exist separate versions of some Office apps for Microsoft’s “modern” UI (AKA Metro). OneNote, for instance, comes pre-loaded on the Surface Pro 3 as a modern app with basic functionality, but OneNote 2013, included with Office 2013, is a much more powerful desktop app.

• Amazon Unveils Kindle Textbook Creator: Today, Amazon announced it’s releasing a new initiative that will make it easier for teachers and educators to get their materials onto Kindle products and apps. Called Kindle Direct Publishing (KDP) EDU, it’s designed to help publish, prepare and promote educational content for students across Amazon’s own reading products, as well as apps for mobile devices and desktop. Educators can easily turn PDFs of textbooks and course materials into ebooks, for instance. Books made using the Kindle Textbook Creator include nifty features such as multi-color highlighting, a notebook to keep track of passages and images and flashcards to keep track of important concepts from each chapter. If you’re an educator, you can get started with the beta version of the tool today.

• Rdio Is Coming To 24 New Countries: Last week, Rdio launched its music streaming service in India. Now, it’s kicking its global expansion up a gear, debuting in 24 new countries, reports VentureBeat. Through a deal with mobile carrier Digicel, Rdio will reach 14 million subscribers in countries across Central America, Asia-Pacific and the Caribbean. The move brings Rdio to 85 markets in total.