Daily News Digest- 5th Feb'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• Amazon to set up warehouse centre in Hyderabad: Amazon India will set up a warehouse/fulfilment centre in Hyderabad as part of its expansion. A delegation led by global director and head for real estate and facilities at Amazon, John Schoettler, agreed to train MSME clusters and showcase handicrafts sourced from the state as a part of its marketplace, said a release issued by the Telangana state government. The global e-commerce player will operate from a leased facility two months ahead of the completion of the warehouse facility. Five fulfilment centres were added to the company's existing facilities in 2014, in addition to its operations in Mumbai and Bengaluru.

• Shoppers, Stop! You may Get it Online: Big brickand-mortal retailers Shoppers Stop, Lifestyle International and Spencer's Retail plan to sell their products on e-commerce marketplaces such as Amazon, Flipkart, Snapdeal and Jabong, following top retailer Future Group in embracing the reality of online shopping boom in the country. “It is clear that Indians are adopting to online space faster and this adoption will only grow in the years to come,“ said Govind Shrikhande, MD at India's oldest department store chain Shoppers Stop. “Also, it is becoming clearer that discounting is going to be the norm of these (e-commerce) guys because they are getting funded and you can't really face this disruptionists. So, either you join the battle or leave it. You can't be a bystander anymore.“ So, in the coming weeks, Shoppers Stop will start selling its private label fashion brands including Stop and Haute Curry among other labels on the online marketplaces. In a bid to maintain differ ent products for online and physical stores, it plans to create entirely separate products to be sold only on online.

• Manoj Kohli resigns from Bharti Airtel board: Bharti Enterprises Managing Director Manoj Kohli has resigned from the board of Bharti Airtel, marking his formal exit from the telecom business of the group. In a filing to the BSE, Bharti Airtel said that Kohli has resigned as non-executive director. Informing about changes in composition of the Board of Directors of the company, Airtel said Shishir Priyadarshi has been appointed as an independent director. Kohli had led telecom business of Bharti in various roles since 2002. He led Bharti Airtel's India operations for eight years during which the customer base grew from 1 million to 140 million before moving to Africa in 2010. 

• For Online Sellers, Most Roads Lead to North-East Now: India's North-Eastern states are fast emerging as the drivers of growth for some leading e-commerce companies, which claim double-digit growth in the market after having overcome last-mile delivery challenges. In this region, where hilly terrain and limited road and flight connectivity have posed hurdles for companies wanting to expand operations, demand for goods online is being fuelled by unavailability of certain products and the deep discounts being offered by e-commerce companies on a host of goods, including branded products. Snapdeal's VP operations, Ashish Chitravanshi, said the NorthEast region is not only an impor tant market for the company but also has the potential to be at a par with Delhi and Mumbai, in terms of business potential. “The region is among the fastest-growing markets in the country for us. We have been steadily growing in double digits monthon-month in the North-East markets, with a steady increase in the number of orders from the region,“ said Chitravanshi. “As we take our reach deeper into the region we anticipate this number to grow phenomenally“.

• Airtel Q3 Net Doubles to Rs 1,436 Cr on Data Boost: Bharti Airtel more than doubled its third-quarter net profit, beating estimates, as higher usage of pricier data services along with lower costs helped offset pressure on its voice business as well as continued losses in Africa. Consolidated profit for India's largest telecom operator rose to ₹1,436 crore for the three months ended December 31 from ₹610.2 crore a year ago. It was the highest level of earnings since September 2010 and the fifth straight quarter of profit growth after a prolonged period of declines under competitive pressures. The street had broadly expected profit at about ₹1,310 crore. Revenue grew al` most 6% to ₹23,217 crore. “Airtel's revenue growth in India of 12.6% in the third quarter is the highest in nine quarters.Mobile data growth is at 74.3%,“ Gopal Vittal, MD and CEO for India & South Asia, said in a statement on Wednesday . Data contributed 16.2% of India mobile revenue, up from 14.5% in the previous quarter and 10.6% a year ago.

• Flying In & Out of Delhi Airport to Get Cheaper: Delhi-Mumbai return fares are likely to come down by about ₹800 after the Airport Economic Regulatory Authority cleared a 78% reduction in charges at Delhi airport and asked the operator to submit fresh rate slabs for approval. With this order, both the landing and parking charges and the user development fee will come down at Delhi airport, which is operated by Delhi International Airport Ltd, a GMR Group company. While the reduction in landing and parking charges will add to the profitability of airlines, lower UDF reduction will cut ticket prices. Delhi airport currently charges arriving and departing passengers UDF ranging between ₹232 and ₹550 for domestic fliers and between ₹518 and ₹1,270 for international passengers. A Delhi-Mumbai return passenger pays ₹1,015 as UDF to Delhi airport and ₹274 to Mumbai airport.` DIAL was allowed to levy charges to help recover costs incurred on developing the airport. The charges are being lowered since the company did not make any fresh investments during the past five years. “Accordingly, the Authority proposes to bring the 78.24% factor into effect in respect of aeronautical tariffs at IGI Airport and expects DIAL to submit the tariff card addressing the same,“ reads the AERA order.

• Indian Suppliers to Improve Cost Efficiencies for BMW: BMW India is looking to increase the use of locally made components, a strategy that would help keep the price of its luxury cars more competitive here as the company targets double-digit sales growth in 2015 after posting a drop last year. The carmaker's strategy is to have at least half the components sourced from the Indian market. BMW has partnered with seven local suppliers for sourcing components for production of cars at its Chennai plant. These are Force Motors, ZF Hero Chassis, Draexlmaier India, Tenneco Automotive India, Valeo India, Mahle Behr and Lear India. BMW India President Philipp von Sahr didn't confirm any immediate price change in the BMW product lineup on account of higher localisation, but said the move would help in efficient production and the company's commitment to the government's `Make in India' campaign.

• HCL Sets Up Texas Delivery Centre: The country's fourth largest software services firm HCL Technologies has set up a global delivery centre in the US and will initially create 300 jobs. It also offers space for an additional 200 employees, according to an HCL statement. “It also reinforces HCL's differentiated, multi-tiered glob al delivery model comprising onshore, offshore and nearshore capabilities offering measureable business impact, joint innovation and re al-time collaboration with clients worldwide,“ it said.

• Startups may Enjoy Excise Duty, Service Tax Waiver: The union government is in the process of gift-wrapping a bonanza for startups with proposals to exempt them from service tax and excise duties for a specified period. An inter-ministerial group is considering a one-stop registration service for all startups that will make also them eligible for government grants. The group, chaired by Jayant Sinha who is minister of state for finance, includes ministries of science and technology, corporate affairs and the department of electronics and IT. Harkesh Mittal, secretary in the department of science and technology, confirmed talks but declined to share specifics of the proposals under consideration. “The proposal is in its very early stages,“ he said. Startups which register under the department of science and technology and are certified as `bonafide' will then be eligible for tax exemptions ­ both service and excise-until their revenues reach a certain threshold, according to sources privy with the talks. They will also qualify to receive grants of up to ₹10 crore from the DST. According to World Bank, India is currently ranked at 134 in the ease of doing business, a ranking the Modi government is aiming to change.

International:

• Petrobras chief and other senior executives resign: The head of Brazil's state-run oil giant Petrobras and five senior executives have resigned in the wake of a huge corruption scandal. Maria das Gracas Foster's departure follows the arrest and testimony of some three dozen executives at Petrobras and many of its suppliers. The board of Petrobras is due to meet on Friday to elect new executives. The scandal involves alleged price-fixing, bribes and kickbacks, which implicates Brazil's ruling party. Prosecutors have uncovered around $800m in bribes and other illegal funds. More than 200 businesses are being investigated and more than 80 people, including three former executives from Petrobras, are facing possible charges. Petrobras shares soared 16% on Tuesday on rumours that Brazil's President Dilma Rousseff would sack the chief executive. On confirmation of the resignations, the shares initially jumped another 8% on Wednesday, but fell back to end the day just 1.1% higher.

• Alibaba begins drone delivery trials in China: China's biggest internet retailer says it has begun testing drone-based deliveries to hundreds of customers. It says the trial will last three days and be limited to areas within a one-hour flight of its distribution centres in Beijing, Shanghai and Guangzhou. The company's blog adds that it believes the technology has the potential to speed up deliveries. Amazon, Google and parcel service UPS are among other companies carrying out more private trials of such aircraft. Alibaba is using its drones to deliver orders for a specific type of ginger tea, helping limit the maximum weight of the packages to 340g (12oz). The Tech in Asia blog, which was one of the first to report the development, said the experiment was being undertaken by Alibaba's Taobao division - an eBay-like marketplace that connects third-party sellers and buyers - and would involve 450 shoppers.

• Suzanne Bryant Named Sr VP of Women's Design at Tommy Bahama: Suzanne Bryant has joined Tommy Bahama as senior vice president of women’s design. Bryant will be based at the company’s Seattle headquarters and will report to Bradley O’Brien, executive vice president of design and product development, who joined last July. Bryant will oversee the sportswear, swimwear and accessories collections. She will be responsible for all facets of design and product development for all Tommy Bahama women’s product categories. She takes over duties formerly held by Stephen Cirona, who left last February as senior vice president of women’s sportswear and accessories to start his own men’s contemporary business, James & Frank, LLC.

• Zara's Fast Fashion Makes Billionaire Family of Lebanon's Dahers: When LeMall opened amid a blaze of fireworks in 2010, it marked the inauguration of the biggest shopping mall in southern Lebanon. To the region’s fashionable young residents, it signaled something even more important: the first local Zara outlet. “Zara offers a wider range of clothing that can’t be found anywhere else,” Fatima Hussein-Shour, an interior design student, said in a telephone interview from her university’s campus in the port city of Sidon, where LeMall is located. “Its styles are definitely more unique than those offered at local stores I used to shop at.” Hussein-Shour, a 19-year-old who wears a hijab and favors floral prints, is one of thousands of shoppers across the Middle East whose embrace of Inditex SA’s trendy, cost-conscious brand has helped create a billion-dollar fortune for the company’s regional franchisee, the Daher family. Through their Beirut- based company, Azadea Group, three Daher brothers own franchise rights to more than 55 fashion and lifestyle brands in 14 countries.

• China Retailers Play Poker in Empty Malls as Shoppers Go Online: Hunched over the counter of his tiny, gadget filled stall in Beijing’s vast Hailong Electronics City, Wang Ning bemoans a week without a single sale. “It’s dying,” says Wang, shaking his head as he looks out at abandoned stores and torn promotional posters in what was once the busiest market in the Zhongguancun district, known as China’s silicon valley. “There are more sales staff than customers around here. Everyone buys online now.” The six football-field-sized floors are dotted with shuttered shops, victims of the rise of Internet-based businesses like Jack Ma’s Alibaba Group Holding Ltd. and billionaire Richard Qiangdong Liu’s JD.com, which started out in Zhongguancun almost two decades ago. The online revolution promises to boost productivity and could create 46 million new jobs in China by 2025, many of them higher-skilled, according to a report by New York-based McKinsey & Co. in July. The losers will be as many as 31 million traditional roles, the equivalent of the entire employed population in Britain.

Tech:

• Samsung In a Fight for No.1 Spot, Again: Samsung and Micromax are locked in for the top two slots in India's surging and lucrative smartphone market but there's no clear winner. While one research agency says that home-bred Micromax had dethroned Samsung as the leader, another has kept the Korean major at the top of the list. UK-based research firm Canalys on Wednesday said Micromax accounted for 22% of the smartphones shipped into India in the October-December quarter, and put Samsung at 20%. However, Hong Kongbased Counterpoint Technologies said Samsung holds the lead with 27.4% share. Micromax came in second at 19.5%. Asim Warsi, vice-president for marketing mobile business at Samsung, cited data from research firm GfK to show that Samsung continues to hold the lead position in the domestic smartphone market with a volume share of 34.3% -more than double that of the next player--and value share of 35.8%.

• Android Lollipop 5.1 Makes its Debut on Android One Phones: Nexus devices are normally the first to receive Android updates, but this time it seems Google’s budget Android One devices for emerging markets might beat the company’s flagships to the punch. Google today updated its Android One website for India to indicate the devices will soon be receiving Android Lollipop 5.1. Until now, the newest version of the OS was Android 5.0.2. Android One users are coming from KitKat, so Google claims a longer battery life and doubled performance overall, but there’s no official word on what benefits users already on a previous version of Lollipop might see. Android Pit, however, reports various improvements over 5.0.2 are to come. India isn’t the only country getting the update; Android One devices are set to arrive in Indonesia with 5.1 in tow later this month, and devices in Bangladesh, Nepal and Sri Lanka will likely arrive with the newest version of the OS as well when the program expands to them.

• Tweets will return to Google searches later this year: A report from Bloomberg Business today says that Twitter has reached a deal with Google to add tweets back into Google’s search results this year. According to the report, Google previously had to crawl Twitter’s site for tweets, but now the company will provide the data directly to the search engine. As part of the new arrangement, tweets will appear in search results as soon as they’re posted. Twitter showed data in Google search results between 2009 and 2011, but it fell apart when the deal expired. It’s expected that Twitter will announce the news during its earnings call tomorrow.

• Netflix launching in Japan this fall: Get ready Japan, you’re about to spend your weekends binge watching TV shows. Netflix announced today that it will arriving in Japan this fall. In a post about the upcoming launch, the company shared some of its programming plans. The company also announced that it will be opening an office in Tokyo to better work with device manufacturers and Japanese TV and film makers. Today’s news is part of Netflix’s plan for a global rollout by the end of 2016.

• Google Buys Augmented Reality App Maker Launchpad Toys: While Google Glass might be in some sort of post-Explorer limbo, the company is dabbling in the world of augmented reality. Today, Launchpad Toys announced that it was being acquired by the search giant. While Gajillions might not be an actual number, it’s cool that the company is offering up its products for free following today’s news. One of those apps is augmented reality app for kids, TeleStory. Kids (and adults, we’re not here to judge) can create their own musical performance using the app and camera on their iOS device. If the company continues to build apps while at Google, expect an Android version in the future.