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January 4, 2018

didi to acquire 99, declares war on uber


 
The war between Didi and Uber is set to escalate and intensify with the Chinese ride hailing app set to acquire acquire 99, one of Latin America’s major ride-hailing companies.This acquisition is set to increase Didi's dominance across Uber's strongholds and beyond Didi's traditional market, -mainland china despite both of them being funded by the same tech giant SoftBank.Late last month SoftBank had bought a sizable stake in Uber at a significant discount, after investors and employees put shares equal to about 20% of the company up for sale,according to the the Wall Street Journal.Founded in 2013, the South American the app based taxi hailing ride 99 has been Uber’s fiercest competitor in Brazil, the most populous country in Latin America.Sao Paulo and Rio de Janeiro are Uber’s two busiest cities in the world as ranked by the number of trips that take place there according to Bloomberg. 


Like Didi, 99  originated as an app for hailing existing municipal taxis, before venturing out into private ride-hailing. In January 2017, the company scored a $100 million investment from Didi, and in March secured an additional $100 million from Japan’s SoftBank the first time.Now it seems that Didi is buying the Brazilian ridesharing startup, in a deal that values 99 at $1 billion.In case this is true, it would seem like a full blown war between Uber and Didi inspite of being funded by the same parent company Softbank.Didi currently is said to have over  more than 450-million users on its platform and handles more than 25million rides per day. Post acquisition of 99, Didi will have access to  14-million registered users in Brazil as it pushes into the growing Latin American car-share market.

However it would be too early to say if this will be an all-out acquisition or a matter of Didi taking a controlling (but not fully acquired) share. An all-out acquisition would be an aggressive, turn for Didi, which has traditionally mostly focused on investing in comparable regional startups rather than buying them outright. Other ridesharing companies that Didi has invested in include Grab in Southeast Asia, and Careem in the Middle East.Didi has not disclosed the terms of the 99 acquisition, but the New York Times reported the deal  to be worth around $600 million. 

If this is true it marks the clearest sign yet that Didi will not stay confined to China and will actively aid and directly compete with Uber’s rivals across the globe.According to quartz which reported the deal weeks ago before it was finalised, some Didi employees had relocated to Brazil to help 99 launch in new cities. 

The regional growth strategy of the Chinese ride hailing app also appears to align with Didi’s own global interests. Just last month, the company was reported to be planning an entry into Mexico alongside expansions in its Asian home market, most recently expanding into Taiwan through a franchising model. The acquisition  is a reminder to the fact that Uber and Didi have not yet reached a proper truce and seems to be fighting for increasing dominance. In August 2016, the two companies ended their rivalry in mainland China when Didi acquired Uber’s operations while investing $1 billion in Uber’s global business. In exchange, Uber took a roughly 17% stake in Didi.Meanwhile Didi currently has international tie ups and partnerships with over seven "major international players", serving more than 1,000 cities worldwide, including Southeast Asia’s Grab, India’s Ola, US-based Lyft and Europe’s Taxify.


flipkart vs amazon : who is burning more cash

flipkart vs amazon : who is burning more cash"

Indian Ecommerce biggest Players and registered users


 
Cash burning by indian ecommerce start ups have witnessed a new record.During the Holiday season between September and December, the cash burn—the amount companies spend to run their businesses—is reached up to $400 million, according to research firm RedSeer Consulting.

Flipkart, whose cash reserves have gone up to more than $4 billion after SoftBank, Tencent Holdings and eBay put around $2.8 billion into the company in 2017 , thinks now that profitability is not the highest priority right now and its more about creating a marketshare.Flipkart’s CEO Kalyan Krishnamurthy said Amazon India’s cash burn has been three times higher than that the Indian ecommerce giant,and despite the massive spending,Flipkart was ahead of Amazon. Krishnamurthy, who took over the reins as the online retailer’s chief executive a year ago, told TOI in an interview that Flipkart was the most disciplined consumer internet company in the country, having brought down its cash burn by 50% in the last year. 

Generally Festive season sales make for a huge share of the total annual sales in segments like apparel, consumer goods, and home decor. So companies go on massive advertising spends during this time in the name of great indian shopping festivals.

Earlier, Flipkart had halved its monthly spend to USD 20 million from USD 45 million and also succeeded in raising its biggest-ever funding round of $2.5 billion.Flipkart's monthly cash burn right now is about Rs 260 crore ($40 million).Compared to that  Amazon India is losing about Rs 600 crore per month as it eyes market leadership.

So where does the cash go?A bulk of it goes on discounts as Indians are among the most price sensitive when it comes to ecommerce .In India massive discounting have been key to garnering volumes when it comes to online shopping. According to a recent report by Goldman Sachs, 30% of an Indian e-commerce company’s expenses go towards discounts.

Another significant change has been the " changing customer demographics and the emphasis in penetrating the tier 2 cities.In 2017 tier-II becoming a more important share as a part of the total customer base)…E-tailers are more dependent on third-party logistics players for delivery (to tier II areas) which adds to the overall expenses” 

The one area where spending is seen flat or marginally lower this year is advertising. For companies are now increasingly spending on low-cost channels such as digital marketing.Amazon is believed to have spent almost $1billion last year in India after launching its popular subscription service Prime at a discounted rate, which offers faster delivery and a digital entertainment platform. Amazon registered its highest international losses ever at $936 million for the quarter ending September 30 last year, largely due to India spends. 

According to Flipkart CEO “Its competitors are burning 2.5-3 times more money than us. I don’t even know how they get by with this. Despite that, we stand at least 40-50% bigger than the second player in the market,” he said, directly taking on Amazon, which has spent more than $2 billion in India since starting operations here in 2013.

However the question that needs to be asked to Mr Krishnamurthy of Flipkart is why did it take the company till its recent funding to understand the importance of increasing its marketshare rather than focus on profitability “Few months ago, Flipkart was not talking like this. The reason is, they have excessive funds now and it is in direct competition with Amazon. By burning more cash they want to retain more market share, said Satish Meena, forecast analyst at Forrester Research to Entrackr."However he added "Excessive burn will not give kind of scale you are looking for. Because there is time factor for consumers as well. Flipkart should invest more in infra and generate customer loyalties" 

According to a report from Quartz  Flipkart prior to the funding coming in,  had reduced its monthly burn to about $20 million last year, but increased its spends during the festive season discounting in categories like smartphone to shore up sales. “We did a lot of work in 2017 to reduce the burn, which is at a very healthy level. We are not going to do anything drastic to cut down on anything else to optimise on burn,” Krishnamurthy said. But profitability is not something the company is actively looking at this year. 

Meanwhile The world’s largest e-commerce firm Amazon has attacked Bangalore based research firm RedSeer Consulting on its India ecommerce sale rankings which have shown that Flipkart led the last week’s 5-day festive sales with a 58 percent market share in the gross merchandise value of goods sold. 

The RedSeer report further said that Amazon India saw a decline in market share during the annual festive sales worth USD 1.5 billion this month to 26 percent from last year’s share of about 32 percent. “We have noticed poorly informed speculative reports with irrelevant sample sizes whose numbers do not add up to what we are seeing in the industry. We continue to be the fastest growing e-commerce marketplace in India, including key categories such as smartphones, large appliances, fashion and more,” an Amazon India spokesperson commented upon the RedSeer’s market share report 

The Indian e-commerce market, which has 20 million monthly active customers, is expected to grow 2.5 times this year on the back of categories other than smartphones.However indian ecommerce companies needs to come out of this " obsession with marketshare" very soon and show investors  a truly sustaining model that is based on a strong revenue model based on the ability to make money for investors. Flipkart bears daily losses of over Rs 14 crore in the last financial year as it fought to stave off competition from arch-rival Amazon in one of the world’s fastest growing markets for online retail. The company spent aggressively to attract talent and customers thereby increasing losses.





India cryptocurrency registrations exceeds 20 days waiting period


 
The Indian craze for Cryptocurrency seems to have just started. A latest report from Timesofindia reports  that Cryptocurrency exchange platforms in India have a huge backlog of potential users waiting to be verified for registration. Waiting periods have gone up from a week to 20 days.The prices of digital currencies like Bitcoin, Ripple, and Litecoin have surged over the past year, encouraging many to get into the trading of these currencies. 

Bengaluru-based Unocoin used to see 1,000 registrations a day in December 2016. Last month, it averaged 10,000 registrations a day. Its overall user base is now close to 10 million. 

Meanwhile Coinsecure, one of India's India's fastest 24/7Realtime Bitcoin Trading Platform ha s a message on its website warning users that their KYC (know your customer) process will take time. It is getting around 4,000 registrations a day. The platform has disabled its payment gateway to stop users from paying money before verification. Unocoin, too, has warned users about delays. 

Others like ZebPay are seeing a similar surge in user registrations and transactions. ZebPay has touched 2 million users.  While Unocoin in September announced a partnership with Purse.io to offer discounts on India’s Amazon branch, Coinsecure’s BitPay deal has contributed to the latter’s market presence in Asia rocketing by 388%.

A person can invest in bitcoins for as low as Rs 1,000.Once one logs into the website of a cryptocurrency exchange platform, the platform verifies the details of the user. The funds are then transferred and a digital wallet is created for the user to store the bitcoins. Currently, the price of one bitcoin is Rs 10 lakh, but at its peak last month, it was being sold for as high as Rs 19 lakh. India is quickly progressing in Bitcoin adoption and among one of the fastest growing market when it comes to cyrptocurency adoption. It currently ranks among the top 20 nations for Bitcoin use.

The Value of the Bitcoin crossed $19,000 in December last year. As of , January 2, 2018, the value of the Bitcoin converted to Indian National Rupees by Google was a whooping Rs 8,51,073.40. Competition among local startups is heating up, too. The country’s considerable mobile penetration has given rise to tools such as mobile money services.

On the other hand India’s central bank have made it amply clear they aren’t comfortable with virtual currencies. The recent spike in bitcoin’s value, which attracted hordes of investors, has only made the government more vociferous in its criticism.However, these announcements don’t make these virtual currencies, or trading in them, against the law.So, their status is in a curious limbo—they’re neither legal nor illegal in India and that has added to the confusion.

On Nov. 30, 2017, when investor frenzy was at a high with rising bitcoin prices, finance minister Arun Jaitley said the country doesn’t recognise cryptocurrencies as legal tender. Almost a month later, the government cautioned people against investing in them, warning that they are similar to fraudulent investment schemes and have no legal status yet. “There is a real and heightened risk of (an) investment bubble (in virtual currencies) of the type seen in ponzi schemes which can result in (a) sudden and prolonged crash exposing investors, especially retail consumers, losing their hard-earned money,” the finance ministry said in a notification on Dec. 29, 2017. “Consumers need to be alert and extremely cautious as to avoid getting trapped in such ponzi schemes.


Observers predict that India’s government will regulate Bitcoin in stages even though presently the Indian government does not allows cryptocurrency as a legal tender. However India’s Bitcoin industry is optimistic about the fact that in the foreseeable future government acceptance will give the cryptocurrency the backing it needs. In fact, India’s Bitcoin industry has long tried to popularize Bitcoin with strategies that include conducting security checks, requesting identification from users, such as government-verified address documents, Permanent Account Numbers (PAN) or Aadhaar IDs, and sometimes even checking bank details. Private Bitcoin companies have also launched an association, called the Digital Assets and Blockchain Foundation India (BFI), to educate lay people on Bitcoin benefits and usage.

January 3, 2018

google local now showing third party listings

"google  local integrates third party listings"
Google local integrating third party listings 

According to searchenginewatch Google has been spotted integrating reviews from third party sources in the Knowledge Graph cards for Google My Business listings. Third party reviews from sites like TripAdvisor have been showing up in Knowledge Graph cards for hotels and resorts. These are included along with reviews left directly on Google.

However this update is different from the other update this year which saw Google aggregating reviews from third party sites within the “Reviews” tab. Third party reviews are now appearing after clicking on “View all reviews,” which is somewhere they weren’t appearing previously.The third party reviews include full text as well as the source where they were originally published.However if the full text of a third party review doesn’t match, then there will be a link to read in full at the original source. In addition, reviews can also be filtered by source by clicking on the “All reviews” drop down menu. Choices include Google, Expedia, Booking.com, Agoda, and Hotels.com.

Google has also made a number of notable updates to its Schema guidelines with respect to how local businesses can markup the reviews they receive. Google has also disallowed a few practices that were once considered normal for local searches.

 For example, businesses used to be able to add markup to reviews received from third-party sites, but that is now no longer the case. According to latest schema update , it’s OK to include third-party reviews on your website, as long as they are not marked up with Schema. From now on, Google wants to see Schema markup only on reviews “that have been directly produced by your site.” If the exact same review has been syndicated elsewhere, marking it up with Schema will now be a violation of Google’s guidelines.Among some of the things you need to keep in mind when you are optimising local searches are 

1)Aggregators or content providers must have no commercial agreements paid or otherwise with businesses to provide reviews. 
2)Snippets must not be written or provided by the business or content provider unless they are genuine, independent, and unpaid editorial reviews.
3)Do not include reviews that are duplicate or similar reviews across many businesses or from different sources. Only include reviews that have been directly produced by your site, not reviews from third- party sites or syndicated reviews.




how google evaded $19 billion in taxes


Alphabet Inc's Google moved $19.2 billion to a Bermuda shell company in 2016, regulatory filings in the Netherlands show -- saving the company billions of dollars in taxes that year. Tech companies like Google Apple and Microsoft have for a long time balked at the 35% corporate tax the current tax code requires them to pay on worldwide profits returned to the U.S and often used complex financial methods to circumvent and avoid paying taxes, Most technology companies have parked as much of their profit as possible in overseas subsidiaries in countries like Bermuda and Ireland, where tax rates are low. Google used two structures, known as a "Double Irish" and a "Dutch Sandwich," to shield the majority of its international profits from taxation

The setup involves shifting revenue from one Irish subsidiary to a Dutch company with no employees, and then on to a Bermuda mailbox owned by another Ireland registered company.The amount of money Google moved through this tax structure in 2016 was 7 percent higher than the year before, according to company filings with the Dutch Chamber of Commerce dated Dec. 22 and which were made available online Tuesday. News of the filings was first reported by the Dutch newspaper Het Financieele Dagblad.

Zion Research Group estimates that U.S. companies in general have $2.8 trillion in profits parked in overseas affiliates.Meanwhile the big tech companies have increased their lobbying efforts on tax policy. The Big 5 tech companies increased their lobbying spending in the third quarter of 2017 (the last reporting period) by a collective 24.3% compared to the same quarter in 2016. Microsoft alone had 81 lobbyists from 16 different firms (and Amazon had 64 lobbyists) working for them to influence Congress specifically on tax issues in the first three quarters of 2017, according to Public Citizennbsp;


According to Wired US companies overall are stashing $1.17 trillion offshore and about half of that ($462 billion) is tech company dough. If they paid 30 percent on those earnings, same as you do, they’d be able to completely fund California K-12 public schools for almost two years.The Big 5 tech companies–Apple, Alphabet, Amazon, Facebook, and Microsoft–currently have a combined $457 billion held in overseas subsidiaries. Apple holds more profits overseas than any other company, with Microsoft closely following.