LinkedIn: India becomes second largest market

Social networking site LinkedIn's Indian user base has grown 300% in the three years it has had a marketing presence in India. The firm, today, has about 14 million users from India, which has quickly become its second-largest market globally, bigger than China and only behind the United States, according to Jeff Weiner, LinkedIn's chief executive.

Those 14 million Indian users join another 135 million-odd who are tapping into some 2 million companies and many more individuals to seek out jobs (or be sought out for one), organise conferences and network with a broad spectrum of people. On a recent trip to India to keynote his firm's B2B conference in Mumbai, Weiner-the 42-year-old former executive-in-residence, with two venture capital firms in Silicon Valley-said the firm's mobile business accounts for a fifth of its user base today, compared to 8% in January 2011.

"Mobile is our fastest-growing business," says Weiner. "LinkedIn connects talent with opportunity at a massive scale. Ultimately, our vision is to create an economic opportunity for every professional," he adds. The stage may now be set for monetisation. In February, on an earnings call after announcing the company's fourth-quarter results of 2011, Weiner had said that now that LinkedIn had got the product and user experience right, the time was ripe to test ads in the mobile environment.

India's booming mobile user base-around 700-plus million and growing rapidly-is a clear opportunity for LinkedIn. More importantly, according to estimates of GSMA, a global mobile services lobby, India is expected to become the second-largest mobile broadband market globally, with 367 million connections in four years, compared to 20-30 million today.

"The Indian market has shown a real propensity for social connectivity," says Weiner. "So, in that regard, it is not surprising." He adds that LinkedIn has been able to reach critical mass with English - unlike other markets such as China, where local language is the key to building a successful Internet business.

That may explain why India is a larger market for LinkedIn than China, where it has barely a million members. LinkedIn has also been trying to promote its B2B business. Homegrown firms such as Wipro and the Indian arm of multinationals such as Cisco, SAP and Huawei use LinkedIn as a platform to connect with employees, vendors and business partners. Weiner will be keen to press home this advantage as he seeks a stronger foothold in this market.

Unlike many other software firms that hire in the hundreds, if not thousands, LinkedIn has been flying below the radar in India. It barely has a 100 people across its offices in Mumbai, Delhi and its R&D unit in Bangalore. This number will only rise incrementally, rather than in the dozens. The strategy is not to focus on R&D (like many of its larger rivals), but on India as a market.

For the moment, the US accounts for two-thirds of LinkedIn's business and "international", including fast-growing businesses in India, account for the rest. To drive its international business, LinkedIn wants to not just increase the number of users, but also deepen its relationships with them.

For example, this February, it launched India-specific pricing for some of its recruitment products such as LinkedIn Recruiter, Jobs Network and Talent Direct. LinkedIn wants to mine the mountain of data it generates to improve the quality of its recommendations (who to connect to on the site), as well as convert its recruiting business-the firm's mainstay in India-into a more dynamic one.

Suzuki to construct new motorcycle plant in Haryana

Mumbai: Suzuki Motorcycle India (SMIPL), a subsidiary of Suzuki Motor Corporation, Japan has decided to build a new two wheeler plant at Rohtak in state of Haryana, India.

The Haryana chief minister Bhupinder Singh Hooda laid the foundation stone at the planned site.

In 2004, Suzuki Motor Corporation, Japan (SMC) had set up SMIPL for manufacturing and sales of two wheeler. SMIPL started producing two wheelers from 2006 at Gurgaon plant in Haryana state.

Two wheeler market in India has been expanding and crossed 13.4 million units in the last financial year 2011-2012.

The market is expected to further increase and SMIPL has taken an approval from Haryana Government to build an additional two wheeler and components plant by using 4 lakh land that is a part of land allotted to Maruti Suzuki India Limited (MSIL), subsidiary of SMC in India.

Planned production capacity of this plant is 5 lakh units, and the plant is expected to be completed in the year 2014. Further expansion of the plant will be planned according to the expansion of the two wheeler market in India.

In SMIPL, the product portfolio includes 2 models of scooter, 2 models of motorcycle, being produced in Gurgaon Plant and production stood at 3.5 lakh units in 2011, a 122% increase over the previous year.

HDFC Bank partners Wells Fargo for US-India remittance service

Mumbai: HDFC Bank on Monday said it had partnered Wells Fargo for remittance services between America and India. This would allow Indians residing there to remit money to their beneficiaries’ HDFC Bank savings accounts in India. Wells Fargo has 6,000 branches in the US, while HDFC has 2,544 branches in India.

“While we are a major player in the Gulf-India remittance market, this alliance will help us consolidate in the US-India sector, which has been growing exponentially. Given our reach and the web-based nature of the service, this will allow people to send money back home in one of the safest and fastest possible ways,” said Harish Engineer, executive director at HDFC Bank.

Wells Fargo has a similar partnership with ICICI Bank in India.

TCS beats $10-bn revenue mark in FY12

Mumbai: For India’s largest IT services firm Tata Consultancy Services (TCS), the fourth-quarter and annual results for financial year 2012 were about setting milestones. TCS became the first IT services company in the country to cross the $10-billion mark (according to IFRS) in revenues for the year ended March 31. By reporting a 22.6 per cent increase in its net profit on a year-on-year basis for the fourth quarter ended March, TCS gave an upbeat outlook and reiterated it was better placed to manage growth compared to its peers, especially Infosys.The better than expected numbers also put to rest some of the concerns over the demand environment for IT services.

“We have good momentum. We have a good pipeline and the traction in business is positive. We do see a good year ahead and we are sure growth for the next fiscal will be even across quarters,” said CEO & MD N Chandrasekaran. Though the company does not give any guidance, Chandrasekaran said it would do better than the Nasscom prediction of growth for the industry at 11-14 per cent.

TCS saw its revenues rise to Rs 13,259.30 crore in the quarter under review with y-o-y growth of 30.5 per cent, backed by ramping up of existing clients and steady growth of its business across major geographies.

The company’s growth during the quarter was also driven by a volume growth of 3.3 per cent. In US dollar terms, the company's revenue for the full year was $10.17 billion.

In the results announced so far by tier-1 IT services firms, TCS sounded far more bullish than Infosys and HCL Technologies on the demand environment. While both Infosys and HCL indicated discretionary spends were going to be an area of concern and already there were some project ramp-downs, the TCS management said discretionary spends had been easing since Feburary.

On a sequential quarterly basis, the company’s net profit went up marginally by 1.6 per cent and revenues grew 0.4 per cent.

"The TCS results were in line with estimates on the revenue and profit fronts. The 3.3 per cent volume growth was encouraging in a tough macro environment,” said Dipen Shah, head of fundamental research, Kotak Securities.

Margins for the quarter decreased 155 basis points (bps) to 27.7 per cent. This was largely due to the negative 71-bp impact of forex loss (Rs 125 crore) and an 11-bp fall due to offshore moves. During the quarter, the company's productivity was up 47 bps.

Rs 10,000-cr incentive package for electronics manufacture on the anvil

New Delhi: The Government is formulating a special incentive package to encourage local manufacturing of electronic goods including mobile handsets, semiconductor wafer fab, consumer electronics and telecom network equipment.

The package includes reimbursement of indirect taxes and a subsidy of 20 per cent on capital expenditure made by high-tech manufacturers in SEZ units. Investments made in non-SEZ units could get a subsidy of 25 per cent. The Ministry of Finance has agreed to the proposal with a ceiling of Rs 10,000 crore during the 12th Plan.

The subsidy element may be linked to the project outcome in a bid to ensure that companies invest in cutting edge technologies that's marketable.

For example, in the case of semiconductor wafer fab, 75 per cent of the overall subsidy could be linked to production milestones.

The incentive package was discussed on Monday at a meeting between the Department of Electronics and IT (DEITy) and the Planning Commission. A senior official told Business Line, “The Planning Commission is in favour of such a policy. It will take some more meetings to finalise the draft.”

According to top Government sources, the Department of Commerce has also concurred with the proposal, confirming compatibility to India's commitment to various international bodies including the WTO on subsidies.

In order to raise the initial corpus for the project, the DEITy has proposed to levy a cess on all electronic products sold in the country. The revenue earned from the cess will be put into the National Electronics Mission fund. According to estimates made by DEITy, the Government will end up being a net revenue earner by 2020.

The department has presented three scenarios with different production targets. If the production reaches $400 billion by 2020, then the Government subsidy will amount to $32.85 billion while the revenue accruals will be $58.52 billion according to the projections made by DEITy.

This is part of Government's efforts to boost manufacturing in the country. Over the past few months, the Government has taken a series of steps including formulating a National Policy on Electronics. The policy had made it mandatory for Government agencies to give preferential access to electronic products made in the country.

Tesco's e-tail rollout has India as its innovation hub

Mumbai: Bangalore research centre at work to marry mobile technology to offerings in diverse apps

Imagine a scenario where you are browsing through a recipe are also able to buy all the ingredients for the dish at a tab of your figure.

This is what Tesco allows its buyers to do in the UK and elsewhere with help from its India technology centre. The application (app) for the iPad has been developed by the UK retailer’s India captive unit based out of Bangalore.

Tesco Hindustan Service Centre, is helping the world’s third largest and Britian’s leading retailer in going global with its e-commerce roll-out. After successfully running its e-commerce site in the UK, the retailer is now planning to take its online stores to other regions. The first successful roll out of its online grocery shopping services outside the UK happened in the Czech Republic.

The technology team from Tesco HSC based out of Bangalore is a part of Tesco’s online foray. The team has developed the online platform that supports 25 countries and allows shoppers to browse the site in multiple languages.

“The user response has been excellent. It is one of the five most visited retail websites and on average processes 500,000 orders a week across its online businesses. With the demographic of the buyer changing, we now need to fulfil the customer expectation and reach out to various touch points,” said Sandeep Dhar, CEO of Tesco HSC.

For Tesco, its online and mobile foray is crucial as it increases revenue via online services. According to the 2010-11 annual report, online sales grew 15 per cent. More, 12 per cent of customer traffic to the tesco.com site is coming via the mobile-based grocery app.

Last year, the Bangalore-based team produced an online application called Click & Collect, that allows customers to collect rather than wait for the delivery.

“We found customers wanted flexibility even when they shop online. Based on customer feedback, we launched our Click & Collect services. Customers can browse and select their items and place the order online. The order is put together and kept ready for collection by the customer at a defined store location; the customer can simply drive in and collect the shopping and be on their way,” explains Dhar.

While this might sound simple, the Bangalore-based team was responsible for every detail of the Click & Collect platform. Some key challenges include a single core code base to support multiple (25) countries, ability for the platform to serve more than one country from a single deployed instance, allow customers to browse the site in multiple languages, allow for the site to be hosted across multiple data centres, be flexible enough to support variations in business processes, and product data and legal/compliance requirements of each country.

“We have come up with a unique architect for the online platform. It works just like an application store. You can use the App store to download an application to enhance the iPhone usage. We have used a similar concept but on the server side and we call it ‘internal AppStore’. We have created an internal suite of applications, which can be part of the platform, depending on the country it is being rolled out in and the customer experience that Tesco’s local arm in that region wants to give customers,” said Dhar.

By bringing in a plug-and-play format to the server and application side, Dhar and his team do not need to reprogramme the applications each time, thus reducing the time of deployment.

Tesco HSC’s overall headcount is 6,300. Of this, a team of 500 employees work on the online solutions and mobile platform. About 75 per cent of Tesco’s IT core sits in Tesco HSC that includes- infrastructure management, application support and development of architecture. The HSC team support 14 operations in countries — the UK, Ireland, America, Korea, China, Japan, Malaysia, Thailand, Turkey, Poland, Hungary, Slovakia, Czech Republic and India.

Mobile is another big focus for the Bangalore team. They have also developed applications for both Apple’s AppStore and for Android. Its mobile shopping application has seen half a million downloads so far.

One application the team is working on is a voice-based search app.

“Instead of you typing the product’s name and searching for it on Tesco’s website, buyers will be able to just speak out the product and get the various options. For instance, one can just say milk and the application will list out the variety of milk brands to choose from. We are still working on the voice accuracy. We also intend to roll this cout in at least eight-nine languages,” said Dhar.

Hospitality sector upbeat on domestic tourist flow

Mumbai: Notwithstanding the increase in rates of tour packages and high air ticket prices, hospitality players are upbeat about the summer tourist season.

Occupancy levels have been stable and demand from domestic travellers has seen a steady increase, say industry players.

“The hotel industry in India is on a growth trajectory. We feel that demand in the market has kept pace with incoming supply. Occupancy levels pan-industry, including Taj Hotels, are either at the same levels as last year owing to increase in supply or have improved in certain key destinations,” said Ms Deepa Harris, Senior Vice-President, Sales and Marketing, Taj Group of Hotels.

According to Crisil Research, occupancy levels are expected to scale back to the pre-crisis levels and are expected to touch 65 per cent by 2014. A steady rise in domestic tourist spending has also brought cheer to the industry with a 13.7 per cent compound annual growth rate (CAGR) from 2010 to 2012, according to a report by World Travel and Tourism Council.

The country had 740 million domestic travellers across segments in 2011 and the figure is set to grow. Younger demographics of the travellers and their changing preferences have opened many opportunities for the hospitality sector. For example, recently Vivanta by Taj opened its new hotel at Bekal in Kerala and Srinagar, which are some of the emerging destinations for the Indian holiday goers.

“Shorter duration of holidays is a trend observed during summer travel. However, occupancy levels in hill stations and popular summer destinations such as Goa are 100 per cent for the season,” said Mr Manmeet Ahluwalia of Expedia – India, travel portal.

Occupancy levels
Hotel Leela has seen steady occupancy level at its hotels in Goa, Udaipur and Kovalam. The group is upbeat about its recently renovated Goa property. “This summer, we are looking to boost our revenues from the Goa property by 25 per cent over last year,” said Mr Sanjoy Pasricha, Vice-President, Sales and Marketing, The Leela Palaces, Hotels and Resorts. Yatra.com also expects tourist traffic at popular summer destinations to grow. “The economy is positive and the domestic market is very receptive,” said Mr Pratik Mazumder, Head Marketing, Strategic Alliance at Yatra.com.

On inbound travel segment, hospitality industry experts say that as compared to the situation in Europe and US, economic activity in India has not decreased drastically. This has sustained international business travel into the county, albeit with compromises on hotel spends. “The western economies are yet to see recovery. With a partial positive mood in the US economy and the concurrent pressure on European economies, the travel and tourism sector is seeing reduced spends,” Mr Dipak Haksar, COO, ITC Hotels.

ISRO plans biggest ever spacecraft by 2014

Bangalore: ISRO plans to launch its biggest ever spacecraft, the 5,000-kg GSAT-11, by 2014.

The advanced communication satellite, GSAT-11, will be double the capacity and size of the present buses, and will be built over the next two years.

GSAT-11 will have 32 transponders in the Ka and Ku bands, ISRO's just-released annual report for 2011-12, has revealed.

ISRO is banking on this large, one-shot boost to its flagging capacity. Only half of its present capacity — or 80 transponders — comes from its fleet of INSAT /GSAT communications satellites. The rest are leased on foreign satellites.

The present capacity of 175 transponders is around half of its requirement. It has been looking around to fill it. To date, GSAT-8 is the biggest national craft to be built. The 3,600-kg piece was launched by a European Ariane rocket last May.

Formal approval
Mr S. Satish, ISRO's spokesman, said the spacecraft proposal was due for formal approval. He said the 5k advanced craft would go up on a ‘procured' or outside launch. ISRO has traditionally used European Ariane launchers to put its larger satellites into orbit.

A normal 2-3k satellite costs around Rs 200 crore to assemble; and around the same for launch. For GSAT-11 and its launch, it could be an estimated Rs 700-800 crore.

“Subsystem level preliminary design review has been completed. The qualification programme for all new elements onboard GSAT-11 has been initiated,” the report says.

ISRO's medium-lift rocket under development, the GSLV, can launch up to 2,000-kg satellites into the middle-earth orbits that are suited for communication satellites — 36,000 km up above the earth.

The rocket is being perfected and has yet to be put fully in service. The GSLV MkIII, meant to lift heavier satellites of 4-6 tonne, looks far from GSAT-11's schedule.

Upcoming satellites would be a mix of 1k, 2k and 3k satellites, so that smaller ones like the 1,400-kg GSAT-12 can be launched quickly on the PSLV, he said.

Shantha Bio's project among 22 FDI proposals cleared

New Delhi: A Rs 514-crore proposal by Shantha Biotechnics for setting up a brownfield bio-genetics project was among the 22 foreign direct investment (FDI) proposals worth Rs 586.13 crore cleared on Friday by the Foreign Investment Promotion Board. Among other proposals which got approval for FDI infusion include Bhushan Steel's rights issue worth Rs 8.17 crore and Mahindra and Mahindra's Rs 25.99-crore proposal to set up a joint venture to develop, manufacture and provide service support for radar systems and various kind of defence electronics systems. FIPB also approved Ashok Leyland Defence Systems' proposal to undertake defence related activities. The proposal will see a FDI infusion of Rs 10 crore. Additionally, publisher Springer Editorial Service is looking to increase its foreign equity up to 100 per cent to carry on the business of publishing services. It is looking at an equity infusion of Rs 12.87 crore. At least 18 proposals were deferred on various grounds, while five proposals have been rejected.

Indonesia looks to Indian investments beyond natural resources

Chennai: Indonesia is keen on attracting Indian investments in manufacturing and value added processing than just in exploitation of its natural resources, according to Mr Andi M. Ghalib, the Indonesian Ambassador to India.

The trade between the two countries had reached about $20 billion in 2011-12 against about $13 billion two years earlier.

This growth has encouraged Indonesia to hike the targeted growth in bilateral trade to $45 billion against $25 billion previously. The target had been revised last month, he said.

The Indonesian national carrier, Garuda, is set to launch direct flights to India from June.

The Indonesian embassy here has suggested that the carrier link the four major metropolitan cities – Delhi, Kolkata, Mumbai and Chennai.

Indonesia's exports to India was $11 billion primarily based on natural resources such as coal, crude palm oil, wood, rubber, gold and copper.

Value addition
Indonesia had hiked the levy on coal mined by foreign companies there to benchmark Indonesian coal price to international market prices and to promote investments in value addition and manufacturing sector, he said.

According to Mr Leonard F. Hutabarat, Counsellor, Embassy of Indonesia, when companies invest in value addition the levy is lower.

For instance, taxes for a company sourcing crude palm oil will be halved if it sets up a refinery in Indonesia. The same applies to other resources like coal.

This follows demands by local governments in Indonesia that saw no economic benefit in foreign companies exploiting their natural resources.

Investments in factories in Indonesia will generate jobs and support the local economy, he said.

Trade delegation
Next month the Embassy has organised a 40-50 member trade delegation of potential Indian investors to Indonesia to showcase the business opportunities there. Representatives from agriculture, plantation, textiles, telecom, education and IT sectors were on the delegation, he said.

India and Indonesia, the second and third largest economies in Asia after China, have signed 33 agreements to promote trade.

They are also partners through the free trade agreement signed by the Association of South East Asian Nations.

This is the ideal time to promote investments between the two countries, the Ambassador said.