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Business News/ Mint-lounge / Mint-on-sunday/  Jabong sale, Facebook results and Hillary Clinton’s nomination
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Jabong sale, Facebook results and Hillary Clinton’s nomination

Flipkart adds Jabong to its fashion stable; ad revenue boosts Facebook; and Clinton makes history with Democratic nomination

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1. Flipkart buys Jabong through Myntra

The latest round of battle for supremacy in India’s e-commerce segment has gone to Flipkart, which is facing stiff competition from global giant Amazon. Flipkart has consolidated its position in the fashion segment by acquiring Jabong through its subsidiary Myntra by paying $70 million. According to media reports, Flipkart beat Sanpdeal in buying the competitor. It was the backing by Flipkart’s investor Tiger Global to push for the deal despite potential legal issues vis-à-vis Jabong’s governance which turned the tables in Flipkart’s favour and also allowed it to settle for a lower price. Fashion offers much higher margins than categories such as mobile phones and books, and is expected to overtake consumer electronics as the largest category at 35% of the $60 billion Indian online retail market by 2020.

2. Bezwada Wilson wins Magsaysay Award

Bezwada Wilson, national convener of the Safai Karmchari Aandolan, is one of the six recipients of the prestigious Ramon Magsaysay Award for 2016. Wilson has been conferred the honour for his struggle to put an end to the inhuman practice of manual scavenging which persists despite there being a law against it. According to the findings of the socioeconomic caste census, there are more than 168,000 manual scavenger households in India, with Maharashtra No. 1 on the list. Wilson’s organization has estimated the number of people engaged in this profession at around 200,000, while it has liberated some 300,000 out of the demeaning profession.

3. Facebook June quarter results beat estimates

Riding on increased advertisement revenues and better business through mobiles, Facebook beat Wall Street estimates for its results for the three months ended 30 June. With a base of 1.7 billion monthly active users, 15% year-on-year increase, its total revenue increased to $6.44 billion, beating the estimated figure of $6.02 billion. Mobile advertising revenue accounted for 84% of the company’s total advertising revenue, compared with 76% a year earlier. The company’s shares jumped to their highest level since it went public in 2012.

4. Yahoo to sell its Internet business

More than 10 years after losing its supremacy to Google, Yahoo Inc. will be selling its web assets to Verizon Communications Inc. for $4.83 billion. The deal includes Yahoo real estate, but excludes some intellectual property. Yahoo will be left with its stakes in Alibaba Group Holding Ltd and Yahoo Japan Corp., with a combined market value of about $40 billion. Such a decision had been on the horizon for a long time, as efforts by CEO Marissa Mayer to revive the one-time Internet giant did not yield results. In 2008, Microsoft Corp. had offered to buy the company at $45 billion. The company is worth $38 billion including its valuable Asian assets today.

5. Japan announces $265 billion stimulus package

In yet another effort to fight a quarter-century-long depression amid an eminent export squeeze owing to Brexit, Japanese Prime Minister Shinzo Abe announced a surprisingly large package of $265 billion, albeit with few details. The IMF economic outlook released this month has predicted further decline for growth rate figures in Japan. The package is nearly 6% of the size of the Japanese economy. While experts have expressed doubts that the entire money would be spent in one extra budget and suggested staggered spending, the move was seen as putting pressure on the Bank of Japan to ease policy and increase the purchase of government debt. On Friday, the BoJ expanded stimulus by doubling purchases of exchange-traded funds (ETFs), but disappointed investors who had set their hearts on more audacious measures

6. India’s taxi wars see a new surge

The conflict between old and new in India’s taxi market is showing no signs of dying down. Up in arms against app-based aggregators such as Ola and Uber, more than 100,000 auto-rickshaw and taxi operators went on strike in Delhi, demanding that the government ban the former. The Delhi government has already written to the centre to ban app-based taxi services for not having required permissions. Similar protests have been happening in cities such as Mumbai and Bengaluru. While the unions are alleging the use of cost-cutting to eliminate competition, many drivers of Ola and Uber are highlighting regular earnings and the eradication of middlemen to hail the churn in the industry.

7. Bright prospects for digital payments in India

Non-cash transactions will exceed cash transactions in the Indian economy by 2023, according to a report by Google (Alphabet Inc.) and Boston Consultancy Group. The size of cash payments is expected to touch $500 billion by 2020, according to the report. Growing Internet and smartphone penetration and progressive regulations would lead the change. Convenience has emerged as the most important factor that is driving this growth, followed by availability of offers, while opting for digital payment methods, the report noted, adding that Indian consumers are 90% as likely to use digital payments for both online and offline transactions. There is still a lot of scope for ensuring universal acceptance of non-cash payments, with India lagging behind others in number of POS terminals per thousand debit cards.

8. Domestic airline industry posts double-digit growth

The number of domestic air travellers increased by more than 20% in the June quarter on a year-on-year basis, underlining the buoyancy in India’s aviation market. Both private players as well as state-owned Air India posted a handsome growth in passenger traffic. IndiGo had 37.9% of the market share—equal to the combined market share of Air India (15.5%), Jet Airways group (19.1%) and Vistara (2.8%). SpiceJet led the occupancy charts with a score of 93%. As the industry enters a lean season, airlines have cut down fares by as much as 30% to attract customers.

9. Hillary secures Democratic Party nomination

Hillary Clinton is the Democratic Party’s official candidate for the race to White House. Clinton became the first woman from a major political party in the US to run for the presidency after the Democratic convention in Philadelphia. She will take on Republican Party nominee Donald Trump, who once again courted controversy by asking for Russian support to hack her emails. While Clinton continues to maintain a narrow lead over Trump in the popularity charts, the final outcome is anybody’s guess given the close contest and speculations about a drift in the Democratic camp owing to the disgruntled supporters of Bernie Sanders.

10. Erdogan seeks vengeance after failed coup

After surviving a failed coup attempt, Turkish President Recep Tayyip Erdogan’s regime continues to clamp down on civil liberties and opponents real and imaginary. After putting restrictions on media outlets, schools and universities, Erdogan began a purge of the military by dishonourably discharging 40% of the admirals and generals. While civil society groups have decried the clampdown, global leaders have been cautious in reacting. German Chancellor Angela Markel called for restraint by Turkey while recognizing its right to take action against the rebels. In response to Turkey’s demand for the extradition of Islamic cleric Fethullah Gulen, who has been accused of masterminding the coup attempt, the US has asked for concrete evidence.

Graphics by Ajay Negi.

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Published: 30 Jul 2016, 11:16 PM IST
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