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Thursday, September 15, 2011

In India, online retailers take a new tack



Several months ago, when Prabhu Kumar could not find a book he wanted in bookstores here, he found it online at Amazon.com for $10. But he had to pay more than $9 in fees to have Amazon ship it to him.

Mr. Kumar, a software programmer, said he would not be doing that again. He now shops on India's answer to Amazon -- FlipKart.com -- which delivers books, phones and other items in as little as 24 hours at no extra cost. Mr. Kumar doesn't have to pay FlipKart a single rupee until a courier bearing his books arrives at his door. He can then hand over cash or a credit card.

"I think it perfectly fits the Indian mentality," Mr. Kumar said.

While dozens of electronic commerce firms have recently sprung up to capitalize on India's growing Internet use, they have a problem. Indians are not yet comfortable with shopping on the Web. Many of them remain unwilling to use credit cards online. So the Indian retailers have gone to great lengths to gain customers. Customers may pay in cash on delivery, and the company fields delivery squads to ensure shipments get to customers quickly.

One recent afternoon, four FlipKart delivery men loitered at a bungalow in the Koramangala section of Bangalore where the company started. When a small delivery van arrived from the company's warehouse, the men rushed to take out two large duffel bags filled with packages that they put onto two tables in the house.

After scanning the packages with hand-held computers, they put the boxes into large backpacks, which they carried on their backs as they rode off on motorcycles to deliver them.

Online sales still make up a small portion of overall retail spending -- one estimate pegs it at $10 billion, a tiny fraction of India's $500 billion retail market -- but they are growing fast.

FlipKart says it had revenue of 500 million rupees ($11 million) in its last fiscal year, and is now clocking sales of about 10 million rupees a day. SnapDeal.com, a coupon and deals site similar to Groupon, expects sales of 1.5 billion rupees this year, up from almost nothing the year before. The top executives of the Future Group, India's largest retail company, says its daily online sales are on pace to triple between now and March.

"This time it is for real," said Kishore Biyani, the founder and chief executive of the Future Group, referring to an earlier wave of e-commerce euphoria in the early 2000s. "This is the biggest thing to happen in India."

That rapid growth has drawn the attention of venture capitalists who poured $183 million into 20 e-commerce firms in the last 12 months, up from $61 million for 13 firms in the previous 12 months, according to Venture Intelligence, a research firm.

The rapid growth has also attracted the notice of American online retailers. Amazon, which has a software development office in Bangalore, is now building a warehouse and hiring employees for an Indian site, according to two industry officials. And earlier this year, Groupon bought an Indian Web site, SoSasta.com.

But, like in frothy Silicon Valley, some Indian analysts and investors are starting to question the frenzied deal-making. These skeptics find it difficult to justify the high prices venture capitalists are paying to invest in unprofitable Indian e-commerce firms. For instance, VCCircle, a news site, recently reported that FlipKart may soon raise $150 million, which would give it a $1 billion valuation. (Executives at the company declined to discuss its financial plans.)

India has 50 million to 100 million Internet users, according to various analysts, and the number is growing by about 30 percent a year. JuxtConsult, a New Delhi-based research firm, estimates that 17 million people bought something online this year, up from 10 million last year. The Indian government estimates that household consumption has increased by more than two-thirds in the last five years, and most of that increase has come in the purchase of nonfood items.

"It seems to be more for real than a flash in the pan," said Kanwaljit Singh, who is a senior managing director at Helion Advisors, which has invested in about a half-dozen Indian e-commerce sites, including MakeMyTrip.

But capitalizing on India's growth online will not be easy. Sachin Bansal and Binny Bansal (who are not related), the founders of FlipKart, have had to do things that their American or European counterparts would never have. They have set up delivery operations in 13 big Indian cities like Bangalore, Mumbai and New Delhi because Indian shippers do not have the delivery and package-tracking abilities that FedEx and U.P.S. provide for its American customers. They plan to expand FlipKart's delivery network to 25 cities within a year.

Sachin Bansal, the company's chief executive, said that by having its own staff, FlipKart avoids paying courier services' commissions of more than 2 percent to accept cash on delivery, which make up about 60 percent of its orders. It can also track packages more accurately. And because labor costs are relatively low in India, its delivery cost is a modest $1 a package.

"More than 90 percent of retail transactions in India are in cash," Mr. Bansal said. "People like my dad and my uncle, they are much more comfortable with cash. If we have to increase our customer base, we have to accept cash."

FlipKart is not alone in tweaking its model to suit Indian conditions. Myntra, an online retailer of clothes, has a delivery staff in Bangalore and plans to hire couriers in other cities. SnapDeal offers customers the option of making partial payments online and paying the balance to merchants whose products and services it sells, said Kunal Bahl, a co-founder of the service.

Consumers and suppliers laud FlipKart's service and execution. But they expect the company to soon face greater competition, especially if Amazon starts an Indian operation. "Today they are the best," said Ananth Padmanabhan, vice president for sales at Penguin India. But, he asked, "if Amazon comes here next month, and they might, what will FlipKart do?"

An Amazon spokesman, Craig Berman, declined to comment on the company's plans for India, but Mr. Padmanabhan said Amazon officials have been holding talks with publishers, and another industry official said the retailer has begun hiring employees for an Indian site.

The Bansals say they are prepared for competition from Amazon. Sachin Bansal, who worked with Binny Bansal as a software developer at Amazon before starting FlipKart, brushed aside a suggestion that the firm would make for an easy acquisition by Amazon.

"We are very keen on going our own way," he said. "The opportunity is so large that we would want to grow it to a much bigger level before we think of anything."

Word Games Anytime, No Travel Tiles Required



If the inventor of Scrabble were alive today, he would be amazed by the way millions of people are playing his word game now: on tiny screens, wherever they happen to be, against players who can be halfway across the country, or the world.

Scrabble first proved that it did not need the actual click of tiles against a board when it became popular on computers around two decades ago. Now, the game has migrated to smartphones, both through the trademarked game and a similar game called Words With Friends.

In fact, Words With Friends, owned by Zynga, has stolen some of Scrabble s thunder with its digital-only word formation game. Ten million people have downloaded the iPhone app so far, Zynga says, and it went live on Android systems this month.

Solitaire Scrabble is an option on computer and phones, but many players prefer a human opponent. Both mobile Scrabble and Words With Friends allow social interaction through turn-based play and a chat feature. It feels like I m talking to my friends through the games I m playing with them, said Paul Bettner, who developed Words With Friends in 2009 along with his brother David.

Over the phone, games can take days or even weeks to play out, so people often have several games going at once. (Can you cheat? The answer is yes.)

To add more drama to a game that is prone to pauses, the Bettners increased the scores on some letters a C is four points instead of three, for example, and a J is 10 instead of 8.

They also pushed the double- and triple-count squares closer together so that big word scores were more likely. What ends up happening is you have these moments that are more explosive, Paul Bettner said. Incidentally, making the point values and board layout different from those of Scrabble avoids any legal trouble with Hasbro, which owns the American and Canadian rights to the game (Mattel owns the remainder).

The first time Stefan Fatsis, a competitive Scrabble player, tried Words With Friends, he said, he ended up with a score of 626. His highest score after thousands of games of Scrabble has been 603.

Mr. Fatsis, author of Word Freak, about the culture of Scrabble, said the mobile Scrabble game via Facebook was clunkier and more commercial than Words With Friends. Although Hasbro s digital strategy is improving, it has largely been playing catch-up in the digital realm, he said, taking longer than it should have to introduce new technology and iron out bugs in its games.

As a result, smaller and more nimble entrepreneurs have been able to come up with popular alternatives, he said.

Mark Blecher, senior vice president for digital media and gaming for Hasbro, denied that the company had been slow to embrace digital technology. Hasbro innovates, but we innovate when we know there s a real market, he said. Words With Friends, he added, is not a substitute for Scrabble; it lacks the true rules and the true pattern of the game.

Hasbro does not disclose data on mobile Scrabble users, who can access the game in several ways on their cellphones: through Facebook, through an iPhone app (Android coming soon) and through the site Pogo.com. Its digital games are developed by Electronic Arts.

Megan Lawless, 31, of Chicago, plays Scrabble and Words With Friends on her cellphone and said she liked them both as a way to connect with people close to her. She learned to play Scrabble from her great-grandmother, who belonged to a Scrabble league.

One day in 2009, no one she knew was available to play with her, so she hit the option on Words With Friends that allows play with a random opponent.

It was a very out-of-character thing for me to do, she said. But the game went well: she could tell that she and her opponent were evenly matched in terms of skill. Her opponent proposed a rematch, and repeated games led to chatting about their personal lives. Eventually, she found out that her opponent was a man, Jasper Jasperse, and that he was a firefighter who lived in Holland.

After they began e-mailing each other and talking on Skype, Mr. Jasperse asked if he could visit her in Chicago, and we clicked right away, Ms. Lawless said. Now, they plan to marry in July, and he will move to Chicago.

The random function did not work out as well for Alex Alan, 31, of Brooklyn. For a while, I was playing these anonymous people, seven or eight going on at once, and it was getting out of hand, he said. He was playing Words With Friends, he said, when he could have been talking to his girlfriend. So now he restricts his games to a small cadre of people he knows in real life.

In an effort to unplug, Mr. Alan also tries to play Scrabble with his friends on a real board, the kind that would be instantly recognized by Alfred Mosher Butts of New York, who invented Scrabble in the 1930s.

Indeed, the popularity of digital Scrabble has increased sales of the board game, Mr. Blecher of Hasbro said. The company sold four million Scrabble-branded games of the physical variety in 2010, an increase of more than 100 percent in a five-year period.

As Mr. Fatsis put it: The truth is, there is something really exciting about handling the tiles and putting them down on a board and having your opponent sit right across the table from you.

Intel's new solar powered chipset has 24 hour battery backup



Intel unveiled its next generation Haswell chip architecture at its developer forum which will debut in 2013. It's biggest USP - 24 hour battery backup on a single charge.

This is possible because of a 20 fold reduction in power consumption as compared to the previous Ivy Bridge platform. The reason Intel managed such advanced power saving is the 22nm 3D transistor architecture which uses so little power that the chip can be powered via a solar cell.

Intel showed a demo of the Haswell platform on a Windows prototype, powered through a tiny solar cell which utilized light offered by two light bulbs.

The Haswell platform will succeed the Ivy Bridge platform which will ship in 2012.

Besides this, Intel and Google announced that all future versions of Android would support Intel's chipset architectures.

Intel seems to set to break new ground in terms of power efficiency, which is critical to being successful in the mobile space.

Follow? No, Facebook to let users 'subscribe'



In a nod to rival social networks, Facebook is letting its users "subscribe" to news from other members - even those they are not friends with.

Facebook said in a blog post Wednesday that it is rolling out the "subscribe" button to users in the next few days. This will let people hear from Facebook users they don't know personally - such as celebrities or political figures.

Public figures have already been using Facebook to send news to their fans by creating public pages. By clicking the "like" button on these pages, users can see the updates in their own news feed.

The new button will let people bypass creating public pages and send updates directly to their subscribers. Only updates that users publicly share will be seen by subscribers, and Facebook says the feature is entirely optional. Twitter and Google Plus already have similar "follow" features.

Facebook's button is a bit more customizable, as Facebook features tend to be. Once you subscribe to someone's posts, you can decide whether to see all updates, most updates (which is what you normally see now), or only important updates, such as a marriage or a new job. You can even decide what form of updates you want to see - photos only, games only or some combination.

Nine killed in Bharatpur violence, curfew imposed




Bharatpur:  At least nine persons were killed on Wednesday in a clash here between two communities over a land dispute, forcing the district authorities to impose curfew in a few areas.

The clash erupted Wednesday morning when some members of Gujjar and Muslim communities confronted each other over a land-related dispute. They pelted stones and exchanged fire.

"The situation further deteriorated and at least eight persons were killed in the violence till evening," District Collector Krishna Kunal said.

Additional forces have been called in from Jaipur and other neighbouring districts to bring the situation to normalcy, Divisional Commissioner Rajeshwar Singh said.

"As per primary information, they were killed in firing. Heavy deployment of force has already been done and additional forces have been called in from Jaipur and other nearby districts to control the situation," he said.

Curfew has been imposed in Pahadi, Jurera, Gopalgarh, Kaman, Sikri and Nagar areas of the district, the collector said.

According to police, alleged incorrect entry of land meant for digging a pond as a graveyard in government records by a local patwari was the cause of the clash.

"Gujjars were opposed to it and claimed that the land was never meant for graveyard. The matter is sub-judice but some men from both the sides entered into heated arguments and engaged in a scuffle yesterday in which two persons were injured.

"Today, they once again clashed and the situation worsened later", a police official said on Wednesday.

Additional DG (Law and Order) Navdeep Singh said in Jaipur that additional forces and senior officers have been rushed to Bharatpur.

Meanwhile, Chief Minister Ashok Gehlot has called a high-level meeting to review the situation.


Graft during YSR rule was above norm in India: WikiLeaks




Hyderabad:  A leaked diplomatic cable dispatched by the US Consul General in Chennai in 2007 had nailed the then Congress government headed by YS Rajasekhara Reddy in Andhra Pradesh for "widespread corruption that was beyond the pale" even for India.

In the name of social programmes targeted at the common man, the YSR government had engaged in corruption which was beyond the norm for India, whistleblower website WikiLeaks said, quoting the cable.

The YSR government's flagship programmes - construction of irrigation projects and houses for weaker sections - were beset with corruption even as Mr Reddy used the populist spending programmes to great political effect, the cable said.

There is consensus in Andhra Pradesh that irrigation and housing programmes are beset with corruption. On separate visits to Hyderabad, we heard allegations of widespread graft from several neutral observers. An economist who studies the effectiveness of government programmes in the state said with only four to five companies executing the projects, there are many opportunities for graft in the irrigation programme, the cable said.

"Typically, five to seven percent is lost to corruption but in Reddy's irrigation programme, that figure is more like fifteen to 20 per cent," the Consul General is quoted to have said in the cable.

While the housing programme will cost four to six billion dollars, the irrigation programme costs more than 11 billion dollars over five years on 26 major irrigation projects, the cable added.

"Widespread corruption in the Congress government seems to be an open secret in Andhra Pradesh but the political impact is unclear," the Consul General said in the cable.

The cable further added, "Many elites are disgusted by the level of corruption in the Congress government. The sheer size of Reddy's signature programmes, with literally billions of dollars at play every year, leaves much room for 'leakage' to Congress party officials and their allies.

"But the size of the programmes also means that even with a substantial percentage lost to corruption, a lot of money still must be making its way to the common man," it added.

kabul attacks:US blames ISI

Kabul:  The US has blamed a guerrilla faction with ties to Pakistan's military intelligence agency ISI for the attack on the US embassy in Kabul.

The US has blamed Pakistan-based Haqqani group for the recent attack on the American embassy in Kabul. Haqqani group is known to be backed by Pakistan's military intelligence agency ISI.

"The information available to us is that these attackers... are part of the Haqqani network, they enjoy safe haven in northern Waziristan (in Pakistan)," America's ambassador to Afghanistan, Ryan Crocker, has said.

Earlier in April, Admiral Mike Mullen, the chairman of the US Joint Chiefs of Staff, had said he was troubled by continued relations between the Haqqani group and Pakistan's ISI.

The attack launched on Tuesday lasted for 19 hours and left 14 people dead in a barrage of gunfire and suicide blasts targeting the US embassy and the neighbouring headquarters of NATO-led troops in Afghanistan.

Crocker said at least six rocket-propelled grenades (RPGs) landed in the embassy compound. Officials had earlier said that injuries there were limited to three Afghan visa applicants and one Afghan security guard.

"This really is not a very big deal, a hard day for the embassy and my staff who behaved with enormous courage and dedication," he said in a media interview.

"Half a dozen RPG rounds from 800 metres away - that isn't Tet (a key offensive in the Vietnam war), that's harassment."

Crocker also said he thought the nature of the attack showed a lack of strength among insurgents and paid tribute to the response of the Afghan security forces.

"If that's the best they can do, you know, I think it's actually a statement of their weakness and more importantly, since Kabul is in the hands of Afghan security, it's a real credit to the Afghan National Security Forces," he said.

On Tuesday, US Secretary of State Hillary Clinton insisted that the "brave" Americans working at the embassy in Afghanistan would not be deterred by the attack