We bring to you the latest edition of News Roundup: Indian Startup Stories Of The Week!
In one of the most important developments this week, India threw a big fat party for the US President Donald Trump, who was accompanied by the US first lady Melania Trump, daughter Ivanka Trump and her husband Jared Kushner, along with US delegation which included Secretary of Commerce Wilbur Ross, Ambassador of India Ken Juster, advisor for policy Stephen Miller among others.
During his stay in India, Trump met India Inc including Indian business leaders such as Reliance Industries Chairman Mukesh Ambani, Tata Sons Chairman N Chandrasekaran, Aditya Birla Group Chairman Kumar Mangalam Birla, Mahindra Group Chairman Anand Mahindra among others. Trump lauded their work and urged them to invest in the US and said that he would ease the norms and create more jobs for American citizens.
In one of the interesting events, the founder and CEO of OYO Ritesh Agarwal introduced his company as the young startup which has around 313 hotels in the US, Trump replied saying that he already knew about OYO and praised Agarwal’s work. “Not such a small company, by the way, good job!” Trump said.
Trump concluded his visit to India by speaking about 5G technology with PM Narendra Modi, where he highlighted the importance of secure 5G wireless network and emphasised upon using 5G as a tool for freedom, progress and prosperity.
Microsoft CEO Satya Nadella also visited India this week and urged Indian developers to build more inclusive solutions. Mukesh Ambani said that Microsoft and Jio will be facilitating tech-enabled, cloud computing solutions to startups, micro-enterprises, merchants, shopkeepers and large enterprises, thereby helping them transform their businesses to the next level.
Nadella also said that hopefully, India will continue to be a progressive democracy as it helps more people to find this as a land of dreams.
In an attempt to push India’s ranking in the World Bank’s Ease of Doing Business (EoDB) Index to the top 50 by 2021, the government is aggressively focusing on Kolkata and Bengaluru as key growth hubs, along with Delhi and Mumbai. Also, the ministry of corporate affairs has decided to simplify the registration process of startups, where it has deployed a new web form SPICe+, which will replace the existing SPICe registration form, effective from February 23, 2020.
The government has announced 100% foreign direct investment (FDI) in insurance intermediaries. In other words, among the board of directors of a company, at least one of the senior leadership members, be it CEO, MD or principal officer, should be an Indian resident. Those failing to comply, will not be able to make payments to the foreign group or promoter or associate entities beyond the permissible limit. At the same time, it has also permitted foreign players in single-brand retail trade to set up shop in India without government approval.
OYO Founder Agarwal Joins The Billionaire Club And More
The founder and CEO of hospitality startup OYO, Ritesh Agarwal has joined the billionaire club. Agarwal is now the world’s second-youngest self-made billionaire. As per Hurun Global Rich List 2020, his wealth was estimated at $1.1 Bn (INR 7,800 Cr). The list also included Zerodha founders Nithin Kamath and Nikhil Kamath, Flipkart cofounders Sachin Bansal and Binny Bansal and BYJU’s Byju Raveendran.
The competition commission of India (CCI) has now ordered a probe against OYO and MakeMyTrip for their partnership which is harming the businesses of other companies in the ecosystem. Treebo, which is also a hospital player in the Indian hospitality space, alleged this partnership as it is not listing Treebo and its partner hotels on the platform. It also accused OYO of abusing its dominant position by entering into an anti-competitive vertical.
Paytm Tackles Fraudsters In India
The fintech unicorn Paytm recently filed an FIR against 3500 fraudulent numbers. The MD and CEO of Paytm Payments Bank blamed the telecom players for ‘not doing enough’ to tackle the menace of online fraud, where these fraudsters dupe people via calls and SMS. To put an end to this, the company has collaborated with the Reserve Bank of India (RBI), TRAI, Ministry of Electronics and Information Technology (MeiY), private banks and others.
Freshworks Takes First Step Towards US Listing
Based in Chennai, SaaS unicorn Freshworks recently acquired Seattle-based deeptech startup called AnsweriQ. The company believes that AnsweriQ’s product line will complement its own AI/ML capability, particularly in the customer engagement space and offers significant value to its customers. This also comes at a time when the company is looking to list itself in the New York-headquartered stock exchange, NASDAQ.
UPI Is The Most Preferred Mode Of Payments
The RBI, in its latest report, showed that the value of digital payments by Unified Payments Interface (UPI) to GDP touched 862% in FY19 compared to FY15, where it was 660%, a 202% increase in transactions. Further, the report showed that India was among the few countries, where the value of digital payments as a percentage of GDP had increased.
India Digital Payments Report 2019 by Wordline also revealed that UPI was the most preferred mode of payment in terms of volume, followed by debit cards, credit card and immediate payment services (IMPS). The report said that UPI recorded a transaction volume of 10.8 Bn in 2019, a 188% increase year-on-year (YoY). It also said that the UPI perhaps the fastest product to hit 1 Bn transactions a month in 2019, since its inception in August 2016.
PayPal Likely To Launch UPI Payments In India
Online money transfer service provider, which is currently operating peer-to-merchant (P2M) transactions, is now looking to launch UPI-based peer-to-peer (P2P) payments features for the Indian market. With over 300 Mn users, globally, Paypal is planning to launch this service in the near future. Currently, companies like Paytm, Google Pay, PhonePe, Amazon Pay among others are providing P2P UPI transactions in India.
Digital Payments At Its Peak In India
RBI reportedly said that the introduction of digital payments instruments like debit cards, credit cards, IMPS among others, has reached its peak in the last three years since the demonetisation event in November 2016. The regulatory body said that on an average, the payments system in India processes more than 10 Cr transactions of nearly INR 6 Lakh Cr.
Shaktikanta Das, the governor of RBI claimed that digital payments account for around 97% of daily payment system transactions in terms of volume. He further said that this has been made possible with the accelerated growth of over 50% in the volume of digital payment transactions in the last five years.
Flipkart Gets Relief In Court Cases
The US-based retail giant Walmart is looking to set up a B2B wholesale store, which is crucial for its cash-and-carry business in India. Simultaneously, it is also planning to convert some of its B2B wholesale stores and best price modern wholesale into a fulfilment centre or warehouses for ecommerce platform Flipkart.
In an ongoing case between CCI and ecommerce players, Flipkart had filed a court petition on February 18, saying that CCI ordered its probe without initial evidence that the company’s practices were harming competition. The Karnataka High Court has given a stay order to Flipkart, where CCI is investigating the charges of alleged malpractices, predatory pricing and preferred treatment to select sellers.
In another court case related to insolvency proceeding against Flipkart, which was filed by an operational creditor Cloudwalker Streaming Technologies, NCLAT has now dismissed the case of the dedicated bankruptcy court, which initiated insolvency proceedings against Flipkart.
Club Factory Troubles
Gurugram court’s Civil Judge Suyasha Jawa has directed Club Factory and its new employee, a former Snapdeal employee — from sharing, divulging, using or utilising previous ecommerce marketplace trade secrets, financial data and confidential information. This comes to light after a plea was sought at the court to restrain Club Factory, claiming that it was being done to cause financial loss as well as a loss of Snapdeal’s goodwill.
Separately, a Bengaluru-based customer filed a police complaint against the company for selling fake products on the platform. The police have registered a case of cheating and criminal trust breach against a few of the sellers of Club Factory, including Future India, Jialun Li and Garvit Aggarwal. It has started investigating the case at the moment.
Amazon On TDS, One-Day Delivery and More
The ecommerce giant, Amazon, as well as Flipkart, have sought more time to implement the levy of 1% tax deduction at source (TDS) as proposed by the government on ecommerce transactions in the Union Budget 2020.
Morgan Stanley, an analyst Brian Nowak commenting on Amazon’s one-day delivery said that it has already made an impact on consumer attitudes and its competitors. Further, he said that their delivery service has increased expectations for ecommerce shipping times, as two-day shipping may seem too slow for customers.
The ecommerce giant Amazon is now planning to launch its much-anticipated food delivery platform, which is expected to be launched next month. It is currently running a pilot test in Bengaluru, and the platform is apparently open for Amazon employees only.
Consider Food Aggregators As Ecommerce: NRAI
The National Restaurants Association of India (NRAI) has not given up on taking food aggregators to task over discounts. The restaurants authority has now reached out to the department for the promotion of industry and internal trade (DPIIT) to classify the online food delivery platforms as ecommerce marketplaces.
NRAI believes that bringing Zomato and Swiggy under the existing ecommerce guidelines will bring in some relief to the restaurant owners. The association claims that these food delivery apps are involved in deep discounting, high and uneven commission charges, data masking and mandatory bundling of services have been impacting the small businesses and restaurant owners.
Social Media Banter From Reddit CEO
Reddit CEO Steve Huffman said that TikTok is ‘fundamentally parasitic’ over its data policies and privacy issues. He said that it is always listening, the fingerprinting technology they use is truly terrifying, and he would never install such an app on his phone. Responding to this, TikTok said, “these are baseless accusations made without a shred of evidence.”
S Srishailam, a Hyderabad-based resident has accused social media giants such as WhatsApp, Twitter and TikTok for allowing people to spread anti-national activities. Srishailam has filed an FIR with the Hyderabad Cyber Crime Police and claimed that few people have been running a campaign against the CAA on social media platforms to spread hatred.
Coronavirus Vs Tech Giants
In a bid to stop the spreading of false information about coronavirus, Amazon has warned third-party sellers and merchants that it will boycott products that claim to cure the deadly coronavirus pandemic (Covid-19) and delist them or sellers from the platform.
Facebook has also joined the cause and has decided to ban all ads that claim to cure, prevent or create a ‘sense of urgency’ around coronavirus. Facebook said that it has implemented a policy that prohibits similar behaviour in the Marketplace as well.
Apple To Launch India’s First Apple Store By 2021
At the annual shareholder meeting in Cupertino, Apple’s CEO Tim Cook confirmed that the company would be launching India’s first physical retail store in India by 2021. The smartphone maker said that it would start selling its products online in India this year and will open its first Apple Store next year. It also said that Apple needed to get approval from the government to go into India on its own rather than with a domestic partner. “I don’t want somebody else running the brand for us,” said Cook.
Stay tuned for the next edition of News Roundup!