Costco Wholesale Visa-Citi Deal Benefits Consumers

The new partnership of Costco with Visa and Citi will eventually benefit the customers shopping at the retail store.

Costco Wholesale Corporation is known as one of the most rewarding retail store in the world. Presently, Costco initiated the idea of loyalty programs on which companies like Amazon are succeeding for its loyal customers. Since then, it has paced up all over the retail market irrespective of what Costco could do with its loyalty program. Costco began its operations in 1983 and it is still one of the most preferred retailers in the United States.

The warehouses of the company are designed in a way that allows its customers to either shop in bulk or individual items. It created business opportunities for the smaller entities to purchase and resale its product in the market at their desired costs. Costco Wholesale tapped the market where it could benefit the most i.e. the high-income consumers. For the past 16 years, the retailer was in an exclusive partnership the US financial services giant American Express but recent conditions forced it to split away from its long partnership and sign a deal with Visa.

From June 20onwards, all Costco stores will accept newly branded Costco Citi Visa, Visa debit and credit cards, checks, or cash. However, it will no longer accept American Express or Discover cards.

American Express cards that were branded on Costco will soon become invalid. Costco recently inked a partnership with Citi and Visa to begin a new co-branded card to replace the American Express Costco cards. Sources suggest that the new partnership would positively impact the customers.

The new partnership is expected to provide an improved and seamless experience to customers. It is a common fact that whenever a main payment method or the process through which consumers spend or pay is changed, disruptment is risked regardless. In case of new cards, it is required by any company to fill more paperwork and apply for it.

Costco already thought of these factors and said that the consumers will not have to apply for a new Costco Visa or Costco Citi card as they will approve and receive them by post mail in the coming times. The new deal might have potential promotional perks. As the two financial companies will go head to head under one roof, each will try to have a profitable competition against each other. This will eventually benefit the consumers overall. 

Although companies will evolve, the ultimate beneficiaries will be the customers of these businesses.

Pfizer-Allergen Merger Now Investigated By US Anti-Trust Officials

Pfizer and Allergen might have not reached completion like hoped; this merger is now being investigated by the antitrust officials of the United States.

Pfizer is not getting the easy way out of US taxes, as Allergen Plc merger is now a matter of investigation by the antitrust officials. The drug maker company might have to provide the antitrust with more information regarding the merger that is worth $300 billion.

The pharmaceutical company and Allergen decided to tie the knot in past November making it one of the biggest deals ever. This deal was an inversion transaction transferring the company’s address into Ireland, since Allergen is situated there. This would lead it to avoid the huge US tax bills around 17% to 18% instead of the current 25%. This is not the only thing US is concerned about but even the fact that many jobs will be ripped away from the State if this happens.

The FTC (Federal Trade Commission) has issued another request to both the companies involved in the deal for further information to review, according to a statement on Wednesday. Both organizations will be working together and showing corporation to the FTC for the review to go on efficiently. The deal between the drug maker and the Botox maker reached an agreement a year ago worth $160 billion. The antitrust officials will also be reviewing for overlaps in the companies portfolios.

The review of portfolios might lead to problems for both companies, as it would even see for unfair advantages, if any, on the rivals. These companies might even have to divest products that are concluded to be a threat to the rivals by the officials. The FTC filed this deal on February 29 for a 30-day review, later it filed a second request. The second request stated that the FTC wants to conduct a detailed investigation regarding the merger.

Pfizer Inc. and Allergen Plc’s deal now lays at the mercy of the FTC. No predictions can be made as to what is really going to happen now. It is also waiting for the Botox maker to sell one of its generic drugs to Teva Pharmaceuticals. This is not the only hurdle faced by the merger now but it also awaits the approval of shareholders.

Pfizer stock was reported to decline by 6.6% right after the company announced the deal, which raised the concerns of investors. Even Allergen shares declined by 12% after the merger were made public.

Pfizer is not going to get its way out of the United States as easily as it had hoped. This merger has been a victim of criticism for a very long time. Now the matter belongs to the officials, with both companies keeping their fingers crossed.

Alibaba Sports Group Enters E-Sports With YuuZoo

The sports arm of Alibaba Group will launch multiple e-sports tournaments in collaboration with YuuZoo Corporation.

Alibaba Group Holding is expanded in several subsidiaries and its business is extensive. Almost everyone is familiar with the financial arm and the media arm of the company but Alibaba also has an infamous sports subsidiary known as Alibaba Sports Group (ASG).

Established in September 2015, it has been quiet and not making much news. It is never too late to get a big breakthrough. According to sources, the Singapore-based social networking firm, YuuZoo Corporation, has agreed a deal with Alibaba’s sports arm to the e-sports sector this year.

The deal suggests that Alibaba Sports Group collaborates with Yuuzoo Corporation that will launch multiple e-sports tournaments for various games and titles in the coming weeks. The tournament will be named AliSports World Electronic Sport Games (WESG), which will be the highest paying e-sports tournament in the world. The e-sports tournament will showcase Counter Strike: Global Offensive, Dota 2, Hearthstone, and Star Craft 2. It is expected to begin in April.

Being the world’s highest paying electronic sports tournament, the prize money for the winners is exceptional. Players who participate for the CS:GO and win will receive $1.5 million as winners and the same hefty cash prize will be awarded to the winners of Dota 2 as well. The winners of StarCraft 2 will get $400,000 for winning whereas $300,000 will be rewarded to the winners of Hearthstone.

YuuZoo Corporation said in a statement, “Through this deal, YuuZoo will gain a significant number of new users, who will be added to YuuZoo's fast-growing user base. Further, YuuZoo will generate additional revenue from promotional fees, advertising revenue, and e-commerce sales”. According to the agreement signed by both parties, the Chinese joint venture of YuuZoo, known as YuuGames, will receive millions of dollars in fees for this mega e-sports tournament.

Alibaba Group debut its sports division last year as it planned to improve its present in the markets other than e-commerce. The plan revolving around Alibaba Sports Group was ambitious. The company said in a statement that its sports division would be able to compete in different sports sectors such as copyrights, media, events and ticketing.

This move will help Alibaba in increasing its growth in the e-sports industry as well as the overall tech market. The famous games such as Counter Strike and Dota etc. have already led several event organizers to launch million dollar tournaments in the region.

Netflix Is the Conspirator Against AT&T And Verizon

Verizon and Sprint are victims of Netflix controversy.

As per an announcement made recently, Netflix Inc. accepted the fact that it was limiting the speeds for video streaming for certain wireless network carriers like Verizon Communications Inc. and AT&T Inc. this was being done so that the data plans could get accommodated. The announcement surfaced almost a week after both the network carriers were accused of manipulating the video streaming speeds.

Netflix came upfront to accept that they were decreasing the video quality for Verizon users and other popular telecom services like AT&T for a time span of five years. As per the streaming giant, the streaming bandwidth for these carriers is limited to 600KB per second, which is extremely slow in contrast to other modern wireless connections.

As per Netflix, if one spends almost two hours to stream High Definition (HD) content on VZ or AT&T then almost 6 gigabytes of data is consumed. This the maximum data allowances for a majority of the consumers. Other wireless network carriers such as Sprint, and T-Mobile have “friendlier customer policy” that slows on the network speed for all those who cross the data caps barrier. On the other hand, Verizon and AT&T consumers have to pay extra for exceeding the data limit, thus the consumer are not really discouraged to use the video service.

The issue got traction last week when the CEO of T-Mobile, Mr. John J. Legere stated that the consumers of Verizon and AT&T get low quality video streaming when using Netflix. However, both network carriers denied the allegations.

When they learnt that Netflix throttles the data, the senior executive vice president of legislative affairs and external at AT&T, Mr. Jim Cicconi stated, “We’re outraged to learn that Netflix is apparently throttling video for their AT&T customers without their knowledge or consent.” A spokesman from Verizon said: “Verizon delivers video content at the resolution provided by the host service, whether that’s Netflix or any other provider.”

The streaming giant also made an announcement that it will launch a data saver feature for smartphone users so that they can monitor the data usage when streaming. This will allow them to create barriers on their own while consuming data. The service will also allow users to alter the resolution in compliance to their data plans. The service is likely to debut in May, 2016.

The telecommunication fraternity is becoming highly competitive since all carriers are striving to increase market share. Verizon and AT&T consumers together are almost three quarter of the wireless subscriptions in the country. Both of the services encounter traffic congestion due to the high number of users.

The consumers on smartphones are used to of HD streaming on the go, thus AT&T and Verizon need to hunt down some alternative where the quality is not compromised and consumers also get what they expect in terms of quality.

Verizon itself is coming up with video streaming platform in recent times thus if the strain causes the masses to switch then it will affect its subscriptions in the long run.

Alibaba To Introduce Flea Markets In China

Alibaba is investing $15.4 million to introduce flea market in over 100 cities of China.

Alibaba Group Holding is the biggest and largest online retailer in the world. The company was already one of the largest but considering the performance it just put in the current fiscal year, it is set to surpass US Wal-Mart Stores as the biggest retailer in the world.

The Chinese tech giant, however, is now planning to enter a market where it has not already set its foot before. According to the company’s owned South China Morning Post, it will invest almost $15.4 million (100 million Yuan) in order to develop a digital flea market in China this year.

Alibaba Group previously expressed its wish to open a physical store soon that would further help the business. Now the idea of developing a flea market would not surprise many people but it is surely not its strength.

In June 2014, Alibaba came up with a mobile app, which offered used goods and items to the customers. The app was called Xianyu and within a short span of time, it became one of the most used mobile applications in the country. A news website yicai.com reported that Xianyu has almost 100 million registered users.

According to a report, nearly 170 million used-goods have been traded through the mobile app since then. The $15.4 million (100 million Yuan) investment will help Alibaba in introducing flea markets in 100 urban cities of China. This will allow the users of the smartphone app to trade purchase, sell, and trade second hand products physically in local areas.

CBNData – a reputable Shanghai-based data analysis firm – said that with this move, the flea market trading or used-good trade market could easily reach the 400 billion Yuan mark by the end of this year in China.

Alibaba suggests that it will provide convenience for the users. Users of Xianyu app can easily manage their stores in flea market through the mobile app. They can take and upload images of their products, put an impressive caption on the images, and can add promotional voice notes in order to increase the trades.

The company said, “Both buyers and sellers can get a sense of belonging, and recognize and assess each other, which makes the app more akin to a social network than a shopping website.”

The transactions of buyers and sellers will be supported by Alibaba’s online payment service Alipay, which also works like a money remittance service.

Amazon And Flipkart To Compete In The Indian Market

Amazon is expanding its reach in the Indian market to directly compete against the local players.

 Two of the biggest online retailers in the retail industry are planning to expand their global footprints in India. India is one of the rising nations which is adopting the notion of online shopping. Alibaba Group Holding and Amazon Inc. are currently exploring options to expand their reach in the Indian e-commerce market and both online retailers have different approaches to do it. Amazon launched its online marketplace platform for the Indian online shoppers in 2013 and since then it has had a positive impact in the market.

Alibaba is making deals and acquisitions to improve its market position in the region. It already holds stake in Snapdeal and PayTM. On the other hand, Amazon is improving the presence of its e-commerce platform in the industry. The company directly competes with the local established businesses such as Flipkart and Snapdeal and internet rival Alibaba. India has a fairly nascent e-commerce market the online retailers will go head to head for the big market share. After United States and China, there is no doubt in the fact that the Indians are looking to make the nation the next big e-commerce field for all local and international companies.

Sources suggest that the valuations of the Indian e-commerce industry might have been ahead of its present reality. Analysts at Morgan Stanley wrote down on a fund regarding its stake in Flipkart which is of more than a quarter. it is believed that it is a massive $25 billion market which is growing at a fast pace and grows at an impressive rate of 40 percent annually irrespective of the fact that it is still considered ‘virgin’ territory.

According to the owner of an Indian start up Quickr, which is backed by EBay, said “We are trying to make it as easy as buying something new. Instead of the Western ‘we’ll connect you and you go figure the rest’ approach to classifieds, we Indian-ized it.”

The e-commerce market is a mutual attraction for the local players as well as the likes of Amazon. This is because that the China and United States are currently staked out by numerous operators. The online retailer is determined to expand its business and services in the region. It realizes the significance of a market which is also the highest population of the world. And the progress at which the company is developing, it is a matter of time that it offers shopping services to most countries in the world.

McDonald And Other International Brands Struggle In India

The fast food chain should come up with reinventions to have firm hold of the region.

Growth requires innovative steps and this is what McDonald Corp. had to do this year in India. The Golden Arches had to change its decades old recipe of the signature two-patty chicken burger. The change was inevitable in light of the company’s battle against the slumping sales.

Back in January, the Oakbrook, Illinois based fast food titan revamped the Indian Big Mac which is now dubbed as MaharajaMac, the burger had been the best sellers for as long as 20 years. The recipe change resulted in thicker chicken patties along with the addition of jalapenos and a habanero sauce. Moreover, the first ever meatless Big Mac also made a debut for the vegetarian consumers of India whose patties are made using cheese and corns.

The Vice Chairman of Westlife Development Ltd. which has the charge to run the Golden Arches outlets in southern and western India, Amit Jatia expressed, “Everyone needs to reinvent to stay relevant.” He also added that even though to perform outclass in the market is tough however initiatives can still be taken to go ahead.

What once was the hot spot for the fast food chains has now hit a wall at a lot of international established brands including KFC, McDonald’s, and Pizza Hut. This has brought down the hopes the brands have that the region will offset the declining growth in China and the West.

Although, generally, the market for eating out is expected to spread out however the rate of growth is at a snail’s pace. Moreover, once the pioneer in India, the international chains are not hoping for significance expansion. The London based market research firm, Euromonitor International had projected the India’s food-service industry sales to be around $116 billion –US equivalent of Indian 8 trillion rupees. In comparison to last year, this estimate has gone up by 11%. It is noteworthy, that in 2008, the industry grew by 16%.

The fast food giant moved in India around 15 years ago and now they are struggling to bring appropriate changes which can avert the possibility of the demand implosion due to which companies like Yum Brands Inc. which controls the popular brands like KFC, Taco Bell, and Pizza Hut to reconsider the China’s investment.

Major initiative has to be taken by the market leaders to bring the companies on the expansion trail. Mr. Jatia, therefore, has decided to double the store count of the McDonald’s in the upcoming three to five years reaching at the figure of around 400. Similarly, Domino’s looks forward to make around 150 new stores every year. Whereas Pizza Hut parent Yum envisions taking the store count to two thousand by the year 2020.

The major obstacles on the way of the companies’ growth are the poverty level of India as hundreds of millions of Indians are compelled to live below the international poverty line of $1.90 per day due to which the consumption of fast food is luxurious for an ample amount of majority.

One of the representatives of Pizza Hut said: “These are difficult times. People with staying power will withstand the short-term pressures. The ones who don’t will have to shut shop.”