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First Move with Julia Chatterley
Violence Escalates as the Migrant Standoff Continues on the Belarus Border; Germany Delays Approval of Russia's Nord Stream 2 Gas Link; President Xi Warns Biden Over Taiwan During their Three Hour Healthy Debate. Aired 9-10a ET
Aired November 16, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:25]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Belarus border battle. Violence escalates as the migrant standoff continues.
Pipeline pressure. Germany delays approval of Russia's Nord Stream 2 gas link.
And playing with fire. President Xi warns Biden over Taiwan during the three hour quote, "healthy debate."
It's Tuesday. Let's make a move.
A warm welcome to FIRST MOVE once again, and plenty in store for you today. We're taking stock of the ongoing global sales and spending splurge. U.S.
retail sales data rising by a stronger than expected 1.7 percent in October driven by car sales, furniture, electronics and building materials, among
others. Consumers seemingly not put off yet by higher prices.
Retail giants like Walmart and Home Depot certainly benefiting with Walmart raising their forecast for the Holiday Season, we will discuss later on in
the show.
And coming up, we'll hear from the CEO of Restaurant Brands International, that's the parent company of global franchises like Burger King. We'll find
out how they're dealing with the Whopper size challenges in labor and food prices -- yum.
From enthusiastic eating to food delivery and e-commerce in Africa, the CEO of retail marketplace and payments at Jumia will join us with all the
latest news from the continent.
And in the meantime, buyers are still trying to get in gear on Wall Street with the majors just one percent away from record highs. In stock this
Tuesday, "healthy debate" quote between Presidents Biden and Xi, no breakthroughs though from the three-hour Summit between the Chinese and
U.S. President, but no stumbles either as Asian markets, I think reflect.
Out of stock, Bitcoin and other cryptocurrencies falling sharply on fresh fears of China's crackdown. Tesla shares also sinking towards bear market
territory as Elon Musk continues to sell. And on order, or still at sea, the fate of Fed Chair Jay Powell, Bloomberg saying the news, a decision on
whether he stays or goes is imminent.
So lots coming up. Let's get to the drivers.
To chaotic scenes at the Belarus-Polish border. Polish Guards have fired tear gas and water cannons at migrants who in turn have thrown stones as
they attempt to cross into Poland, and of course, the E.U. Poland accuses Belarus of equipping migrants with stun grenades.
Matthew Chance is at the border in Belarus and has been now for some days. Matthew, great to have you with us. Chaotic scenes, as I mentioned there,
perhaps no surprise in light of what you've been telling us over the last few days, but things turned to conflict.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: It has. I mean, it's a desperate situation here amongst the migrants that have gathered
here on the Belarusian-Polish border. They are living in very kind of exposed conditions. As you can see, there is a guy here I've just met from
Iraq-Kurdistan -- right, everybody is from Iraq-Kurdistan -- is cooking chicken, which is the first food he's had for some days on this campfire.
But that frustration that has been expressed in terms of desperation bubbled out into anger earlier today. And there were dramatic scenes right
here on the fence, which divides Belarus from Poland, where you can see, there is a gap in the fence there where the children are now playing just a
few meters away from where the Polish border guards are standing to protect the coalition the European Union borders, they are determined not let
anybody in.
But there were migrants throwing stones at those guards, throwing kind of logs as well, trying to push their way, force their way into the European
Union.
The Pols responded in kind if you like, they basically didn't move. They brought in teargas, rather water cannons, sorry -- water cannons, which
they brought in, which they sprayed the migrants with. Some of the water had a kind of pepper component in it and so it was quite acrid and it stung
everybody's eyes, and I got covered in it myself, and so I can talk from firsthand experience.
The worst of the violence happened right over here, which is the sort of main entry points, the official crossing from Belarus into Poland. It's all
being cleared now and the refugees have been moved back to this location.
[09:05:10]
CHANCE: But earlier, there were scenes really, really violent scenes, Julia, taking place there. We've just been told by the Belarusian Border
Agency, that the process is underway now of splitting up these refugees a bit. Some of them are going back to the camp near the border in the middle
of the woods where we've been reporting from over the past week or so.
But others, including women and children, people who have a medical condition, apparently are now tonight, going to be taken to what is being
called the logistical center a short distance from here, away from the border. It is inside, and so that's a huge improvement given the freezing
conditions here and they will be given food and medical attention by the Belarusian Red Cross.
And so that's a positive development for them individually, and of course, it gives us this idea that the Belarusians are trying to pull back from the
brink when it comes to this crisis.
CHATTERLEY: Matthew, I know I have to let you go, but very quickly does that mean families are going to be separated, men from women and children.
CHANCE: That's not my understanding, some families I was told will be just going back to the camp. But you know, it is people who have particular
medical conditions who want to go inside that are being taken there.
CHATTERLEY: Thank you, Matthew, and great to have you with us. Stay safe, please. Matthew Chance there on the Belarus border.
Okay, let's move on. Germany, suspending a decision to certify the controversial Nord Stream 2 gas pipeline. The move putting further upward
pressure on natural gas prices. The pipeline was built to bring gas from Russia to Germany, bypassing the existing route through Ukraine, whose
state energy provider welcomed the suspension.
Anna Stewart has been following the story for us. Let's just take a step back, Anna, from the decision that Germany made here. They are staring down
the barrel, Germany, of an impending migrant crisis, as we were just discussing there with those migrants looking to get into the E.U. They are
at loggerheads with Russia over the situation in Ukraine, too, as our other E.U. nations, and then this decision today. A coincidence or otherwise?
ANNA STEWART, CNN REPORTER: Yes, this decision on the face of it, a technical legal issue to do with the operation of the pipeline in Germany
needing to be a German subsidiary separate from the supplier. But listen, you cannot separate this pipeline in particular from politics at any stage,
let alone given the timing and the tension between Russia, Ukraine, and the E.U.
This pipeline, Nord Stream 2, is a twin to Nord Stream 1. What it seeks to do is to pipe gas directly from Russia under the Baltic Sea to Germany,
bypassing Ukraine critically and very controversially, and I'll tell you why. One reason is, it would severely reduce the transit fees, the transit
revenue that Ukraine gets. That's around a billion dollars a year I've seen overall for transit revenue.
Secondly, it could reduce Ukraine's influence in Western Europe, given Western Europe won't be as reliant on Ukraine being stable to receive its
gas. And thirdly, to take the more extreme view, it actually would remove a real deterrent from Russian interference in Ukraine given currently Ukraine
is still quite important for Russian revenue in terms of gas exports.
And I think this is exactly what we've been seeing now for many, many months, years, frankly, given all the opposition around Eastern Europe from
the U.S. and particularly Ukraine to the pipeline.
And just last night, Julia, U.K. Prime Minister Boris Johnson, speaking at Guildhall made the point that European countries he says are now facing a
choice between these giant new pipelines from Russia, he says and sticking up for Ukraine and championing the case of peace and stability.
CHATTERLEY: Yes, and this is a critical point, isn't it? And we can throw in the Americans here, very concerned that actually this increases the
E.U.'s reliance on energy from Russia, rather than trying to reduce some of that reliance.
What we've seen is a short-term spike in gas prices that have already been incredibly hot, Anna, but this is not, let's be clear about -- and able to
have any impact on short-term gas supplies. This is to your point about the future.
STEWART: Yes, because no matter what we've heard from Russian politicians that if this pipeline were to be approved today, there'd be more gas
supplying through Europe. Analysts we've spoken to have said that this wouldn't actually increase gas supplies to Europe for many months, probably
into the second or third quarter of next year because it is a lengthy process.
What this is really risking his current supply of gas into Europe, given the political situation seems to be souring, and the fact that as you say,
Europe relies on Russia for gas. Over 40 percent of the E.U.'s gas currently comes from Russia that is likely to increase giving Europe's
needs for more gas is likely to increase as they transition from dirtier energies.
This pipeline would increase the capacity that Russia could pipe gas to Europe, but I will say there is some skepticism from analysts I've spoken
to you that this would overall increase how much gas Russia actually pipes to Europe in the future, it might just mean that less is transiting through
Ukraine of course, and more is going under the sea, but there's a lot at play here and clearly investors very, very worried about what this means
for now and for the future.
[09:10:13]
CHATTERLEY: Yes, but for now, at least Germany holds the cards, or at least Switzerland, where the certification needs to take place. Anna
Stewart, thank you so much for that.
Okay, let's move on. President Xi of China warning the U.S. on Taiwan as the two held their most substantial talk since Joe Biden took office.
President Xi telling the U.S. President, quote, "Whoever plays with fire will get burned."
The virtual Summit lasted longer than expected three and a half hours. U.S. officials describing it as a, quote, "healthy debate."
David Culver joins me now, and plenty to debate, be it climate issues, be it technology transfers, be it of course, Taiwan, and that is actually
where I want to hone in, David, because obviously, we had that, quote, "Don't play with fire." We also had Taiwan saying that Chinese state media
misrepresents them.
And in China, I just wonder whether they understand the strategic importance, the economic importance of Taiwan, and their production of
semiconductors and why perhaps the United States is so nervous every time China makes a comment as far as Taiwan is concerned, do they understand?
DAVID CULVER, CNN CORRESPONDENT: I think Julia, it is deeply understood here. I mean, you talk about trying to secure any sort of energy line here,
as well as the production of semiconductors. I mean, that's something that China has been adamant about moving forward with. They are trying to make
sure that they can maintain those supply lines and even try to keep them within mainland. And in their opinion, Taiwan is part of China. It is part
of their sovereign territory.
Of course, the self-governing island has a different take on all of that. But this was a meeting that really, I think, surprised a lot of folks in
the sense of they say, it went longer than expected. But as you pointed out, there are multiple topics they had to get through. They had about
three and a half hours all together as they were talking. I broke it down. I mean, that's roughly 25 to 30 minutes per seven or eight topics that they
were going through. So you know, it's not equally split, but there is a lot to get through.
It is a heavy amount of material to comb through and trying an agreement in all of this, well, that's just incredibly challenging.
So the overall focus was, let's look at competition over conflict.
(BEGIN VIDEOTAPE)
CULVER (voice over): A pandemic style face-to-face meeting.
XI JINPING, CHINESE PRESIDENT (through translator): I'm very happy to see an old friend.
CULVER (voice over): The first time President Joe Biden speaking virtually with Chinese President Xi Jinping. The conversation lasted more
than three hours, covering a range of issues that have brought relations between these two countries to an all-time low.
A senior U.S. administration official calling the talks respectful, straightforward, and open, a healthy debate in which Biden was clear and
candid on a range of human rights concerns. In response, Xi telling Biden that China is ready to have dialogues on human rights on the basis of
mutual respect. But we oppose using human rights to meddle in other countries internal affairs.
On trade, Biden also pressing Xi to uphold China's commitments to the Phase One Trade Deal negotiated under former President Trump. They also talked
Taiwan, China's so-called red line. China has been putting military pressure on the self-ruling democracy, firm in believing it should be
reunified under Beijing control. Xi stressing that on Taiwan, the U.S. is playing with fire.
Following the meeting, Chinese state media immediately reporting their version tweeting, "Biden reiterates that the U.S. government does not
support Taiwan independence." But the White House had a different take. In a statement stressing, "The United States strongly opposes unilateral
efforts to change the status quo or undermine peace and stability across the Taiwan Strait."
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: To ensure that the competition between our countries does not bear into conflict --
XI (through translator): China and the United States need to increase communication and cooperation.
CULVER (voice over): The meeting as expected, there will be no major outcomes.
PAUL HAENLE, FORMER WHITE HOUSE N.S.C. CHINA DIRECTOR: The sort of the long-term structural challenges between the U.S. and China have really yet
to be addressed. This could be the start of a process for that to happen.
CULVER (voice over): Perhaps the warm gestures, a sign of progress, encountering the frigid relations.
(END VIDEOTAPE)
CULVER (on camera): And Julia, when you look at those images of the back and forth, it's not just a one-on-one. You had both of those leaders
flanked by their top officials. The U.S., the Secretaries of State, Treasury, as well as the National Security Adviser; China had its
counterparts to those positions represented as well.
Why does that matter? Because you asked the question, where does this go next? Well, it is according to one senior administration official with the
U.S. going to be up to those empowered officials to then take some of the talking points and eventually turn them into action, and that's huge, as
you know, because if it is something that's just amongst the top, oftentimes, it doesn't trickle down.
But for those individuals to be in that meeting, to be part of this discussion, well that says something about perhaps substance that we might
see coming out of this going forward.
[09:15:11]
CHATTERLEY: Absolutely. I mean, I loved your point about competition over conflict, and I think the other point we should make here as well about the
timing is it is done through translators. And you have to be incredibly careful that there aren't misunderstandings with the English and the
Chinese and the translation that takes place as well, which is critical here as well.
CULVER: It's a great point. Because it is also not scripted. That's true. It usually is.
CHATTERLEY: Right. Absolutely. So when you're having freewheeling conversations with two of the most powerful men in the country, making sure
that the translation is absolutely as precise as it can be is critical. And on that point, actually, towards that point, at least, President Biden made
a comment that I thought was very important.
He said, "The importance here is that neither man walks away, wondering what the other man is thinking," whether they've spoken about something or
not.
CULVER: The intentions.
CHATTERLEY: Yes. Do you think we're at that stage?
CULVER: I think we're at a stage where, you know, perhaps we're at the boiling point, because it's been equated to temperature, perhaps we're just
simmering right now. And as far as what the next steps are, you know, both sides seem to want some sort of stability. I think that seems to be
understood.
One thing I have seen in state media here that I haven't seen in more than two years, it is a positive headline. Multiple ones at that when it comes
to the U.S. and China in the same sentence, and things that are uplifting, suggesting that perhaps this is the right track.
There is a lot more to go on this. There is still a lot more to be accomplished, but at least to have that type of rhetoric versus the wolf
warrior rhetoric that we have experienced for more than two years now. Yes, I mean, it's something positive, right?
CHATTERLEY: Yes. There's a path whereas before, I'm not sure we could see one at all. David Culver, great, as always to have your context. Thank you.
CULVER: Thanks, Julia.
CHATTERLEY: Okay, let me bring you up to speed now with some of the other stories making headlines around the world.
Jurors in the Kyle Rittenhouse homicide trial are set to begin deliberations today. The prosecution and defense rested their cases on
Monday. Rittenhouse shot and killed two men and wounded a third during racial equality protests in Wisconsin last year. He says he acted in self-
defense.
New COVID-19 rules take effect today in the German state of Bavaria as officials try to curb a new spike in cases. Unvaccinated citizens over 12
years old are currently banned from restaurants, hotels, and other public places. Berlin implemented similar restrictions on Monday.
In Uganda's capital, at least three people have been killed and 33 have been wounded in a pair of suicide explosions. One blast went off near a
police station and the other was detonated close to Parliament. Authorities have linked the explosions to an Islamic rebel group, ADF, which claimed
responsibility for another attack last month.
Still to come here on FIRST MOVE. Snapping up sandwiches. Burger King's parent Restaurant Brands buys Firehouse Subs, the CEO on expanding the
empire next.
And DIY drive shopping sprees at Walmart and Home Depot, earnings soar as homeowners get busy. That's all coming up, stay with us.
(COMMERCIAL BREAK)
[09:20:55]
CHATTERLEY: Welcome back to FIRST MOVE. A lot of window shopping premarket on Wall Street, not so much intention to buy as yet. Europe, in
the meantime, gaining with the DAX on track for its fifth straight record close. All this, as the U.S. reports its biggest retail sales jump in seven
months. An encouraging sign for the upcoming Holiday shopping season. Consumers still spending even as they worry about rising prices.
Home Depot share is set to rally after its Q3 earnings beat. Walmart currently lower though, despite raising its sales and profit guidance. The
massive size of these retailers allows them to better withstand supply chain worries and adjust for it as well as inflationary pressures.
Restaurant Brands International is taking more than a bite out of Firehouse Subs buying the sandwiches chain for $1 billion. You've likely eaten at one
of RBI's restaurants. It owns Burger King, Tim Hortons, and Popeye's, which are run as franchises. Firehouse Subs itself is based in most U.S. states,
Puerto Rico, and Canada with further international growth now potentially on the menu.
Joining us is the Chief Executive of RBI, Jose Cil.
Sir, fantastic to have you on the show. Let's talk about that recent acquisition. What does that and what potential do you see in that
acquisition? Talk to us about potential international expansion, too, if that is on the menu indeed?
JOSE CIL, CHIEF EXECUTIVE, RESTAURANT BRANDS INTERNATIONAL: Absolutely. Good morning, Julia. Great to see you again.
We're really excited about this acquisition and Firehouse Subs joining the RBI family. We've got great brands with Burger King, Tim Hortons, and
Popeye's, and now the addition of Firehouse Subs really gets us excited about the opportunity for growth.
Firehouse is a great brand. It started in 1994 here in Florida, in Jacksonville, and they have grown tremendously to 1,200 locations. And in
fact, they've grown their footprint by three-fold since 2010 and they have grown their system-wide sales by like four-fold since the same period of
time.
It is a differentiated, purpose-driven brand, really great subs, hot subs that are best in class in the sub sandwich space. And we think they have
tremendous room for growth here in the U.S., and Canada as well, where they recently started, and now have nearly 50 restaurants. And then
internationally, we think there's a tremendous opportunity for growth as well.
We, as RBI and with our brands have tremendous strength from a development standpoint, internationally. We think the combination of that great brand
and the potential and the unit economics that exists plus our incredible network of master franchisees is a really powerful combination.
CHATTERLEY: Yes. You know what you're doing and we were just showing some of the stats here, 27,000 restaurants plus around the world operating in
different hundred-plus countries. You have a sense of where potentially this could work, where internationally? Can you give us a hint?
CIL: Well, we just opened up in Puerto Rico probably five or six years ago, as well as in Canada and the brand is doing really well. Actually, the
unit economics in both those markets are stronger on top of the already strong U.S. unit economics.
We think there is potential in a number of places in Europe, Julia, also in Latin America, and even potentially in Asia Pacific. So, we just inked the
deal Sunday night at 11:54 p.m. so we are still working through --
CHATTERLEY: Give me some time.
CIL: We're working through something. We're just getting started here. But it's really exciting and it is a great team.
CHATTERLEY: I like to catch you when you haven't had much sleep and ask you some other tough questions. In light of that fact, what about more
acquisitions? I mean, I was just looking through your latest earnings, you are generating a lot of cash. You've bumped up the amount of money that
you're providing, or giving back to your shareholders, a $1 billion share repurchase program.
I mean, you have the cash available, whether you're choosing that it's best to give it back to shareholders rather than perhaps invest in other things.
Are you still looking for potential portfolio acquisitions and things that can perhaps add some further diversity to your portfolio now?
[09:25:01]
CIL: Well, I think that's what's great about our company and our business is that we generate a lot of free cash flow and we have the ability to
invest that cash into our businesses we've had -- we've done with Tim Hortons and with Burger King. We also have the ability to give back to
shareholders with a best in class dividend as we currently do, and with share repurchases, as we've done as well, and we share it after the third
quarter.
And we've done accretive M&A as well with Tim Hortons, with Popeye's, and now with Firehouse Subs, so we have a lot of flexibility and optionality,
always with a mindset of doing the right thing for the shareholders and creating value for the business.
CHATTERLEY: Let's talk about your current brands. You've obviously got, as we've mentioned, Burger King, Popeye's, Tim Horton. I was just looking
again through some of the challenges and I'm sure you're sick of talking to them, whether it's rising food prices or its labor shortages here in the
United States, and that's had a material impact or have been a challenge for Popeye's specifically. I read 40 percent of stores have at some point
had to reduce capacity.
Where does that stand today? And what's the workaround? Is it paying workers more? Is it different hours? Is it perhaps altering the menu items
to reduce the number of people that you require in stores? What are your franchisees saying?
CIL: Yes. We have an incredible group of franchise partners, Julia, for the entire business for Popeye's, for Burger King, for Tim Hortons, and the
same for Firehouse Subs. They've been doing an incredible job, even in a very difficult circumstance here and what they were doing is focusing on
talent acquisition now and finding different means to attract people into the business.
We've been testing, accepting applications by text or SMS. We've been doing big events in many of our different markets around the U.S. and Canada to
create awareness of the great opportunities that exist in our business. There's also work to be done on making sure we simplify the operations so
that we create a really positive environment in the restaurants, and ultimately creating a great employee value proposition for team members
that join these brands because the opportunities for growth and for them to take on more responsibility, and eventually maybe even become a franchise
owner in our business is really compelling.
And so we are working together with our franchisees to create that environment. And in the meantime, in the near term, things have gotten a
little bit better from where they were probably 90 days ago, four or five months ago. But it's still a priority for us, and something we're working
closely with the franchisees to address.
CHATTERLEY: Wow. It is a bit early in the morning for crispy chicken, but it does look very delicious. We are showing some pictures of that.
I want to talk to you about COP 26 and sustainability, and we had one of the biggest or the Chairman of one of the biggest miners in the world on
yesterday, and he made an interesting comment. He said, "If you're turning round and saying that your net zero plans are 2050, then you don't have a
plan." Because you can do it quicker if you know what you're doing.
And I was sort of looking down, and obviously, it's a lot of work. As you've discussed, when you have franchises, you have them operating in over
a hundred different countries, but you do talk about 2050 as part of your plan.
Can you accelerate that? What's the aim? And you know, when someone goes into one of these stores and buys a burger, do they care about how
sustainable Restaurant Brands are? What's your sense? Are you being pushed by your consumers and by your investors, and are you being pushed enough?
CIL: Yes, it is a really important priority for us as a company and it is something that came to the fore probably a couple of years ago.
It has been an issue for some time that we've looked at it and we looked at it from an investor relations standpoint. We've looked at it from a
regulatory standpoint, but the reality is, is that today, it is becoming a priority for the consumer. It's also becoming a priority for the employees
that we're trying to recruit to join our company, the really talented people that want to be part of RBI in our great, great brands. They want to
know what we're doing to make an impact on the environment.
And so it's important to me, it's important to our Board, it's important to our entire company, because it is important to our guests, and to our team
members and folks that want to join the company. And so we've prioritized this, we've done the work. We've made an assessment.
We didn't just come out with a press release and say, hey, we're going to get after this in 2030 and 2050. We actually did a full assessment of our
carbon footprint around the world through every aspect, not just the company stores that we own, but also franchise stores, the supply chain
distribution, the vehicles that are used by field teams and the distribution company.
So it's a pretty broad --
CHATTERLEY: It is a lot.
CIL: It's a lot, so we are committed to making an impact as fast as we can. But we want to make a real impact. This is not something cosmetic or
aesthetic. We want to do the right thing for the planet, for the people and communities in which we operate, and that is the aim and intent that we
have as a company.
CHATTERLEY: So, very quickly, workers are actually saying to you, hey, what do you feel about the planet? What do you represent in terms of
sustainability? Perspective workers are literally having these conversations with you before they come and join.
[09:30:10]
CIL: Yes, five days ago I was at a university speaking to a number of students, MBA as well as undergrad, and the first question, the second
question, and the third question that came up were questions around our sustainability plans for each of the brands. And it's important, it's
really critical, and we believe it's critical as well as a priority for our company and for our brands.
CHATTERLEY: I love this generation. That's really awesome in my mind, yes. Congratulations on the acquisition and come speak to us soon, please.
Great to chat with you, as always.
CIL: Thank you, Julia.
CHATTERLEY: Jose Cil there, the CEO of Restaurant Brands International, great to have you with us, sir. Thank you.
The market opens next. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. A bit of a tepid Tuesday on Wall Street. Investors not charging ahead just yet even as new data shows U.S.
consumers are most definitely charged up. Shoppers still snapping up cars, furniture, electronics, and home improvement materials. Overall spending
rose 1.7 percent. That's the third straight monthly advance, maybe buying early ahead of the Holidays as well in case there are shortages.
Tesla shares in the meantime bouncing a bit after three straight days of losses. CEO Elon Musk has sold an additional chunk of stock more than $900
million worth. Musk has now sold almost $8 billion of stock over the past six trading days, which continues to put downward pressure on the shares.
Pfizer meanwhile, opening lower. The company announcing a deal today that will make its COVID-19 anti-viral pill widely available around the world
particularly to lower income countries. This is great news. Merck has entered into a similar agreement for distribution of its competing
antiviral.
[09:35:01]
CHATTERLEY: E-commerce platform, Jumia, operates in 11 countries across Africa with particular focus on Egypt and Nigeria. Its services include an
online marketplace, food delivery, and a payment platform called Jumia Pay, and it is growing fast. Orders were up 28 percent in the third quarter and
active users up some eight percent.
Joining us now is Sacha Poignonnec. He is co-founder and co-CEO of Jumia. Sacha, great to have you on the show once again.
I remember in the second quarter, you went full acceleration speed on promoting making sure that people across the continent we're aware of Jumia
and what you represented. Facebook, Google, influencers on social media, it looks like it paid off.
SACHA POIGNONNEC, CO-FOUNDER AND CO-CEO, JUMIA: Yes, thank you, Julia for having me. It's a pleasure to be with you again. And I would say it is
starting to pay off, as you pointed out. We had a record number of holders, record number of consumers, GMV growing. So I think it's paying off, and
this is happening on the back of, of course, good unit economics, right, because we have been consistently improving our unit economics.
So for us, as we announced a quarter ago, it's time to scale. It is time to bring the company to scale, and as we do that, also to achieve
profitability for scale, and very pleased with the results of Q3 and hopefully, more growth to come in the future.
CHATTERLEY: Just in terms, so that my viewers understand what you offer, I was just looking through, particularly on the payment side, people can
now buy bus tickets in Nigeria, and students in Egypt can now pay their university using the app. This is not just a way of paying for shopping
order online or a clothing item, you really are scaling up the capabilities of what the payment app represents. Is this the sort of growth and
profitability potential and future for the company, do you think?
POIGNONNEC: It is one of them. Definitely, we want our core business, which is for consumers to buy, you know, physical goods to continue to
grow, and I think that's the core of the business. And definitely, we want to see a lot of growth in that. And we've seen very good growth, especially
for example of the fast moving consumer goods category. And that is the core, I would say, of the business and we want that to grow.
Definitely those use cases, as you say paying, you know, for bus tickets or paying for university fees, they drive relevance of Jumia for the
consumers, and they provide more opportunities for consumers to use it. And especially more attractiveness to Jumia Pay, which is a core part of our
strategy.
So, it's not one or the other, I would say, it is the combination of all that that drives the relevance and the growth of Jumia, and of course,
mentioning also the food delivery, which for us is a core category, doing very well, growing very well. We have an app called Jumia Food where
consumers can order from restaurants, and also for grocery items and delivered within you know, 30 minutes in the main city, so that is also
growing very well.
I think it's a combination of the three that drives strong relevance, and of course, stronger growth going forward.
CHATTERLEY: Just very quickly, what proportion of your sales are made via mobile versus perhaps desktop because as you see more and more people get
mobile phones, I'm going to believe, around 28 percent now, Sub Saharan Africa connected to the internet. As you see that percentage rise, that
opens up the opportunity simply have more users, and to your point, everything feeds everything else.
POIGNONNEC: Definitely, and mobile, I mean, you know, we exist, and Jumia has been able to fly thanks to the mobile and to the Internet access that
the mobile has provided to millions of people. And we see of course the vast majority of our usage and the browsing and the buying happening on
mobile.
We see also some users who like to stay at home from the computer or from the office. So, you know, some users like to still do that. But definitely
I think the mobile has revolutionized the way consumers in Africa, the way individuals and people access the services and access the internet. And
certainly, this is an opportunity for us to bring, you know in the mobile phones of consumers the ability to buy product, but also to access all the
services that we mentioned earlier.
CHATTERLEY: And you're heading towards the Holiday Season as well and Black Friday is a big event here in the United States and in other places
around the world. I believe Nigeria is also adopting it, and it is going to be a big moment for you.
How many people are you expecting to make purchases or you're hoping make purchases in the marketplace, and obviously businesses on board are ready
for that?
POIGNONNEC: Hopefully, hopefully, we will beat our record, which you know, we just started our record quarter in Q3, and I think that you know,
given that we have said we want to accelerate and we're confident about the acceleration, I am hopeful that we can beat our record in Q4.
And certainly Black Friday is an opportunity for consumers to discover Jumia, and we have, I would say brought the event of Black Friday in our
country about nine years ago. And now, it has become a sort of shopping festival for consumers to find the attractive products that they want to
buy either for yearend or just to enjoy you know, to enjoy buying it for themselves.
[09:40:11]
POIGNONNEC: And there are countries in Africa, where you know, the shopping holiday goes until December, but also into January, because you've
got a lot of consumers who will get, for example, their yearend bonus at the end of December, and we've got also a lot of Muslim countries where we
operate where Christmas is not of course celebrated, but nevertheless, their yearend celebration.
So all in all, you know, there are lots of reasons for consumers to shop at the end of the year, and until January, and there are some differences
between the countries. But we certainly hope that the Black Friday Jumia festival will please a lot of consumers and will convince also a lot of
consumers who have never transacted online to try for the first time, and we're certainly working hard to making it happen.
And this is also you know, we are a marketplace, so this is the time for our sellers to do a lot of business and our sellers have been suffering a
lot with COVID and with a lot of disruptions in the supply chain, et cetera.
So, we're certainly hoping that they will do very well, and it's not just Jumia doing well here. It's a lot of sellers and it's a lot of logistic
partners who are in this together to thrive.
CHATTERLEY: Yes. Absolutely. Come back next month, please, and talk to us and let us know how it goes and we'll talk about those supply chain issues,
too. Sacha, always great to chat with you. Thank you.
POIGNONNEC: Thank you, Julia. Take care.
CHATTERLEY: The co-founder and co-CEO of Jumia there. You, too. Thank you.
All right, coming up here on FIRST MOVE, the creator of Long Neckie Ladies and "Time" Magazine's first ever artist in residence, and by the way, she
is just 12 years old. That's next. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE.
What do a brontosaurus, a 12-year-old digital artists, and "Times" 100 Women of the Year have in common? Long necks or Long Neckies, to be
precise.
These incredible pieces were created by 12-year-old, Nyla Hayes, who is also "Times" first ever artist-in-residence, Nyla has created digital
versions of all 100 inspiring women with elongated necks inspired by her favorite dinosaur.
And in the last hour, the collection has gone public for the first time and will be available to buy tomorrow. I began by asking Nyla how this moment
feels.
[09:45:01]
(BEGIN VIDEOTAPE)
NYLA HAYES, DIGITAL ARTIST: I'm like so honored and excited, and like not many people get this opportunity so it is like really, really very special
to me, you know so, yes.
CHATTERLEY: I think you're very special, too. I mean, people will be looking at these artwork, and we'll show people all the different images.
These are all inspiring women. This is incredible artwork. How long did it take you to do this?
HAYES: Well, it was like, definitely, like the hardest thing I like ever done. And it was like, my first time working on a deadline. And it took me
about an hour a half to just make one piece, because I am homeschooled, so I start school at around 6:00 a.m. So in order to make everything work, so
I was like, very determined to get it done.
CHATTERLEY: So you had about three weeks, I believe, to get all this done. You had to fit it around your schoolwork as you were saying. You're
12 years old, let's just be clear. And as you said, you were facing your first deadline.
Were you daunted? Were you frightened? Were you -- how did you overcome that?
HAYES: Well, at first, I was really nervous. But, you know, a lot of support from my mom really helped me through it because she's always been
there for me.
CHATTERLEY: So you started drawing when you were four years old, then you got to nine years old, and your parents bought your phone so that you could
create digital art, and you started producing what we're looking at now, which is long neckies. And the inspiration, I believe for those is your
favorite dinosaur, which is a brontosaurus, which obviously has the long neck.
What do you love so much about Brontosaurus? And then we'll talk about the women.
HAYES: Well, I just really, really liked it, how like long and pretty their necks were. They were like, really beautiful and strong to me. So I
just really liked that, and at the time, you know, I was four. So, I didn't know what to call them, so I just call them long neckies because that's how
I knew them from.
So I basically just put that together with the women, because I think of women that's like beautiful and strong. So that's basically what I did, and
I just put the two together and I made the long neckies.
CHATTERLEY: I mean, having a long, graceful neck in this case, elegance and power, I think that embodies some of the women, all of the women that
you were drawing here. I mean, Princess Diana is one that jumps to mind, Coco Chanel. Which was your favorite one?
HAYES: That's a really hard question, but I have to say Frida Kahlo, because, you know, I really think her art is like very inspiring and it
tells a story with it, and I really like that and I want to do the same with my art. So, I really like Frida Kahlo.
CHATTERLEY: The backdrop as well looks like floral confetti. That was what I thought when I first saw that, an explosion of floral confetti.
The real game changer here though, was non-fungible tokens because you were creating your long neckies and I assume, just your family and friends who
were seeing your artwork, suddenly, then your uncle comes in and says, hey, there's this thing called NFTs, non-fungible tokens, and that allowed more
people then to see your art and people started to recognize your talent and buy your art.
HAYES: Yes. It was like, around March, I believe, when he talked to my mom about NFTs because, like you said, my family just were like the only
people who actually knew about my art and I -- they knew that I wanted to do something with my art, but they didn't know what to do, or we didn't
know what to do with it.
But yes, so he found NFTs and he thought it was like a really cool idea for me to put my art as NFT. So that's what we did.
CHATTERLEY: And just remind me, how much money you have made from selling your art, Nyla?
HAYES: I think my art generated around $4 million. But yes.
CHATTERLEY: Wow. Nyla, you're a millionairess. How does that feel?
HAYES: It feels crazy, actually.
CHATTERLEY: Crazy.
HAYES: It feels like I'm dope, but yes.
CHATTERLEY: So I'm sure given that you've mentioned her a few times, your mother is going to have something to say about how you spend some of this
money, but if you are allowed to spend the money on anything, something, what would you buy? What would you do?
HAYES: Like most definitely a trip to South Korea because like I'm like huge Kpop fan. My favorite group is Stray Kids and my bae is HanJin, who is
actually an amazing artist himself, so that would be like really, really cool if I got to do that.
[09:50:08]
CHATTERLEY: What does your mom think about that?
HAYES: I don't know. Honestly, I think she is cool with it.
CHATTERLEY: But you're just talking about visiting on a trip. You're not talking about moving there? Or would you actually quite like to move there
one day?
HAYES: Well, that's why I'm taking a trip, so I can see if I want to move there. But I am thinking about it, yes, when I get older.
CHATTERLEY: Wow. And I hope there is some KPop bands watching this, because I'm sure they're going to pay attention to some of your art as
well. Have you drawn any of them?
HAYES: No, but I want to. I really do.
CHATTERLEY: I've often seen you discussed as being an inspiration yourself to young African-American women, whether they're going and want to
go into something in the digital sphere or otherwise? Do you see yourself as an inspiration to them? And who would you like to be an inspiration for?
HAYES: Honestly, I want to be like an inspiration for everyone. Because, you know, I'm a really shy like, introverted person. So I -- but I'm not
going to let that stop me really from following my dreams. So, I want people to look at me and say, well, if she can do it, then I can do it,
basically. Right? So that's how I want to be an inspiration to, I want to be integrated into everyone.
CHATTERLEY: What do you want to be when you grow up? Is this the future? Being an artist?
HAYES: Well, yes, I think so. I really, really like drawing and doing art. So, I think that's what I want to be when I'm an adult. And I really
want to keep on inspiring people with my art, even when I'm adult. So yes, I want to be an artist.
CHATTERLEY: I have to say, I feel like you're more adult than me, quite frankly. You're an inspiration. I cannot believe you're 12. You're almost a
teenager, you're going to be 13, I believe in January. So, we'll reconvene and see what you're doing at that point.
But for now, I just want us both to pretend we're long neckie women. So I am going to count to three and then we have to create our longest necks.
We're going to create an NFT.
HAYES: Okay.
CHATTERLEY: Okay, three, two, one. Nyla, thank you. Big heart to you. Congratulations. It's an amazing day.
(END VIDEOTAPE)
CHATTERLEY: A superstar. Okay, still ahead. Jumbo-sized stores, oversized earnings, the titans of the U.S. retailing world, they are out with their
latest results, and consumers are still buying in bulk, details just ahead.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE.
Call it a Big Box Bonanza. Walmart and Home Depot are out with impressive Q3 earnings, and Paul La Monica joins me now.
Paul, great to have you with us. What stood out for me it was how optimistic Walmart was about the Holiday Season compare and contrast with
Amazon who were relatively downbeat. What's going on?
[09:55:09]
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think, Julia, what you have here is that the return to normalcy that we have with more people being
vaccinated and venturing out is helping physical retailers, like Walmart and Home Depot. Obviously, they have a digital presence, too, but many
people are back out shopping in physical stores and you are seeing traffic up at Walmart and that is helping.
They are also investing in trying to use some of their own shipping to get a lot of these -- more of these products from Asia that are snarled in, you
know ports around the world, so that is something that is hurting small retailers, but big box companies like Walmart and Home Depot aren't facing
as many of these logistical supply chain challenges.
Obviously, Amazon isn't either, but yes.
CHATTERLEY: Yes, I get it. Retail stores' footprint is helping them and their scale in order to mitigate supply chain issues. Thank you for that.
Paul La Monica, I made you were very quick today. I apologize for squeezing you. We will get you back for a longer session later this week. Thank you.
That's it for the show. Stay safe. I talk too much.
"Connect the World" with Becky Anderson is next.
We'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
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