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First Move with Julia Chatterley
Today on First Move: U.S. Retail Numbers, UK Inflation Soars, Musk Football Madness; China: Current Heat Wave is "Strongest" Since 1961; Elon Musk Jokes on Twitter about Buying Manchester United; UFODRIVE already Operates from 15 Locations in 10 European Class; World's First All-EV Car Rental Company Expands into U.S.; Uganda Increases its Chocolate Production. Aired 9-10a ET
Aired August 17, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move" this Wednesday and as always lots to cover including the down elite some a win
streak; it's now five for five. The Bulls also hoping retail results can help the rally thrive but a key driver of the economy housing showing a lot
less drive, European gas prices and U.K. inflation not yet ready to dive.
And Elon Musk buying Manu, well, we could lie just to keep your hope alive however. Let's hope on Wall Street for gains there that we can derive the
U.S. futures you can see giving back. Some of those recent gains Europe also down to amid news that U.K. inflation rose by more than 10 percent
year over year in July that is a fresh 40-year high as you would expect bond yields in the United Kingdom responding.
As one would expect they're higher on fears that the Bank of England will have to get more aggressive just to tamp down those prices. It's a similar
concern all over the world, including in the United States too. New Federal Reserve minutes out today could show the Hawks firmly in command and not
prepared for a market friendly rate pivot at least not for now.
Inflation, of course, the number one concern for U.S. consumers, as well as those policy makers target the retail giant today completely missing the
target profits coming in more than 30 cents below expectations price conscious consumers forcing the firm to enter inventory purgatory slashing
prices on unwanted goods the company that themselves striking a more hopeful tone later for the year.
Now on the national level U.S. retail sales not rising but not declining either last month overall. Solid gains when you strip out energy and autos.
Christine Romans joins me now we did have some fun and games on our team this morning when we were trying to ascertain what on earth happened with
these numbers. When you strip everything out, it's OK. It's like well hang on a second. Why are you leaving? But I think the key point is we did see
fuel prices come down and people use that money perhaps to spend on other things.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: You're right, we were looking inside these numbers because the story is not that headline
unchanged from June to July. And it's not the story year over year, retail sales up 10.3 percent. It's behind those numbers you saw gasoline sales
fall, that's because gasoline prices fell right? And that freed up money in a lot of Americans pocket books to spend on other things.
We also saw this kind of mysterious drop in in auto sales, we'll see if that's revised or what exactly was happening there. But when you take out
autos, you take out gasoline; you had a healthy increase for the month for retail sales.
And so I think that's something that already a couple of economists are saying they're thinking about raising maybe their third quarter GDP
numbers, if this is going to translate into real consumption, that is a little bit stronger or above trend.
So you know, it's just one report, of course, but we take that with all those retail earnings, you can find these signs of resilience in the
American consumer. And you can see Walmart, for example, where the consumer was incredibly savvy; we talked about this 24 hours ago, exactly. Over a
target, though a different story where they have to slash prices to get rid of inventory to keep consumers from spending, consent and spending there.
And a kind of someone told me, Julia, that when you look at the higher income earners, you know, above, above $100,000, and higher, there's a lot
of cash still in liquid savings accounts. And there's a lot of money's still to be deployed to keep the economy going. It's the lower quintiles of
earners that paycheck to paycheck and people who are really kind of on the bubble here. That's where all of this is still feeling very recessionary.
And they're the ones who are starting to make the cutbacks.
CHATTERLEY: Yes, as always so much in there. I agree with resilient retail sales actually were that was the phrase I use this morning before the show
as well. And to your point about those that are earning more than $100,000.
Again, we talked about this yesterday, that was what the CFO of Walmart said, he said, actually, they're seeing three quarters of the market share
gains coming from household incomes above $100,000, which they're relatively more affluent than those who are suffering the most as a result
of these price rises.
But even they're being smart about how they're spending the money that with the savings that they're using to utilize in the savings that they do have.
What's your overall sense, because target was a real miss?
But it was about inventory, and it was about slashing prices. Is that an idiosyncratic story? Do you think and more about them rather than the
sector specifically because we're still looking for that oh, word and the recessionary signals? And I see signs of concern. I don't see recession in
what we've seen, at least for this quarter.
ROMANS: Yes, me too. Well, I mean, I think that the difference between you know Walmart target is a management story.
[09:05:00]
ROMANS: What kinds of inventory that they were stocking kind of story? And just how quickly, they reacted and pivoted but certainly very interesting
to see those two different categories.
And you know, we heard from the Walmart CEO and the CFO, too, is that their customers are searching for value. And so, target maybe has a slightly
different mix of consumer. It'll be really fascinating to see what management does to pivot here going forward, although you mentioned that
the target management is a little more optimistic ahead going forward.
CHATTERLEY: What happens Christie Romans, thank you for that?
ROMANS: You're welcome.
CHATTERLEY: And on inflation nation, the U.K. prices are rising at a fastest rate in 40 years and no wonder in just the past 12 months, natural
gas prices have risen by whopping 96 percent petrol up by 44 percent.
Anna Stewart has been poring over the numbers for us the key part of this, as bad as that sounds answer is that a lot of what contributed to the price
rises here was food. And it was things like cheese, cereal, eggs, bread, basics. So for the lowest income families, it doesn't feel like 10 percent
I'm sure it feels a lot higher.
ANNA STEWART, CNN REPORTER: Well, exactly, and the headline figure came as a giant shock to everyone including the Bank of England at top their
expectations for the last month as well coming in at over 10 percent The highest inflation rate, we've seen in the U.K. for 40 years. And as you
say, we saw the same usual categories rising in terms of prices that we've seen month on month in electricity and gas in fuel. You mentioned gas
prices up 95 percent over the last year, absolutely extraordinary.
But it's now where we're seeing that delayed effect of increased input costs in terms of energy, perhaps also labor shortages, and the struggle
and the fact that people are having to pay employees more to retain staff, we're seeing those costs now feed through too many other categories and
food in particular.
So for the last 12 months, food prices now up 13 percent. And for breads, Julia, their real income is falling at the fastest rate on record down 3
percent over the last quarter one you take inflation into account. So what as you say is most worrying about that is how is that going to impact the
poorest households in the U.K.?
And in a report from the Institute of Fiscal Studies earlier this week said that for them. Will feel like 11 percent inflation for the richest quintile
of the nation will feel like 18 percent inflation for the poorest because so much of their income goes on energy and food, Julia.
CHATTERLEY: Yes, again, you raised two really important points, that it feels far higher for those that earn the least in the country. But also to
your point about real wages, what we're saying there is your wages might be going up, your boss might be giving you a raise.
But if prices are accelerating far more than that raise your net got less money, huge challenge huge challenge to the Bank of England raising rates
in the face of this to try and contain prices when growth is already slowing.
STEWART: And in many ways, they'd be more aggressive than many central banks. We've had six rate hikes in the U.K., and the last one was half a
percentage point. They're expecting inflation to top out in October over 13 percent. But as I said, this inflation rate for the last month has
definitely topped their expectations.
And so there'll be many worries, I think now that they're going to have to take more aggressive action. Plus, what will the U.K. Government do when
you're looking at how you can insulate the lowest paid in the U.K. How you can help them with this cost of living crisis?
Well, we really need a sort of functioning leadership at the top of the government. And right now we are still in the midst of a very long
protracted battle for a new leader of the Conservative Party to take over from Boris Johnson.
And that's got another three weeks to go, which is going to be very painful for people in the U.K. wondering how they're going to pay their bills in
the next few months. They want to know now what help will be given to them, Julia?
CHATTERLEY: Yes, waiting eagerly for more news on that. Anna Stewart, thank you for that.
Now for the hot prices to hotter weather China issuing the highest heat warning to around 140 cities and counties. The government says the current
heatwave is the longest and strongest recorded since 1961.
Selina Wang joins us. Selina, we seem to talk on a daily basis about the implications and the consequences of this hot weather. It comes as the
Chinese Premier Li Keqiang said to the sixth largest provinces, look, you have to do more to support economic growth.
And it was exactly one of the provinces that we were talking about yesterday that as a result of the hot weather is conserving energy. So
industry can't work. I mean, something's got to give surely.
SELINA WANG, CNN CORRESPONDENT: Yes, Julia, this is a story we've been talking about not just for days now but for months. This heatwave in China
has lasted for more than 60 days, the longest and the strongest, as you say, and it's not just the heatwave and the extreme weather that's hitting
China's economy.
This is a compounding effect that comes on top of the deep economic pain that China is already reeling from dealing with because of China's ongoing
COVID restrictions and zero COVID policies.
[09:10:00]
WANG: And the bad news for the people here and for the economy is that officials say the heat is only expected to get worse. It's caused droughts
in large parts of the country.
Parts of China's very important young sea river have actually dried up with images of the riverbed dried and cracked. Now to try and induce rainfall
some regions along the river are seeding clouds, with planes firing rods into the sky.
Now China's central province, Hubei province has become the latest to announce that it's going to try this method to seed the clouds. That's
because authorities say that in Hubei province, at least 4.2 million people have been affected by severe drought since June.
More than 150,000 people there are having difficulties accessing drinking water and nearly 990,000 acres of crops have been damaged. This extreme
weather it's led to crop failures across China in the South, the heat has killed crops while in the north; there's been rain and flooding that's also
led to crop failures.
Officials have said this extreme weather is putting pressure on inflation. It's pushing up the prices of food like fresh vegetables. This extreme heat
we've been talking about how it's also caused not just in China, but this spike in demand for air conditioning that puts a lot of pressure on the
power grid and China's Sichuan Province.
They've ordered all factories to shut down for 6 days. This is a big deal because it's a key manufacturing hub for semiconductor solar panels. And
it's going to hit factories of major companies including Foxconn and Intel.
And as I said earlier, China's economy it's still reeling from the impact of zero COVID of snap lock downs. This is worsening the economic pain. Amid
all of this China's Premier Li Keqiang is saying that the economic recovery in China is at its most difficult point right now.
On Tuesday, he made an unexpected visit to Shenzhen, which is China's technology hub. And he met with top officials from 6 major economic
provinces. He met them to urge them to boost support for local businesses and what he said was asking those leaders to take the lead here and trying
to stabilize China's economy, Julia.
CHATTERLEY: Selina, great report, thank you Selina Wang there.
OK, let me bring you up to speed now with some of the other stories making headlines around the world. U.S. Representative Liz Cheney lost her
congressional seat Tuesday night to a challenger backed by former President Donald Trump.
The Wyoming politician has become the Republican Party's most outspoken critic of Trump. Cheney made no official announcement about her future
plans. But she's hinting at possible presidential run.
CNN's Jeff Zeleny joins us now from Jackson, Wyoming. Jeff, we can predict or talk about what the possible fireworks would be if she chose, ultimately
to run against a reattempt by a former President Donald Trump as well but actually, for an international audience.
What I want to focus on is the fact that of the 10 Republican House members that voted to impeach Trump. She's now the eighth won't return for various
reasons. So we can talk about her future. But I think we should also talk about what the future of the party looks like and the ongoing influence
perhaps, of the former president?
JEFF ZELENY, CNN CHIEF U.S. NATIONAL AFFAIRS CORRESPONDENT: Oh Julia, there's no question that Donald Trump still remains fully in control of
this Republican Party. You could just look at the margin of the defeat from Liz Cheney on Tuesday night here in Wyoming.
The Trump back candidate Harriet Hageman, who was once a supporter of Liz Cheney herself, defeated her by more than 30 percentage points. So yes,
that shows that Donald Trump is still fully in control of the Republican Party, at least here in deep red States like Wyoming there is no doubt
about that.
But Liz Cheney talked in her concession speech that she is planning to continue her fight forward to a wider audience. She called on democrats,
independents and republicans who want to stand up to the election lies and misinformation to save democracy, as she says to join her for what is the
ultimate question. But she offered a little bit more of a sense of her thinking this morning on the NBC Today show.
(BEGIN VIDEO CLIP)
REP. LIZ CHENEY (R-WY): Are you thinking about running for president? That's a decision that I'm going to make in the coming months today. And
I'm not going to make any announcements here this morning. But it is something that I am thinking about, and I'll make a decision in the coming
months.
(END VIDEO CLIP)
ZELENY: So one of the reasons that she's going to wait a few months is she still has four more months in her seat in Congress. And during that time,
of course, she is still in her position as vice chair of the January 6th committee that's looking into and investigating the President's role in the
attack on the Capitol back on January 6th of 2021.
So those hearings are going to begin resume in September. So after all of that is done, I'm told next year, she will give some more thought and
decide fully to go forward with running for president or not.
But in the meantime, she'll have a new committee to basically be in the wings planning on this. Overnight she actually filed papers with the
Federal Election Commission, changing her campaign account to a leadership pack which is just some you know a paper work to allow her to spin and
raise money.
[09:15:00]
ZELENY: But she's calling that the great task. So her new committee is called the great task, of course a historic reference to Abraham Lincoln
from the Gettysburg address, Julia.
CHATTERLEY: Yes, absolutely, I'm just trying to imagine the two of them, Cheney and Trump on stages their presidential candidates. Fireworks is the
word I would use. Jeff will see great to have you with us, thank you Jeff Zeleny there.
OK, straight ahead, not quite retail rush but not a full lie though. We'll look at the strength of the American consumer next. And the rental car
market gets an electric reboot, I speak to the CEO of UFO drive, about overcoming some astronomical hurdles, stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move", Elon Musk creating a commotion with his tweets once again. The richest man on earth said "I'm buying
Manchester United you're welcome". It's one of the world's biggest football clubs with a market cap of more than $2 billion. Just hours later he
tweeted "No, this is a long running joke on Twitter. I'm not buying any sports teams.
Paul La Monica joins me now for our latest "Oh Elon" moment, 4.5 hours, 17.5 percent I believe pre market share rally games. Later, the dream was
alive. Red Devils were going to be Musketeers, but no.
PAUL R. LA MONICA, CNN REPORTER: Alright that's all I can say Julia, is boy, Elon added again. Yes, you pointed out that Manchester United stock
which does trade publicly on the New York Stock Exchange has pared some of its pre-market gains but at last check it's still up about 5 percent which
is just absurd since Musk has pretty much stated that he's not buying - or any other sports teams. I haven't checked to see what the shares of
Juventus and Dortmund which also trade on global exchanges are doing maybe he's going to go after them next.
I've just losing any patience muskies.
CHATTERLEY: Ability
LA MONICA: That musk continues to make jokes like this on Twitter. It is a publicly traded company. He's got to take things more seriously. I wonder
if the SEC is going to slap them on the wrist again, not that he's going to care, but they might need to do something.
CHATTERLEY: Yes, I mean, there's going to be a point where it's the boy who cried wolf where nothing will be believed on Twitter, but perhaps maybe
that's a good thing.
[09:20:00]
CHATTERLEY: I mean it occurred to me that with the break fee that he may end up paying Hang on the Twitter deal he actually could have bought
Manchester United that's how big that deal is relative to this one. I do have a plan B though for suffering Man United fans and it's called the M
62. I think there's a 32 mile drive between Anfield and other Old Trafford senior guys. You want to go and support the property and then Liverpool's--
LA MONICA: I hear that Man City has done better than man you as of late which I'm sure is a sore spot for some of your viewers. Maybe he'll go
after them next maybe he'll buy the fictitious team on TED lasso. They might need a new owner as well. So I think that could be a plot point.
CHATTERLEY: Telling Man United fans that they have to go to support Man City is worse a worse travesty than me telling them to go and support
Liverpool.
LA MONICA: I'm doing my best for the national audience. I'm more Yankees, Red Sox, American sports tried and true, I apologize. At least I'm calling
it football instead of soccer.
CHATTERLEY: Yes, exactly, will lead them to hate me not you for this one. Yes, Paul LA Monica, thank you for that. I agree with you, words fail, but
we tried moving on swiftly, thank you. Elon Musk may not be buying MANU, but Americans do continue to buy despite rising prices this summer.
As we reported earlier, U.S. retail sales came in unchanged overall in July. Positive second quarter earnings from retail giants like Home Depot
and Walmart showed consumer spending remains resilient. Strong earnings have relieved some recession fears but here are some cautious signs to off
to target completely missed the mark as customers scoffed at big discounts.
Brian Nagel is managing director and senior analyst at Oppenheimer, and he joins us now.
Brian, great to have you on the show! Let's talk overall, because there are some I think, idiosyncratic stories like the inventory build that we saw at
Target, which clearly hurt them this quarter relative to others that are showing resilient. What's your take overall? And then we'll drill down?
BRIAN NAGEL, MANAGING DIRECTOR AND SENIOR ANALYST, OPPENHEIMER & CO. INC.: Yes, look, I mean, it's an extraordinarily fluid environment. You know, I
talked to our investor clients who have daily and this is the topic we're discussing is this, how many puts and takes out there? If I step back, you
know, and really analyze closely the data, then probably more importantly, the commentary from some of these leading companies that report lately,
like Home Depot.
But I think the health of the U.S. consumers actually quite good. You know, despite all of these concerns, all these market concerns of a looming
recession, when we pull back and spending a housing crisis, etc. The health of the consumer looks quite good.
Now, I think what we are seeing, and this is probably evident in results from companies like Target and Walmart, these retailers, I mean, despite
their power they have in the market, frankly, how good of operators they are, you know, they've been misaligned of inventory really misaligned as
the economy has been pulling out of the COVID crisis, you know, in other words made simply said simply, they have too much a product that people are
no longer buying.
OK, so they've had realignment. So that's one factor that I think is further complicating this backdrop, but again, overall, I think the
consumer environment here is quite healthy.
CHATTERLEY: It's also difficult to judge because the, the inventory build was part of the big issues with what we saw for overall growth in the U.S.
economy in the first quarter. But to your point, if you didn't have the inventory throughout the pandemic, you struggled as a business simply
because you couldn't provide and we know the supply chain became a problem.
So even when I look at Home Depot's results here we saw sales rising what 6.5 percent year over year, but the merchandise inventories grew by 38
percent. And I don't know whether that's necessarily a good thing now or a bad thing. A good thing because you've got the stock in hand, should you
need it or a bad thing, because at some point, you're not going to sell it, you're going to have to discount how do we separate good from bad in this
kind of environment?
NAGEL: Yes, great question. So in terms of Home Depot, you're one of the big positives in that model is given what they sell the home improvement
products, there's not as much that either seasonal risk or obsolescence risk, you know, so if they are heavy inventories, they can typically hold
on that inventory and then ultimately sell it in full price without any significant promotions. Now that dynamic is obviously not true. You over
clothing type retailers or other chains, other operators that sell more seasonal type product.
But so to answer your question, in the case of Home Depot, I'm not too terribly concerned with what seemed to be higher inventories. No, I think
to me, that does show that the supply chain constraints that have weighed upon the company are beginning to lead up, you know, so that's probably a
positive.
But elsewhere, again, I don't necessarily follow up clothing companies that closely, but you'll that's where I would be worried you start seeing
clothing companies are too heavy in inventory, because that would lead to pretty significant price promotions.
CHATTERLEY: Yes, it's interesting, isn't it? And then if we do talk about the likes of Walmart, for example, because what we heard this week was a
substitution effect going on less deli more canned meats, for example, I mentioned already on the show, and we've talked about it for a couple of
days now with Christine Romans.
[09:25:00]
CHATTERLEY: The CFO saying, look actually we're seeing people at higher income levels coming to us because they're looking for more value? Is that
a sign in your mind of impending recession or just smart behavior and mid severely rising prices? Because that goes to another question are we headed
into a recession? Or aren't we? And what are the retailers telling us at least this quarter in your mind?
NAGEL: Sure, so let me I'll take that piece of so first off, I just want to be clear, I mean, I don't follow Walmart officially, I've got a colleague
at Oppenheimer that he does some great work on it. But of course, as a retail analyst, or consumer analyst, like you look very closely on Walmart.
And so to answer your question, so I think it's when Walmart's talking about now seeing more indications of higher income consumers coming to
their stores, I think that's a smart consumer behavior. You know, they are look, we can't be there. There are pressures out there, there's no
question.
I mean inflation has been aggressive, it has been broad based, and that those broad based inflationary pressures are impacting at some level
consumer spending, or at least the dynamics of consumer spending. So you're seeing even now higher income, more wealthy consumers adjust their spending
habits and turn to more of a value type retailer, like Walmart, which to me, again, is a smart behavior. That's not necessarily, you know, an
indication of some type of significant recession coming.
Then on the recession topic is going with a caveat out that to look, I'm not an economist, I'm a stock analyst. Of course, I keep a very close eye
on the economy. But a lot to me a lot this talk of recession is largely misplaced.
I mean, we're coming off of, you know, within certain areas of retail consumer, and we're coming off some extraordinarily strong years, you know,
the pandemic, and in the stimulus associated, the pandemic proved extraordinarily, it was a very massive tailwind, you know, for goods
related spending.
So I think inevitably, we're going to see slower spending those categories, as these dynamics are saying one was. To me, that's not necessarily
consistent with the traditional definition of recession. So I saw I think a lot of talk. I mean, my point I make is, I think a lot of talk of recession
may be misplaced. The trends are slowing, they're normalizing. But again, I don't think that's necessarily a bad thing.
CHATTERLEY: Yes, which is why we go from smart spending to smart analysts that I'm lucky enough to have on the show to help you separate the two and
forgive me for throwing all sorts of questions that you that are perhaps not in your remit. But that's why it's great to have you on, Brian, thank
you so much. And I apologize for that. Managing Director and senior analyst at Oppenheimer, we'll speak again soon thank you.
OK, at a time when the cost of renting a car is out of this world, UFO drive promises to block the market with fixed prices and electric cars the
CEO of this driving disrupter up next.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to "First Move" and suddenly not such a wonderful Wednesday on Wall Street. The DOW falling for the first time in five
sessions, the S&P slipping from a three month high as Investors await the Federal Reserve's July minutes meeting, meeting minutes UBS the latest
broker warning against chasing stocks higher, with the Fed likely tightening on into next year. Consumers remain cautious to U.S. retail
giant targets profit plunging 90 percent from last year as we've discussed, as buyers continue to search for cheaper alternatives smart spending.
Brian just called it Chinese tech giant Tencent, meanwhile, also reporting its first ever year over year revenue drop amid weaker advertising sales.
And of course China's second in command today also warning the country is "at its most difficult point and imploring the wealthiest provinces to
support growth".
OK, long lines, pages of paperwork and no guarantee you'll get what you thought you were paying for and to that soaring fuel costs and renting a
car can be a pretty miserable experience. Well, my next guest has been through it all and decided to do something about it.
Building an all-electric rental fleet across Europe that promises fixed prices, contactless service all controlled through an app. Backed by Hertz,
UFODrive is now expanding into the United States and picking up momentum with pedal to the metal growth.
And Aidan McClean is the CEO and joins us now, Aiden, great to have you with us. This was simply about streamlining and digitizing the whole
process of renting a car the added kicker of course, it's all EVs.
AIDAN MCCLEAN, CEO, UFODRIVE: Yes, thank you for having me this morning, Julia. As you mentioned in the introduction, UFODrive, as we pronounce it
here in Europe, came about from my own personal frustration, having gone through hundreds of poor car rental experiences.
I'm sure many viewers have had the same experience of the long lives paperwork, you know, being pushed insurance you don't need or fuel options
you don't need and you know, out of pure frustration, decided to do something about it back in 2018.
And in mid-2018, myself and co-founder, Renaud Marquet we launched UFODrive in Luxembourg where we live. And since then, we've grown to 20 locations in
10 countries. And now just in the last week and a half we've launched in San Francisco.
CHATTERLEY: I mean, this has been incredibly fast growth through a really tough period in time as well, particularly where people were commuting
less, which I think is kudos to you. I think a lot of people watching this will absolutely agree with the experience of trying to rent a car.
But just give us a sense of what you can get, how long can I rent this for the fixed cost, how the whole thing works in practice?
MCCLEAN: So we wanted to, we looked at the top 10 - points of car rental, as we outlined a moment ago, and we tried to automate every single part of
the customer experience. Well, UFODrive it's 100 percent about customer experience, solving everything.
And currently people hate to make them want to love it and also then trying to find a way to transition people to electric mobility, easy, fast and
simple. So what we did is we built everything into the app.
So UFODrive, there is no paperwork, there's no queuing, there's no being pushed insurance or fuel options, you go straight to your car, we call it a
two minute arrive and drive.
You book it completely on your app, you can arrive at your location, you are handheld via the app all the way through the process from registering
from your driver's license to damage inspection, all automated on the app.
You then open the car with your app, and you simply drive away in two minutes, all the frustration has been taken away. Well, that's only really
a beginning of the story. So once you drive out of the, what we call a UFO bay or location, well UFODrive, we are monitoring and watching and helping
you all along the way to make the transition from old internal combustion rental to electric rental as easy as possible.
You know, to try and take that range anxiety and all the things people worry about electric cars away. And that's what we've done. That's what
technology does. We've had no range and charging issues and over 20 million kilometers, 16 million miles since we launched UFODrive.
CHATTERLEY: That was exactly what I was going to ask you is, for people that are using an EV for the first time, they're charging anxiety. When I
can think of lots of different pain points to your point, I believe you've provide the first 150 kilometers free.
What's the cost after that and what proportion of the people that are actually buying these cars even go above that quite frankly. And I know you
also track to provide when the battery is running down and where the nearest charge point is because for me this is critical to the technology
that you're providing as well.
[09:35:00]
MCCLEAN: 100 percent. Well, you're talking about two points there. Firstly, price transparency, and transparency and simplicity and secondly, managing
your electric journey. So I'll address the first one first.
Like one of the things people hate about car rental is you never really know the price you get to get to the end, you get extra fuel options,
surcharge options, premium location fees, all these things thrown at you. Well, UFODrive the prices up front.
So you can rent, say a midweek from less than $90 for a one day EV to maybe above $100 for a weekend. Now all charging is included in our price. So
it's like free fuel.
So when you take a light for light basis into account, we are actually cheaper than renting an ice car from the traditional rental companies, when
you take into the fact that every single mile that you charge with UFODrive pays with.
And we do that because we have connectivity now to almost 200,000 charges on our network, so what our app does, and to address your second point, our
app directs the customer to the nearest available charger because we are monitoring the battery for you.
We always say to our customers don't worry about range anxiety; we'll worry about that for you. So what a customer is out - journey out in their
journey, they will receive an alert when their battery hits 50 percent or 30 percent or less, if their battery gets critically low.
And let's say for example, they weren't paying attention or they're just not familiar EVs, our call center will automatically call them to handhold
them to the nearest charger where UFODrive will pay for their charging.
So that's a key, key part of trying to encourage people to transition to electric, but they don't need to worry about range and charging. Because
you know, there's a lot of publicity around range charging. I personally believe that range of an EV is irrelevant.
It's all about having really easy and simple UX when you arrive at a charger or when you arrive at a charger knowing it's going to work or you
can pay for it. And that's what our app does.
CHATTERLEY: And they're not being a massive queue. And they're not being a massive queue by the way. Let's be clear, quick question.
MCCLEAN: This is a moment.
CHATTERLEY: Yes, exactly.
MCCLEAN: --crazy up.
CHATTERLEY: Yes, I know. It's the biggest challenge going to be scaling up in terms of cars and having the cars available for the people that want to
use them. And we're watching prices go up.
I know you've got some great names Tesla, Hyundai, but I'm watching the queues and the wait times even for Tesla's increasing to really worrying
levels, if you're trying to upscale up your fleet. Is that in addition to the money going to be part of the problem?
MCCLEAN: Yes, we've done well to date in terms of accessing fleet. Like our business plan is not to have a ridiculous number of cards, it's all about
user experience in lots of locations where people can access in downtown or in airports.
So, so far to date, we haven't come across massive delays and issues be very careful how we handled our fleet. It was always about the technology
first and getting the prime location established second, which is what we did.
And in some respects Julia and to an earlier point you mentioned that saved us during the pandemic because I can tell you that pandemic was not in
business plan. OK, our second full year of business bank, travel stops.
But we were able to ride that storm because we hadn't scaled this fleet to substantial numbers. But now we are in the process of scaling. And to date
the agreements we have with many of the OEMs are not holding us back in any material way.
CHATTERLEY: Yes. It's fascinating, and it's going to be fascinating to, I'll get you back in to track your progress. And my apologies, I think you
may win the prize for being the CEO who said his own company's name more times than anybody else because I got it wrong, but I saw the planet in
your little thing. And I was like, it has to be UFO, but I didn't really understand it so UFA.
MCCLEAN: It is UFO, but--
CHATTERLEY: But I got it right now.
MCCLEAN: Yes, it is UFO to English mother tongue, but Europeans can --.
CHATTERLEY: Oh, that's good. So we're both right. I like that kind of response. We'll talk again soon. Thank you.
MCCLEAN: Thank you very much.
CHATTERLEY: Aidan McClean, CEO of UFODrive, thank you. And from a driving disrupter to a mega mission to outer space, NASA finally ready to launch
its mega rocket Artemis 1 to fly around the moon.
Engineers at the Kennedy Space Center have been testing it for months to prepare for the unmanned mission. Tuesday night the 90 meter tall rocket
embarked on a slow four mile ride aboard a giant NASA crawler just like the shuttle missions and Apollo Saturn V rockets once did.
The final countdown for liftoff is set for August 29. We shall be watching now Car Space and now Chocolate. Can this show get any better to answer
that? Uganda isn't known for cocoa production with 60 percent actually of the world's supply coming from Ghana, and the Ivory Coast, but watch this.
(BEGIN VIDEOTAPE)
ELENI GIOKOS, CNN CORRESPONDENT (voice over): For more than 100 years, this family owned plantation was known for exporting raw cocoa beans. But Uganda
is not known for this commodity. Approximately 60 percent of the world's cocoa comes from Cote d'Ivoire and Ghana. However Uganda's production
volume has more than doubled in the last 13 years.
[09:40:00]
GIOKOS (voice over): Exports have jumped from nearly 14,000 tons per year to more than 44,000 tons in 2021.
STEPHEN SEMBUYA MAGULU, CEO, AFRICAN CHOCOLATE COMPANY: Me and my people kept on asking questions. Why is it that there's too much demand for this
cocoa that is being exported out of the country. What comes out of the crop, the cocoa that we're growing on our own - so we discovered -
chocolate. So this gives birth to the business that recalls African chocolate today.
GIOKOS (voice over): Stephen Sembuya Magulu is CEO of the African chocolate company, a local chocolate producer in Uganda.
MAGULU: We started manufacturing chocolate because we saw this as an opportunity to be pioneers in chocolate making in Uganda.
GIOKOS (voice over): In 2014, Magulu's company began producing its own chocolates after noticing the growing market for a refined product, a smart
move for the business.
MAGULU: Our business has been able to grow massively; we're producing 10,000 chocolate bars a month.
GIOKOS (voice over): This type of progression is one of the goals for the African continental trade area, building on existing efforts in production
to generate more profits on the continent, boosting opportunities to expand the value chain.
In 2022, raw cocoa beans averaged around $2.45 per kilogram, while the price of refined chocolate was around $5 per kilogram.
DR. EMMANUEL IYAMULEMYE, MANAGING DIRECTOR, UGANDA COFFEE DEVELOPMENT AUTHORITY: The potential for cocoa in Uganda is very bright. Government is
focusing on research and it's also providing free seedlings to the farmers to increase cocoa production.
GIOKOS (voice over): As the sector grows, the government is also planning to build a cocoa processing factory in the region, an opportunity to
produce more intra African trade changing the game or at least the region. This is broadening the cocoa markets in Africa. Eleni Giokos, CNN.
(END VIDEOTAPE)
CHATTERLEY: OK, that's it for the show. Marketplace Asia is up next. I'll see you tomorrow.
(COMMERCIAL BREAK)
[09:45:00]
(BEGIN VIDEOTAPE)
KRISTIE LU STOUT, CNN CORRESPONDENT, MARKETPLACE ASIA (voice over): In 1960, there were 980,000 Asian Americans registered in U.S. Census data
according to the Pew Research Center. Thus far to 2019 and they were 22.4 million. The number that's expected to more than double by 2016, at which
point pew says the number of immigrants from Asia will have surpassed Hispanic white and black immigrants in the U.S.
For Asia focused companies offering a taste of home that could be big business.
STOUT: I'm Kristie Lu Stout coming to you from Los Angeles on this special episode of Marketplace Asia. On today's program, we visit an online
retailer that is hoping to tap into the Asian American market and growing demand from non-Asian customers as well.
We discuss the startups plans for expansion despite supply chain challenges and inflation on the rise. Plus we meet with Christine Tsai, the CEO of 500
Global, a venture capital fund based here in California that is betting big on Southeast Asia, all this and more to come.
STOUT (voice over): In the corner of Los Angeles, this casual deli has been named one of the best new restaurants in the world by Conde Nast Traveler.
Yangban Society is a creation of Katianna Hong; a skilled chef who has cooked in Michelin starred restaurants, and is now serving up Korean fried
chicken.
KATIANNA HONG, CHEF AND PARTNER, YANGBAN SOCIETY: It's not trying to take Korean cuisine and elevate it. It's not trying to take American cuisine and
add Korean things to it. It's literally just food that's authentic to us.
STOUT (voice over): Hong and her team up a menu that crosses cultural boundaries, Korean bunch on Japanese pork cutlets and multiple suits. Also
on site a mini mart that's a nod to the convenience stores of South Korea and Japan.
STOUT (on camera): Is there a typical Yangban Society customer and what would he or she experience when they come here?
HONG: A customer base is like kind of all across the board if I had to pick one probably a young, the young Asian Americans, the newer generation.
STOUT (voice over): Asian American buying power is big and it's growing. According to Nielsen it was worth $1.2 trillion in 2020.
JO RAMPLODT, MANAGING DIRECTOR, ALIXPARTNERS: Asian Americans are the fastest growing ethnicity in the country and growing very rapidly, tend to
buy a lot of groceries for at home preparation at home consumption. So it's a growing number of people. And even disproportionate to that it's a very
growing market for food retailers.
STOUT (voice over): Food retailers like brick and mortar giants H Mart and 99 Ranch and E Commerce players as well.
ALEX ZHOU, CEO AND FOUNDER, YAMI: We have customer all the states that includes Hawaii and Alaska.
STOUT (voice over): Alex Joe is the CEO and Founder of Yami, an online marketplace for Asian goods based in Southern California. Born in China, he
came to the U.S. to study engineering in the Midwest. Joe says he started to import Asian goods because of his own struggle to source his favorite
products.
ZHOU: If you look at on the far left on the 30, Alibaba and JD.com, the many folks domestic market in China, Amazon always like fulfill the
mainstream demand. And nobody actually look at this like niche market right, which is Asian product for our seats.
STOUT (voice over): Yami sells over 300,000 products spanning a wide range of categories from beauty, to toys and food, including its top seller from
China. Instant Luosifen, a snail based rice noodle soup known for its infamous smell.
STOUT (on camera):-- sour, spicy, stinky, it's good.
STOUT (voice over): To boost its online offerings, Yami says he recently raised $50 million. The same month rival Weee, an online grocer that offers
Asian and Hispanic foods in the U.S. and now see had reeled in more than $835 million in funding.
The market is hot but headwinds are picking up. As inflation bites Joe says his labor costs are rising along with the cost of shipping and warehouse
leasing. Pandemic has also made it harder to import goods from Asia.
ZHOU: There was the international freight supply chain problems, we don't have enough inventory and warehouse. But the customer demand is still
increasing.
STOUT (voice over): The Gill remains optimistic. In the wake of supply chain disruptions, Yami incorporated new business models that includes
working with homegrown partners such as American mom and pop shops looking to sell online. And business is growing, thanks to a new expanding customer
base.
UNIDENTIFIED MALE: The number of non-Asian consumers that are shopping Asian specialty stores continues to grow.
[09:50:00]
STOUT (on camera): Why is it that more and more non-Asian customer are buying Asian products? And does this have something to do with the so
called Netflix effect?
ZHOU: Some of them are pop culture fit. Asian pop culture is love, you know, black peak, BTS; they love Squid Game on Netflix.
So they start interesting Asian pop culture, organically, they start looking for the product and the brands behind this culture.
STOUT (voice over): Back at Yangban Society, Asian and non-Asian diners gathered in its vibrant dining room. And they all share the same thing,
hunger for a new and authentic experience.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
(BEGIN VIDEOTAPE)
STOUT (voice over): Southeast Asia has been digitizing rapidly for a number of years. In 2019, around three and five of the population had regular
access to the internet. According to Google, Temasek and Bain up from one and five just over a decade before, but the pandemic brought record demand
for tech apps in the region. In 2020 more than 40 million people in Southeast Asia came online for the first time, the researchers say.
Much of this was prompted by COVID-19 lockdowns and increased reliance on digital finance, ecommerce and transport apps. Investment followed, tech
entrepreneurs in the region attracted a record $21.5 billion of private capital in 2021, up from 8.8 billion in 2020 according to Preqin.
STOUT (on camera): 500 Global is one U.S. based venture capital fund that is committed to the Southeast Asian market. And early investor in some of
the region's biggest names like Rob - Bukalapak, and now has its eye on younger players as well. I spoke with its Co-Founder and CEO, Christine
Tsai about emerging trends and headwinds to come.
CHRISTINE TSAI, CEO AND FOUNDING PARTNER, 500 GLOBAL: South Southeast Asia specifically when we first started investing was a very nascent market. But
now today in 2022, it's a completely different story.
STOUT (voice over): She's the mama bear who looks after the founders she invests in. Tsai is at the helm of a fund worth more than $2.8 trillion,
her company's mission to uplift people and economies around the world through entrepreneurship.
STOUT (on camera): You studied cognitive science at Berkeley; you worked at YouTube and Google. So what led you to starting and running your own
venture capital firm?
TSAI: Early on at Google, I didn't know what venture capital was. And that was kind of an opaque industry to me. But you know, by the time I left
Google, what was so exciting for me to then go and start my own venture firm was the fact that venture is real where you can really help founders
build the next generational companies or iconic technology.
[09:55:00]
STOUT (on camera): 500 Global has worked with over 2500 companies. How many of those companies are from Southeast Asia?
TSAI: So our southeast Asia portfolio is more than 300 companies at this point and growing, they are spread across Singapore, Malaysia, Indonesia,
Vietnam, Thailand, a couple in the Philippines and even some of the emerging markets like Cambodia.
So our portfolio overall in Southeast Asia is about seven unicorns, which is companies valued at a billion dollars or higher.
STOUT (on camera): What do you look out for to make and define that investment opportunity? Are there any particular concepts or personalities
that you look out for?
TSAI: Ultimately, the most important thing is the team. We have a lot of founders who've been successful, who have been more humble or more
coachable, they aren't the stereotypical loud personalities.
But we also do look at what is it that they're building this be a category leader in the region if it's a sort of, "copycat" of a model that's in
another part of the world say the U.S. what does this team have to make this model work in the region?
STOUT (on camera): Now, some Southeast Asian tech startups that have gone public recently, including 500 global portfolio companies like Bukalapak,
like Grab, have seen their share prices tumbled within months of IPO. There was that downward pressure on them. So what's happening here?
TSAI: If you think back to 2020, 2021, specifically, for venture, it was a really unprecedented year for funding, there was a lot of concern about
valuations getting out of control. And I think what you're seeing now is really, certainly a correction, at least specifically for venture.
STOUT (on camera): That about 1000 new unicorns this year, every day more than one unicorn is minted, it seems that it's not really a rare creature
anymore, is being a unicorn, something that entrepreneurs should still aim for?
TSAI: Absolutely not. If I made a founder that says my goal is to be unicorn, I do have question marks, because being a founder is such a
difficult journey. And what I like to see is that they're really excited and passionate about what they're building empathy for their target
customer, and they really just want to build something iconic and big, not necessarily have a price tag on it.
STOUT (on camera): So what are the areas of opportunity in Southeast Asia, especially given all the economic uncertainty out there?
TSAI: We have seen a lot of opportunity around a broader category that we call rural digitization. So this could be around FinTech and payments and
financial inclusion as well as commerce, consumer commerce, things that are in kind of more frontier tech or mobility. And those are areas that we've
been quite excited about.
STOUT (on camera): The region is not immune to the global economic slowdown, rising interest rates and inflation here in the United States and
in Europe, could spell further insecurity for business across Asia.
This is according to Preqin, but in the long run markets across Southeast Asia remain ones to watch. This is according to some experts because of
rapidly growing populations and emerging digital economies that could drive new opportunities in tech innovation. For more on these stories and others,
check out our website; just go to cnn.com/marketplaceasia. I'm Kristie Lu Stout in Los Angeles. Thank you for joining me, I'll see you next time.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
END
