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Amazon, Google, Microsoft, Oracle get $9 billion Pentagon cloud deals

December 7, 2022 Admin Leave a comment

The Pentagon building in Washington, D.C.

Staff | AFP | Getty Images

The Pentagon said Wednesday that Amazon, Google, Microsoft and Oracle each received a cloud-computing contract that can reach as high as $9 billion each through 2028.

The outcome of the Joint Warfighting Cloud Capability, or JWCC, effort is in line with the U.S. Defense Department’s effort to rely on multiple providers of remotely operated infrastructure technology, as opposed to relying on a single company, a strategy promoted during the Trump Administration.

An increasing tally of businesses have also sought to rely on more than one cloud provider. In some cases they rely on specialized capabilities on one and the majority of front-end and back-end workloads on another. At other times, they come down to cost. Having more than one cloud might make organizations more confident that they can withstand service disruptions brought on by outages.

Originally, the Pentagon had awarded the Joint Enterprise Defense Infrastructure, or JEDI, to Microsoft in 2019. A legal battle ensued as Amazon, the top player in the cloud infrastructure market, challenged the Pentagon’s decision. Oracle challenged the Pentagon’s pick as well.

In 2020, the Pentagon’s watchdog conducted a review and ruled that there was no evidence to conclude that the Trump Administration had intervened in the process of awarding the contract. Months later the Pentagon announced it would stick with Microsoft for the JEDI deal.

Last year the Pentagon changed its approach, asking for bids from Amazon, Google, Microsoft and Oracle to address cloud needs. But the General Services Administration stated at the time that only Amazon and Microsoft seemed to be able to meet the Pentagon’s requirements.

Wednesday’s result is a boon in particular for Oracle, which analysts don’t see in the top tier of companies offering cloud-based computing services. Oracle generated $900 million in cloud infrastructure revenue in the quarter that ended Aug. 31, a small fraction of the $20.5 billion total for Amazon’s cloud subsidiary, Amazon Web Services, in the third quarter.

All four of the technology companies have won indefinite delivery, indefinite quantity, or IDIQ, contracts, meaning that they can involve an indefinite amount of services for a specific period of time.

“The purpose of this contract is to provide the Department of Defense with enterprise-wide globally available cloud services across all security domains and classification levels, from the strategic level to the tactical edge,” the Defense Department said.

WATCH: Roughly 75% of our customers use multi-cloud and data centers, says VMware CEO

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Technology

Carl Pei’s Nothing plans to launch smartphone in US to take on iPhone

December 5, 2022 Admin Leave a comment

The Nothing Phone (1).

Nothing

U.K.-based consumer tech company Nothing is setting its sights on the U.S., with ambitions of taking on Apple’s iPhone.

The startup, the hardware venture of Carl Pei — co-founder of Chinese mobile phone maker OnePlus — is in early conversations with American carriers about launching a new smartphone in the U.S., Pei told CNBC, without naming any of the carriers.

related investing news

Goldman Sachs upgrades this global tech giant, saying the stock could rise up to 90%

In July, Nothing launched Phone (1), a mid-range device with a design, price and specs similar to Apple’s entry-level iPhone SE.

The company, which is backed by iPod creator Tony Fadell and Alphabet’s VC arm GV, has only launched its smartphone in Europe, the Middle East and Asia so far — not the U.S. or Canada.

“The reason why we didn’t launch in the U.S. is because you need a lot of additional technical support, to support all the carriers and their unique customizations that they need to make on top of Android,” Pei explained in an interview with CNBC. “We felt that we weren’t ready before.”

“Now we are in discussions with some carriers in the U.S. to potentially launch a future product there,” said the Chinese-Swedish entrepreneur.

The likes of Apple and Samsung already have established relationships with large U.S. carriers, making it harder for smaller firms to compete.

But a third of the sales of its recently launched Ear (stick) headphones currently come from the U.S., Pei added.

“It’s definitely a market where there’s already a lot of interest for our products. And if we launch our smartphones there, I’m sure we could obtain significant growth,” he said.

The company expects its revenues to jump more than tenfold in 2022 — from about $20 million in 2021 to an estimated $250 million this year, according to figures shared with CNBC exclusively. It has also more than doubled its employees to more than 400. However, the firm is still losing money.

“The goal is to be profitable in 2024,” Pei said. “We are not profitable right now. And this year was made even harder due to the foreign currency exchange. We pay a lot of our COGS [cost of goods sold] in USD but we make money in pounds, in euros, in Indian rupees — so everything devalued against the USD.”

The U.S. dollar has rallied this year; the dollar index — which measures the greenback against a basket of major currencies — is up over 8.5% year-to-date.

Taking on Apple

Pei wants to challenge Apple’s iPhone in the U.S. But it’s a steep hill to climb.

“There’s a challenge with Android where iOS is just becoming more and more dominant. They have very strong lock-in with iMessage, with AirDrop, especially among Gen Z. So that’s a rising concern for me,” he said.

“There might be a time where Apple is like 80% of the overall market and that just does not leave enough space for Android-based manufacturers to keep playing,” he said.

Apple was not immediately available for comment when contacted by CNBC.

Pei says he sympathized with Elon Musk, who as Twitter’s new CEO has put pressure on Apple over its App Store restrictions and 30% fee imposed on in-app purchases.

He added that, in a couple of years’ time, Nothing may have to “have a serious think about this problem and how we tackle it.”

“It’s going to create a ceiling to our growth,” Pei said.

David vs. Goliath

Pei said his firm has faced a plethora of challenges in bringing its products to market. One of the major setbacks it faced was when it approached Foxconn, Apple’s largest iPhone supplier, to manufacture its phones.

According to Pei, Foxconn refused to do business with Nothing, citing past failures in the smartphone industry.

“Every startup manufacturer has worked with Foxconn,” Pei said. “But when it was our turn, they said no because every startup that worked with them failed. And every time a startup failed, Foxconn lost money on it, they were not able to recoup their costs.”

Foxconn was not immediately available for comment when contacted by CNBC.

Covid restrictions around the globe also presented a significant hurdle for the company. In India, where Nothing produces its phones, the company was unable to fly out engineers due to travel restrictions, with Pei saying the company had to manage its factory on the ground remotely.

“We really had to hustle to create this,” he said of Nothing’s smartphone.

In Shenzhen, China, where officials have imposed strict lockdowns, Nothing’s engineers had to discuss component designs and mechanics during mandated 45-minute periods when it was acceptable for people to go outside to buy groceries.

Nothing has sold over 1 million products to date globally, with its Ear (1) earbuds selling 600,000 units and the Phone (1) reaching 500,000 shipments.

Still, the startup is a tiny player, and it faces a bleak economic outlook where people are being forced to limit their spending drastically.

In Europe, smartphone shipments sank 16% in the third quarter year-over-year, although they were up slightly from the previous quarter on the back of the iPhone 14’s strong launch.

Samsung is Europe’s largest smartphone maker with 35% market share, followed by China’s Xiaomi’s 23% and Apple’s 21%.

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Business

Cramer on hot industrial stocks, and how we’re playing the tech pivot

December 5, 2022 Admin Leave a comment

The market is so possessed by tech that it can’t see the forest through the industrials. If the discourse isn’t about the slowdown in the cloud, it’s about who is pulling out of the now-private Twitter, or how disappointing it is that co-CEO Bret Taylor left Salesforce (CRM). Meta Platforms ‘ (META) Mark Zuckerberg could sneeze and Amazon (AMZN) CEO) Andy Jassy cough and it’s a bigger deal than United Airlines ‘ (UAL) order for 100 Dreamliners from Boeing (BA). We don’t pay much attention to the industrials anymore. There aren’t that many of them. We are used to them being hostage to so many forces of negativity that they just aren’t worth our focus. That’s wrong. The Dow Jones Industrial Average has done so much better than the average semiconductor company, or even the above-average enterprise software company that it’s insane that we even focus on some of the latter. The 600 companies formed in the last two years rent too much of your brain space even in passing. Advertising, which turned out to be the Achilles heel of everything internet and media, just seems to have vanished. There’s not enough of it to feed the mouths of all of the players and nobody seems to be able to reach the 18- to 24-year-olds with whatever they spend. So they are shelling out a fraction of what they used to spend. It’s so bad that we cheer when a semiconductor company like Marvell Technology (MRVL), guides down and it only edges the stock down slightly. That gives the market hope that some of the inventory glut for chips is near its end. In the meantime, the unheralded industrials gap up on any S & P 500 run, where there never seems enough stock ahead to where you find sellers. I will go into the ones that intrigue — but first, let me just say that the biggest problem with so many of these techs is that there is so much supply at every level. Someone is always a seller. There’s always merchandise up a penny. And it is sizable. The orders, if you could hear them would be something like, “sell 50,000 shares every five cents thereabout for the next dollar and then I will reload when I get my report if there is enough time left at the end of the day. I don’t want to hurt the stock too much because I have so much behind it.” There is endless selling in anything related to the cloud and it isn’t just from the price target reductions. It is from insiders who sense that the era is over and they all compete with each other now, even Amazon, Alphabet (GOOGL) and Meta get that. When the biggest issue with Meta is how much time is Zuckerberg really working on his alleged metaverse pipedream, instead of the highly profitable but slow-growing Instagram, you know you are way too deep in the weeds. Now I want you to hit up the stock of Caterpillar (CAT). When you are in the deep stages of a Federal Reserve interest rate tightening I would normally say that this may be the single best short in the book. Shorting a stock means betting it will go down. But not this time. There is no way CAT can meet its orders. Every industry needs more of what they make, whether it be coal because Europe has taken so many nuclear plants offline and natural gas has risen so much in price, or earthmovers needed for all the roads that are about to be built in this country because of the Democrat’s infrastructure bill, which favors domestic product. Meanwhile, its raw costs are going LOWER. Caterpillar de-emphasized China and emphasized oil and gas. While the public companies have cut back the pace of drilling, the private equity companies are drilling like mad to cover cash flow. Take a look at how CAT acts on up days. There is none for sale. None. A decent day and it always seems like Caterpillar’s stock has rallied three points. Why not; there are 527 million shares outstanding, down 20 million shares. What enterprise software company can say that? There are no stock base compensation issues. Stock is precious. CAT sells at 17 times REAL earnings, not FAKE or MADE UP earnings. That’s what we really should call the shameless non-GAAP adjusted earnings-per-share nonsense we get from these West coasters, which seems a lot like what General Electric (GE) was doing before its collapse. I bet an order to buy 100,000 shares of Caterpillar moves it 2 points. In a year when the S & P 500 dropped 14%, CAT has gained 14% year to date. Not to mention it has an annual dividend yield of 2%. Last week, I met with Emerson Electric (EMR) CEO Lal Karsanbhai. He’s turning this old-line but excellent valve and home appliance maker into a company that digitizes your hardware, that automates your plants while cutting out waste. In less than two years, Karsanbhai has sold slow-growing divisions, bought faster-growing businesses, and joint-ventured others in ways that the arrogant software types can only dream of doing. Like Caterpillar’s stock, EMR is straight up: 4% higher year-to-date. But in the past three months, shares are up 18.5%. I think the idea of bringing in an Emerson to innovate, automate and become cleaner — it also has a huge business in environmental improvement — is one of the first calls I would make if I ran an industrial. It’s an 18 times earnings stock. Anything that happens to Boeing, I am always bittersweet about. We sold some high, we sold some low, but most importantly we were just annoyed by its constant errors. We wanted to play aerospace, though, with so much travel, so we did it with Honeywell (HON). Here’s another story that just never stops ceases to amaze. Another reconfigured company with chemicals that clean the refining process, machines that automate factories, climate controls, and some of the most important parts of an airplane including the cockpit, for not just Boeing but Airbus. Honeywell stock sells at 25 times earnings but its growth is accelerating and it has cash and a balance sheet that is ready to be put to work for anything needed. HON is another one that’s up 5% year to date and more than 17% in the past three months. We know that we have gone through arsenals of low-tech military equipment as has NATO. But this big appropriation boost last week is going to give Raytheon Technologies (RTX) orders it needs to raise numbers for 2023. The anti-missile products that Raytheon specializes in are what I think are now headed to NATO members to do what they want with them, which means take them to Ukraine to defend against the now-nine-month invasion by Russia. Meanwhile, Raytheon’s aerospace, both military and commercial, have too many orders to handle. After some re-configuring as part of the merger between United Technologies and Raytheon, the buyback is in place. The only thing holding this company back is a lack of engineers. Can the people out West learn military engineering? They better learn to do so. RTX is up 17% year to date. I could include so many companies like these, Eaton Corporation (ETN) for pumps, valves and what you need for electrical vehicle charging; Illinois Tool Works (ITW) for equipment like welding, the growth portion of autos, and polymers, and all sorts of in high demand products; or Agilent Technologies (A), a test and measurement company for all sorts of industries that require precision and pinpoint accuracy. You can’t just own these. You won’t know when they stop going straight up. And you can’t just buy them. Jeff Marks, portfolio director for the Investing Club, and I went at it last week when I said that we have to, just have to own Emerson as fast as we can. But one look at the stock tells us that it’s just gone too far too fast. The thing is, they all have. I say let’s take a serious break from the software companies that were claimed to have eaten everything else for breakfast and start discussing the real winners since the November pivot — the companies that were supposed to collapse that, instead, have reinvented themselves and are part of the new industrial economy that’s been automated and digitized and doesn’t need customer relations management because it has too many customers. (Jim Cramer’s Charitable Trust is long CRM, META, AMZN, GOOGL and HON. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Jim Cramer at the NYSE, June 30, 2022.

Virginia Sherwood | CNBC

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Business

Popular tax prep software sent financial information to Meta: report

November 22, 2022 Admin Leave a comment

Meta (formerly Facebook) corporate headquarters is seen in Menlo Park, California on November 9, 2022.

Josh Edelson | AFP | Getty Images

Popular tax prep software including TaxAct, TaxSlayer and H&R Block sent sensitive financial information to Facebook parent company Meta through its widespread code, known as a pixel, that helps developers track user activity on their sites, an investigation by The Markup found.

In a report published with The Verge on Tuesday, the outlet found the software sent information like names, email addresses, income information and refund amounts to Meta. The Markup discovered the data trail through a project earlier this year with Mozilla Rally called “Pixel Hunt,” where participants installed a browser extension that sent the group a copy of data shared with Meta through its pixel.

“Advertisers should not send sensitive information about people through our Business Tools,” a Meta spokesperson told CNBC in a statement. “Doing so is against our policies and we educate advertisers on properly setting up Business tools to prevent this from occurring. Our system is designed to filter out potentially sensitive data it is able to detect.”

Meta considers potentially sensitive information to include information about income, loan amounts and debt status.

The Markup also found that TaxAct had transmitted similar financial information to Google via its analytics tool, though that data did not include names.

“Any data in Google Analytics is obfuscated, meaning it is not tied back to an individual and our policies prohibit customers from sending us data that could be used to identify a user,” a Google spokesperson told CNBC. “Additionally, Google has strict policies against advertising to people based on sensitive information.”

Representatives for the tax prep services did not immediately respond to CNBC’s request for comment.

Read the full report on The Verge.

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WATCH: Facebook battles Apple over user privacy features in iOS update

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Technology

Google Maps update shows fast-charging EV stations, new AR views

November 17, 2022 Admin Leave a comment

A charging port is seen on a Mercedes Benz EQC 400 4Matic electric vehicle at the Canadian International AutoShow in Toronto, Ontario, Canada, February 13, 2019.

Mark Blinch | Reuters

An updated version of Google Maps for Android and iPhone is rolling out with several new features, such as the option to search for electric vehicle stations with fast chargers and an augmented reality feature that overlays more information about local points of interest on top of the real world around you.

Here’s what’s new.

Find fast chargers for your electric car

If you drive an EV, you’ll be able to filter charging stations to find the most time-efficient option. So, if you search for a “charging station” in Google Maps, for example, a new option appears that allows you to filter out to show only “fast charge” stations that are compatible with the plug your car uses. It builds on an earlier update that allows users to search for stations by plug compatibility.

Find stations with fast chargers (left) and plugs compatible with your EV (right).

Google

Fast charging includes stations with chargers 50kW or higher. The update is available in countries where EV charging stations are available, according to Google.

New AR feature coming to Google Maps

Search with Live View starts rolling out in 6 cities next week.

Google

Google Maps is also getting an update to its augmented reality tool. Starting next week, a feature called “Search with Live View” will let you use your phone camera to find out what’s around you.

When you hold up your phone, for example, and tap the camera icon in Maps, you’ll see nearby landmarks, parks, hotels, restaurants, bars, banks and ATMs. You’ll also see info such as how busy the location is, whether it’s open, what the price range is and how it’s rated by Google Maps users.

The feature will first launch in six major cities: New York, London, Los Angeles, San Francisco, Tokyo and Paris.

Google adds wheelchair accessibility info to global maps

The ability to see wheelchair accessibility places is now available globally on Android and iOS.

Google

Google has expanded its Accessible Places feature, which shows an icon on a business profile to indicate that it’s wheelchair accessible, to all global markets. The option has been available in the U.S., Australia, the U.K. and Japan since 2020. Google highlighted that the feature can be useful for people who are walking with a stroller or a cart, too, since they may want to know if a ramp is available before visiting a specific location. The accessibility indicator is powered by business owners and people who use Google Maps.

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Business

Four-day workweek is new standard for 40% of companies, EY study finds

November 16, 2022 Admin Leave a comment

A man walks on Wall St. during the morning commute, as the city deals with record temperatures and the excessive heat, in New York, July 20, 2022.

Brendan McDermid | Reuters

A cooling economy, rising mortgage rates and mass layoffs have done little to dampen executive demand for expanded office presence and increased flexibility for office workers, a new report from Ernst and Young (EY) finds.

The consulting firm released its second annual EY Future Workplace Index on Wednesday, which showed a growing appetite for hybrid work, and an increase in both the utilization of flexible working options and the presence of a four-day workweek.

40% of companies surveyed either have implemented or have begun to implement a four-day workweek, EY said in a press release, an approach that has gained popularity abroad but has seen little adoption in the U.S. until recently.

Hybrid work showed a marked uptick from 2021, the survey showed, with 70% of employers surveyed adopting a hybrid approach which has employees working from home two to three days a week.

The four-day workweek and the growth of a hybrid workforce are both parts of what EY claims is a shifting landscape in real estate management for corporate leaders. “The economic downturn will force leaders to make important decisions regarding their real estate portfolios — from investments, to space optimization, to workforce models,” EY partner Mark Grinis said in a press release.

According to the press release, executives continue to invest in improving employee quality of life. 46% of surveyed employers plan to introduce in-office baristas. A third of surveyed executives plan to implement or extend their childcare options for employees. These changes come after the Covid-19 pandemic bruised employees and drove an uptick in resignations across sectors. The EY survey found that surveyed companies have begun to invest in in-office amenities to boost return-to-office rates and employee retention.

The EY report comes amidst mass layoffs in all industries, but especially in tech, where skilled employees enjoyed expansive perks and office amenities. Meta, Amazon, and Twitter have all announced reducing headcount by the thousands. At Google parent company Alphabet, even with a hiring slowdown in place, an activist investor is demanding CEO Sundar Pichai cut the search giant’s headcount and employee expenses.

According to the EY survey, however, only a third of surveyed executives plan to reduce investment in commercial real estate. Over half of those surveyed plan to improve or expand their existing portfolios.

Elon Musk, on the other hand, shows no sign of following the executives EY surveyed. Decrying Twitter’s catering expense — which he claimed was $13 million annually in San Francisco alone — the new Twitter chief has yanked free lunches and told employees that they must return to the office.

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Business

Cramer warns growth stocks could see ‘more horror’ after CPI release

November 9, 2022 Admin Leave a comment

CNBC’s Jim Cramer on Wednesday warned that growth stocks could take another beating if the October consumer price index reading shows that inflation is still running rampant.

“If we get a steaming hot CPI reading, you’re going to see more horror on your screen, so that’s why people sold ahead of it,” he said.

The CPI measures the prices for a basket of goods and services. Investors will parse through the October report, set for release Thursday morning, for any signs that inflation has cooled with the view that the Federal Reserve could then ease its brisk pace of interest rate hikes.

Stocks fell on Wednesday, weighed down by a crypto sell-off and uncertainty about which political party will gain control of Congress following the midterm elections. The market’s decline comes after three consecutive days of gains.

Cramer echoed his advice to investors in recent weeks to stay away from semiconductor and tech stocks, including names like Meta, Amazon, Apple, Netflix and Alphabet.

“When rates go up, you immediately get this kneejerk sell-off in virtually everything, but especially in tech,” he said, adding: “Some of these companies are doing much better than others, yet they all trade the same.”

Disclaimer: Cramer’s Charitable Trust owns shares of Meta, Amazon, Apple and Alphabet.

Jim Cramer’s Guide to Investing

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Business

Market veteran reveals how he is positioning for upcoming bull market

November 8, 2022 Admin Leave a comment

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Business

The tech tyranny is over. Here are the stocks driving this market

October 31, 2022 Admin Leave a comment

Never have the bulls been more bashful and timid. Never have the bears been so ascendant and so wrong. Oh sure, the bears nailed Meta Platforms (META) and hit Microsoft (MSFT) out of the park. Amazon (AMZN) flopped. So did Alphabet (GOOGL). But when the bears — with the help of everyone in the media I know — tried to take down Apple (AAPL), they failed. Apple had an amazing quarter, but you had to actually understand something about Apple beyond the direction of the chart to get it right — and buy it hand over fist when the journalists took it down. Or let me put it another way: One month ago, when we went into October like slaughtered lambs, my friend Larry Williams, our greatest market historian today, said the bear was toast. He predicted one of the greatest rallies that we would ever see, led by the Dow Jones Industrial Average. And he was just dead right. Shockingly right. Now he saw historical parallels. I tried to incorporate as much as if his thinking as I could, but what I missed was clinging to some classic stocks that had made me so much money over the years, even decades. With the exception of Apple, they had to go. They still do, I fear, unless China changes, and China has become a horror show of a totalitarian nightmare. What did I miss? Simple: affection. The unwillingness to depart with companies that simply are the best we have. But that proved to be my biggest conundrum. The one thing I was certain about, for example, is that Nvidia (NVDA) has the most powerful chips in the world. The one thing I didn’t see coming is that President Joe Biden would know that and ban them from China. I was sure that when I spoke offline with consumer packaged goods companies about who they were advertising with the answer was easy: Amazon and Google. But that ended up being only one small piece of the puzzle. And costs. I got these wrong. Amazon’s and Google’s costs are too high, but I get the sense that’s over. You sell them now, you don’t realize that these companies are angry at themselves; they couldn’t go full stop in hiring, which is what they have to do . Apple: It should have been a terrible quarter. China’s a nightmare. The iPhone 14 is not supposed to be special. Service revenues were going to be weak. Here’s what was missing though: Those things were all true and it didn’t matter. They are the masters of 900 million subscribers and about a billion and a half happy customers who buy everything else that goes with the Macs or the iPhones, the two greatest Trojan Horses on earth. They are remarkable. When will people realize the greatness of the Apple management team? Sure, there is better technology, but it is enterprise tech. We want batteries that last longer. They have them. We want watches that stay away two days without charging. Done. We want amazing programming. Sure, coming right up. We want privacy because we think that everyone is taking us for granted and selling us out to advertisers. Okay, Apple will stop that, too. Here’s what Apple is: The good guys. Now let’s go over what else happened. A couple of trillion dollars came out of a handful of stocks and not all of it went into the 2-Year Treasurys. Some of that cash went into companies that don’t part with stock like it is tap water. They went to companies that know what to do when a recession is coming and they batten down the hatches before the storm, not after. The money went to the stocks of companies who buy their shares in the open market the way Silicon Valley issues it. These companies take pride in paying great dividends even if it means they don’t grow as fast as they could. Talk about getting the zeitgeist. Oil, the commodity, has been butchered within an inch of its life. But the oil stocks? They have been fabulous. And they will get even better to the point that they will have enough money to send to SLB and Halliburton (HAL) to bring out more oil and sell it for twice what it costs. Now let’s just get away from the scrum entirely. This market’s made of health care and financials. Old-time health care like Merck (MRK) and Eli Lilly (LLY). How did these get so high? One part great new drugs and one part the coming deflation that you get when you have a slowdown. Notice I wrote slowdown, not nightmarish recession or depression. Just a bad slowdown where drugs thrive. Banks? They work here for a simple reason: They can make so much money that they can buy back stock and raise dividends as never before. The industrials? They are doing so well because they are so cheap versus their historical prices. Retail? Sure, promotional.That’s why you buy TJX Companies (TJX) and Costco (COST). And if you want real winners, anything infrastructure-related, because the Democrats gave us so much money that the federal government will be the buyer of pretty much everything that ‘s made by our industrials. I wish we owned Caterpillar (CAT) and Deere (DE). Both could feast from the trough for ages. Finally, there’s aerospace. We are going to be traveling like never before after this Covid war. And we can’t get enough of these stocks. For years, we have been under tech tyranny. That tyranny is all over. That’s given everyone else freedom. They are taking it. We need to take it, too. There will always be some good techs. This isn’t 2000 when only Amazon was left standing. But we are at a manufactured moment, where the Federal Reserve is going to get its layoffs, the war in Ukraine isn’t going to last forever, and the Chinese will figure out a way to save face and end their Covid lockdowns. Do we live happily ever after? No, but the bulls aren’t going to be bashful for much longer. And the bears? They have had a magnificent run haven’t they? (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

A worker washes a Caterpillar crawler dozer at Ideal Tractor in West Sacramento, California, on Monday, Aug. 1, 2022.

David Paul Morris | Bloomberg | Getty Images

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Business

Millennial’s beauty startup Social Bella raised over $225 million

October 31, 2022 Admin Leave a comment

When the Covid pandemic was raging in 2020, much of the world was in lockdown and more turned to online shopping.

But Chrisanti Indiana did the unexpected: she expanded her e-commerce business — offline.

Her beauty and personal care e-commerce startup, Sociolla, had just two brick-and-mortar stores in Indonesia in 2019. By the end of 2021, that number grew “10 times” more, she said.

“A lot of people actually told us that it’s a very bold move to actually open an offline presence, while everybody was closing their offline stores [during the pandemic],” she added.

But that was a “well-calculated” move for Social Bella, which operates Sociolla.

We know that this is the time for us to actually prepare … to make sure that after the pandemic, we can serve more and more consumers.

Chrisanti Indiana

Co-founder and CMO, Sociolla

“We know that this is the time for us to actually prepare … to make sure that after the pandemic, we can serve more and more consumers,” she added.

Looking far ahead turned out to be the right move for the 31-year-old. Her online and offline approach transformed her e-commerce startup into a multimillion-dollar beauty conglomerate.

Since 2018, it has raised around $225 million, and drawn an impressive list of investors that include East Ventures, Jungle Ventures, Temasek and Pavilion Capital.

Indiana, the co-founder and chief marketing officer of Social Bella, tells CNBC Make It how she took her Jakarta-based startup to the next level.

Tackling counterfeits

The idea for Sociolla came about in 2015, when Indiana returned home to Jakarta, after studying in Australia.

The makeup junkie realized that in Australia, she had easy access to a wide range of beauty products from international brands. That was a stark contrast to Indonesia.

“There was lot of options for me, but then I came back and there’s basically none,” said Indiana.

“There wasn’t a platform that had it all — I had to find specific sellers on social media, ask friends who can help purchase the product for you [when they are] overseas.”

What made matters worse for her was the online proliferation of counterfeit makeup products that were sometimes selling at “a fraction” of the original’s price.

I still remember vividly in my mind that there’s a lot of like sellers online, especially on social media, that claim their products are 99% authentic. What does that mean, 99% authentic?

Chrisanti Indiana

Co-founder and CMO, Sociolla

“I still remember vividly in my mind that there’s a lot of like sellers online, especially on social media, that claim their products are 99% authentic. What does that mean, 99% authentic?”

Indeed, locally made counterfeits in Indonesia are rife, thanks to cheap labor costs and materials. According to a local report, Indonesian authorities seized illegal cosmetic products worth $9 million in 2018 — twice the previous year’s amount.

Seeing friends buying these products left Indiana perplexed.

“It’s skincare, it’s makeup. It’s something that you put on your skin. It’s just bizarre for me,” she said.

Sociolla has expanded into brick-and-mortar shops. It now has 47 stores in Indonesia and 16 in Vietnam.

Social Bella

Determined to build a space where consumers can get products that are safe and authentic, Indiana teamed up with her brother and friend to launch Social Bella, with a starting capital of $13,000.

“Since we started, we ensure that we only work with authorized distributors or brand owners,” Indiana said.

Building an ‘ecosystem’

Sociolla may have started off as an e-commerce platform, but the trio had bigger dreams.

Social Bella has since gone beyond offline shops — it’s also a distributor for beauty and personal care manufacturers worldwide.

“We become an associate partner for a lot of global brands in Indonesia. We help them not only to distribute their products to Indonesia, but we also help them understand the market,” said Indiana.

On top of that, the business also operates Soco, which Social Bella says is Indonesia’s largest online review service for beauty products. Soco has amassed more than 2.5 million reviews for around 36,000 products, the company added.

Social Bella was founded in 2015 by Chrisanti Indiana, her brother and president Christopher Madiam (left) and CEO John Rasjid (right).

Social Bella

The “beauty journey” for customers goes beyond putting something in their shopping carts and checking out, said Indiana.

“We realized that there’s a lot of touch points that are really important … finding the right products for yourself is not just about going to the store and picking it up. You will make sure that you read the reviews, talk to your friends, or Google first,” she added.

“Soco makes sure that they can access tons of product reviews before they purchase products.”

On top of that, Social Bella also runs Beauty Journal — a lifestyle website, and Lilla, an online retailer for mothers and babies.

That’s all part of building the business “ecosystem,” as Indiana calls it.

We want to make sure that we are scaling up and reaching more and more consumers. If Social Bella becomes a unicorn, it’s a bonus.

“We want to … to serve more and more women, not only in beauty and personal care, but also in other industries.”

The startup appears to be on the right track — it now boasts more than 30 million users across all its business units, said Social Bella, selling an inventory of 12,000 products from 400 brands worldwide.

Indonesia’s next unicorn?

Over the last two years, Social Bella expanded aggressively, growing from just three Sociolla stores in Indonesia in 2020, to 47 stores there and 16 stores in Vietnam today.

While much of the expansion took place during the pandemic, Indiana said that had always been part of the plan for the e-commerce platform, lockdowns or not.

“It’s actually to create a seamless omnichannel experience … because we believe that we are serving the same customer whether she shops offline or online,” the Forbes’ 30 Under 30 Asia honoree said.

“They can choose to do click-and-collect or … she can also deliver the purchases to her home. It’s making sure that she can shop the way she likes.”

Social Bella aims to serve more female customers.

Social Bella

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