fortune--2020-06-14--Can Nikola Motor’s big battery promises be true?

Electric-truck maker Nikola Motor has endured a rollicking stock market entry this month after listing through an unusual reverse merger. The frenzy has been fueled in part by the company’s claims that it will reveal a new kind of battery by the end of this year.
But despite the looming deadline, Nikola appears to still be in the early stages of developing its battery. And even if Nikola succeeds in creating a working version, it could be as much as a decade before manufacturing begins.
Because of the uncertainty, experts are cautious about the company’s claims. Many similar efforts to commercialize new battery technology over the years have yet to bear fruit.
Nikola founder and chairman Trevor Milton promises that his company will be able to produce batteries at a cost of around $70 per kilowatt-hour of storage capacity. That would be a massive improvement over more established vehicle makers such as Tesla and Volkswagen, which are still chasing the goal of producing batteries for $100 per kilowatt-hour.
Price per kilowatt-hour of energy storage is a key factor in the final cost of electric vehicles, and their competitiveness with internal combustion vehicles. Estimates of the battery cost that would make electric passenger cars cheaper to buy and operate than gas-burners range from $100 per kilowatt-hour down to $85 per kilowatt-hour.
Battery development represents a significant expansion of scope for Nikola. The company’s planned flagship product is the Nikola One, a long-haul semi that uses liquid hydrogen, a fuel that doesn’t create carbon emissions and can be produced using renewable energy. Nikola plans to lease the trucks and control much of the hydrogen supply chain, including building its own fueling stations.
The company has yet to sell a single vehicle of any type, but its plans have been enough to attract nearly $1.3 billion in venture funding from sources including European truckmaker CNH Industrial and German manufacturer Bosch.
The pitch has proved even more alluring to public investors. Nikola’s shares rose 136% between the June 4 reverse merger—a maneuver that avoids the lengthy initial public offering process— and June 9, when the company’s market value briefly rose to $30 billion, higher than Ford’s. By late on June 12, the stock was down 21.7% from its peak.
“It is some bold claims that they’ve made,” says Gene Munster of Loup Ventures, an investor focused on electric vehicles. “Now the clock starts ticking, because they have to deliver.”
Building a better battery isn’t easy
Nikola isn’t yet revealing much about how it plans to leapfrog competitors in battery technology. But Milton says the aim is to reveal the battery before the end of this year at an as-yet unscheduled event called Nikola World.
Milton did share a few hints with Fortune.
The technology wasn’t developed by Nikola. Instead, Milton says, “we found some professors who had been working on it for quite some time,” but declined to identify them. He did reveal that the planned battery “has lithium, but it is not a lithium-ion [battery],” and that the design’s aim is to “get rid of the cobalts, nickels, and magnesiums” — the metals that account for much of the cost of existing battery technology.
Based on those details, Matthew McDowell, a battery materials researcher at Georgia Tech, speculates that Nikola may be working on what’s known as a lithium-metal battery. Broadly, the idea is to replace the graphite mesh that stores lithium in today’s lithium-ion batteries with more lithium, increasing energy density by 30% to 40%. That idea is already being aggressively pursued by a large number of companies and researchers, McDowell says.
In contrast, James Frith, an analyst with the research firm Bloomberg New Energy Finance, believes Nikola may be developing lithium-sulfur battery technology. Chris Robinson, an analyst with Lux Research, and Mihri Ozkan, an engineering professor and battery researcher at the University of California at Riverside, also agree that lithium-sulfur is the likely goal, based on the company’s claims.
Lithium-sulfur batteries are lightweight but bulky—a possibly good fit for the large trucks that are the centerpiece of Nikola’s planned product line. The technology was patented in the early 1960s, and broad efforts to commercialize lithium-sulfur batteries have been underway for more than a decade, including by startups like Oxis Energy. Those commercialization efforts have yet to succeed, according to Ozkan, because of challenges including the safety and life span of lithium-sulfur batteries.
It’s unlikely that Nikola is keeping wraps on any radical, previously unknown innovation in battery technology, according to experts in the field.
“Progress in the battery industry doesn’t come from single large breakthroughs, but rather continuous improvements,” says Robinson. “The odds an entirely new chemistry—especially one as close to commercialization as Nikola suggests—would slip past a multibillion-dollar industry are slim to none.”
Whatever the approach, Nikola is likely years from producing a new kind of battery at scale. Despite its very specific cost projections and plans to debut the technology within six months, Nikola is still in the laboratory-testing phase of development.
“In the lab we get a few thousand [charging] cycles, which is much better than lithium-ion,” Milton says, referring to a key measure of a battery’s longevity. “But the real world is much different from the lab…Now you’ve got to make them a lot bigger, [and] you’ve got to abuse them” under varied temperatures, weather, and use conditions.
Experts agree that there is a big difference between the lab and the road. In fact, optimistic promises about battery innovation based on laboratory results are common—but many of those proposed technologies have yet to be commercialized.
“It’s a really complicated process,” says McDowell. “When you’re developing a battery technology, there’s 15 or 20 different metrics you need to hit to have a reliable product. And they’re all intertwined.”
Those metrics include not only performance under varied temperature and weather conditions, but also a battery’s life span, energy density, and the rate at which it loses its charge when not in use.
Frith, of Bloomberg New Energy Finance, estimates that transitioning a new kind of battery from the lab to commercial use takes 10 years, or as little as five once working prototypes are complete. Investors won’t have to wait quite that long to know whether Nikola can eventually fulfill its battery promises, though.
“We’ll know in 6 to 12 months whether [Nikola’s claims] are true or not,” says Munster. In that time frame, he says, the company will need to show it can build a working vehicle using its battery, even if it hasn’t yet reached commercial-scale production.
“It’s not going from the lab to 1% market share. It’s going from the lab to the road where people can literally kick the tires,” says Munster. “And they have to have some evidence that they built it at the right price. That’s the hurdle they need to hit.”


fortune--2020-06-14--Rare ‘pinball machine’ painting by Wayne Thiebaud may fetch $25 million at Christie’s auction next m

Rare ‘pinball machine’ painting by Wayne Thiebaud may fetch $25 million at Christie’s auction next month

Why every company needs to ‘ reimagine ’ their workplace , according to PwC ’ s U.S. CEO

A row of vintage pinball machines painted by California artist Wayne Thiebaud, who’s turning 100 in November, may fetch as much as $25 million at Christie’s next month.
The 1962 canvas—“Four Pinball Machines”—will be among the top lots of a relay-style auction on July 10. Even if the work sells at the low estimate of $18 million, that would be more than double Thiebaud’s auction record.
Thiebaud is known for his sumptuous depictions of cakes, ice cream cones, lollipops and other ordinary objects, which he turned into iconic Pop art images. “Four Pinball Machines”—curiously titled as it appears to depict five of them—hasn’t been seen in public since the artist’s retrospective at the Whitney Museum of American Art two decades ago.
California artist Wayne Thiebaud’s “Four Pinball Machines” may fetch as much as $25 million at Christie’s next month. COURTESY OF CHRISTIE’S IMAGES LTD. 2020
It last appeared at auction in 1981, selling for $143,000 to Donald Bren, the billionaire chairman of Irvine Co., one of California’s largest private landowners, according to the provenance provided by Christie’s. In 1982 Bren sold the work to San Francisco investment manager Ken Siebel and his wife Judy.
“It’s certainly one of the very best investments,” said Siebel, the father-in-law of California Governor Gavin Newsom. The couple always had the painting prominently displayed in a living room or a dining room. “We saw it every day. We enjoyed it so much.”
He cited estate planning as a reason for the decision to sell.
In November, Thiebaud’s 2011 work “Encased Cakes” fetched $8.5 million, the artist’s auction record, at Sotheby’s.
The Siebels attended the 1981 auction at Christie’s with Thiebaud’s dealer, Allan Stone. But they refrained from bidding after Bren told them how much he wanted the work.
“After he bought it I told him, ‘if you ever decide to sell it, please let me know,”’ Siebel said. “Donald had a great art collection. I think he was buying a lot of things at that time.”
A year later, Siebel got a call from Stone, telling him that Bren was ready to sell.
“Maybe he found something else that he liked better,” he said. “We were certainly the beneficiaries of his decision.”
With assistance from Devon Pendleton.


fortune--2020-06-14--Why every company needs to ‘reimagine’ their workplace, according to PwC’s U.S. CEO

A Q & A with the U.K. father and son duo focusing on children during the coronavirus pandemic

Tim Ryan, who runs the U.S. arm of global consulting and accounting powerhouse PwC, has a full house: He’s been quarantined at his home in Boston with his family, which includes six children and a dog, for nearly three months now. That’s a huge turnaround from the typical corporate grind. “For the last 25 years I’ve spent every week traveling between three to six different cities around the world,” he says.
He’s also been swept up in the calls for change in corporate America in response to the outpouring of support at Black Lives Matter protests across the country. As he wrote to the PwC community, “I cofounded the CEO Action for Diversity and Inclusion in response to the killing of unarmed Black men in the summer of 2016. Two years later, in 2018, we lost a member of our PwC community, Botham Jean, to this same kind of violence, and I witnessed the pain his family had to—and still has to—endure over the loss of their son and brother.” Ryan wrote that among other actions, PwC will be giving employees a paid week off to volunteer for nonprofits, releasing diversity stats, creating a staff-led group to advise management on advancing progress, and donating more than $1 million to charities including the NAACP, ACLU, and the Center for Policing Equity.
PwC CEO Tim Ryan Courtesy of PwC
As he wrote in his letter to employees, “Over the past week, I have heard from thousands of people, from PwC and elsewhere, and have come to a greater understanding of the hurt, anger, and exhaustion that the constant threat of violence and oppression takes on the Black community. And while I acknowledge that it is not the job of our Black colleagues to teach the rest of us what to do, I am grateful for how many of them have stepped forward to not only share their pain, but also their ideas, with me.”
Beyond its own walls, the fact that PwC works with more than 200 major companies around the globe has given Ryan a unique view of how the nature of work is evolving in a period of unprecedented change. Fortune spoke to Ryan about innovating during a crisis, how to make offices safe, and the cost of bringing people back to the office.
This interview has been edited and condensed for clarity.
When will PwC bring employees back to the office?
When will we reopen? We want to make sure our working parents are supported, so at the very earliest, some of our offices in areas that meet our criteria for safety may open after schools reopen. It’s a whole ecosystem of making sure supports are in place so employees can come back. But not everyone will. We’re working with many clients on reimagining their work, not just ‘come back to work’ plans, but also looking at what functions can be done remotely on a permanent basis.
Talk a little bit about the cost of bringing people back to the office.
The cost of bringing people back has gone up, and that’s forcing people to reimagine work. We’ve heard estimates of $200 per head/per month to safely bring people back to the office. That’s deep cleaning, sanitizing, temperature checks, masks. If you aren’t reimagining your workplace, your margins just went to hell in a handbasket. If companies aren’t doing things to offset those costs and lost productivity [due to factors like social distancing requirements] you’re not competitive.
We are keenly aware of the challenges employees are having right now. The country is split. Some people think it’s best to keep working from home; some people think, “I can’t wait to get back.” You can’t just look at the aggregate. Everyone has different challenges, whether that’s childcare, caring for parents, their own health, worries about economic uncertainty. We can’t minimize those challenges.
PwC has developed its own contact tracing app. How does that work?
We went live this spring. The app is called Automatic Contact Tracing. Two years ago in Chicago there was a law passed around keeping hotel employees safe, and we developed a geo-tracker with a panic button. If someone needed help they’d hit a button on their phone, and right away security would know there was a problem in, say, room 202. So we have adapted that technology to help employers track who their employees may have come into contact with. Right now, if someone gets COVID, you have to shut the whole place down. Tracking allows you to notify who that person was near. I might have been in close contact with 10 people, so now instead of shutting the whole office down, just those 10 people need to quarantine. We’re in no rush to come back to the office at PwC, but when we do, the app will be a prerequisite for employees.
Which companies are going to come out of this period stronger?
Larger companies that are well capitalized going in very much have the opportunity to come out on top. You’ll see a clear segmentation when we come out of this. One CEO we work with told me recently that since March they have built out a digital strategy that before the crisis they thought would take two years. Areas where we see significant opportunity are IT, digital, security, and collaboration software. In health care, we think 50% of health will move toward telehealth. Across industries, companies are really investing in their digital salesforce, especially in places like pharma. And automation of the back office will continue—you clearly don’t need as many people to get the work done.
How has college recruiting changed this year?
At the end of March, we came out and said we would honor all 3,600 of our internships. We learned a lot in the financial crisis. Economic uncertainty is such a big fear. We’ve said publicly that layoffs would be a last resort. We have slowed hiring down, but we still did our campus recruiting this year. It just transitioned to virtual interviews. It’s going okay, but it’s too soon to tell how it really has differed from traditional face-to-face interviewing. And last week we announced that we would be extending full-time associate offers to all of our eligible graduating summer interns for employment in 2021.
What are some of the big concerns you are hearing from leaders right now?
Culture is a huge one. One of our CEOs said the other day, “We’re living off of our culture now. We’re drawing down on it. But if we’re in this period for a long time, we’re going to lose it.” If you don’t spend the time talking about your values, they will go away. In the past, many corporate values were created with physical things. But now they are having to transition this to virtual. How do they share, how do they innovate, how do they show they care?
But additionally, we’ve never been in a period where there is such low confidence around demand. Nobody knows what revenue is going to be. It’s anybody’s guess. There is a sense that work will never be done the way it was 12 weeks ago, but there’s also no way it will be like it is today. What’s going to happen is that every company at some level will reimagine how they work, how they sell, and how they interact.


fortune--2020-06-15--For BP, a path to zero emissions is taking shape. It’s going to cost them

The companies that have proved their value in this crisis

How much does it cost for an oil company to transform from fossil fuels to clean energy? Start in the tens of billions, and keep going.
BP, the British energy giant, began to set out initial cost estimates on Monday, including the write-down of assets and the decision to not exploit some existing resources, as the company grapples with both the immediate hit of the coronavirus pandemic and its long-term commitment to reach “net zero” emissions by 2050—a goal of pushing emissions as low as possible and offsetting the rest.
The first round of write-downs and impairment charges are expected to equal between $13 billion and $17.5 billion, to be finalized when the company announces its second-quarter results in early August, BP said in a release. It also said it was revising its forecasts for the long-term price value of its products and undergoing a review of its exploration assets—in other words, whether it will drill for oil in its unexploited sites. That announcement comes on the heels of CEO Bernard Looney’s announcement earlier this month that the company will lay off nearly 10,000 employees by the end of the year, in order to preserve cash and as part of its transition to becoming a “low carbon” company.
On Monday at noon in London, BP shares were down 3.5%; it opened down 5%. The Brent crude price was down 2.28% at $38.15, as fears of a second wave of COVID-19 pandemics spooked investors.
The announcement marks the first set of concrete details on how the company plans to meet its “net zero” target, announced in mid-February, nearly immediately after Looney took over as CEO. The specifics of the plan were sparse at the time, and Looney committed to providing more details by September on exactly how one of the world’s largest oil and gas companies would completely transform its business.
Since then, the global COVID-19 pandemic has overturned even the sector’s status quo economics. Demand plunged as much of the world went into lockdown by April, eviscerating the need for transport fuels, in particular. The plunge briefly caused oil prices to hit negative territory and spurred a wave of cost cutting from Texas oilfields to Saudi Arabia. Even with energy demand recovering as economies have reopened, the International Energy Agency predicts that this year will mark a record drop in global oil demand.
That has only “reaffirmed” the company’s emerging strategy on how to hit net zero, Looney said in a release, after noting in an earlier announcement that the drop in oil prices had resulted in the company losing “millions of dollars, every day.”
The initial cost estimates could also be a sign of what’s to come for a slate of other European energy giants that have committed to hitting net zero targets in recent months. Those include Spain’s Repsol, France’s Total, and Royal Dutch Shell, the world’s largest publicly traded energy company, which committed to the goal in April.
It also underlines a growing rift between the strategies of the largest European companies and their American rivals, where no such commitments have been made on the same ambitious scale. Exxon Mobil, the largest publicly traded U.S. company, has said it is committed to meeting the Paris Agreement to limit rising temperatures this century, but has given few specifics on how it will do so. Instead, CEO Darren Woods has largely kept to a long-term forecast that the middle class will grow in emerging economies, increasing the demand for oil and gas for decades to come.
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fortune--2020-06-15--The 8 cloud companies that crushed it in Q1

You didn’t have to be Warren Buffett to predict that cloud service providers—which are essential to remote work—would do well during the pandemic, even as sectors like airlines and hospitality took a beating. But that doesn’t mean every cloud company performed the same.
In an incisive essay, Jamin Ball of Redpoint Ventures examined how 54 publicly traded cloud companies, which reported earnings between late April and early June, performed over the first quarter.
All but three of the 54 firms beat analyst expectations, and many of them did so by a wide margin. Once again, this is hardly surprising given how many people and companies had to embrace remote work in 2020—a situation favoring firms that can provide cloud-based tools to communicate, shop, invoice, and much more.
Ball, however, used a series of financial metrics to identify the best of the bunch. The metrics include a few commonplace ones, like share price appreciation, but more nuanced ones too. These included net revenue retention—a number that looks at how much revenue increased for a given cohort of customers—as well a company’s cost of customer acquisition.
This analysis produced eight standouts among the 54 companies Ball analyzed, each of which performed well across his various metrics. Some of the companies are well known like Zoom, which is everywhere these days, and the e-commerce giant Shopify.
The others may be less well known to many consumers and investors. They include information monitoring service Datadog and Bill.com, which offers tools to create and manage digital invoices.
Two cybersecurity companies, CrowdStrike and Zscaler are on the list and so is San Francisco–based Twilio, which helps companies automate text message services. Rounding out Ball’s best-in-cloud ranking is Fastly, which helps companies with content delivery and online streaming.
All of these companies are relatively recent arrivals to the public markets, and investors view them as high-growth players compared with longtime cloud incumbents like Microsoft and Adobe. Unsurprisingly, their share prices already reflect this bullish sentiment.
One passage in Ball’s essay, highlighted by several readers, explains how the combination of high-growth potential and predictable revenue has made these cloud stocks so appealing to many investors.
“Companies like Twilio, with high net retention of 143%…can afford to add 0 new customers over the next year and still grow 43% annually. This is astounding, and something no other industry can claim. The lifetime value of each customer…is often multiples greater than the cost to acquire them. The combo of predictable revenue streams, high (and in some cases accelerating) revenue growth, and attractive unit economics have made SaaS [software as a service] an incredibly attractive market throughout these turbulent times,” Ball writes.
Sounds like a sector even Warren Buffett could love.


fortune--2020-06-15--How Beijing’s second coronavirus wave triggered a salmon boycott

A new coronavirus outbreak in Beijing is claiming an unexpected victim: imported salmon.
On Sunday, Beijing authorities confirmed 59 new coronavirus cases, which brings the number of active infections in the city to 80. The outbreak marks the city’s first reports of locally transmitted infections in two months. In total, Beijing has reported 673 infections and nine deaths since the pandemic first broke out in late January.
Authorities believe the cases can all be traced to Xinfadi, a large wholesale meats and vegetables market in the city’s southern district of Fengtai that supplies 70% of the city’s produce. Public health officials investigating the outbreak found traces of the virus on a cutting board used by a seller of imported salmon at the now-shuttered market, a government official said on Saturday. The disclosure sparked fears that salmon imported from Europe may be contaminated with the virus, putting in jeopardy China’s $700 million market for the fish.
Salmon carrier?
Supermarkets across Beijing have removed salmon from their shelves, and traders elsewhere in China temporarily stopped importing salmon, even as public health authorities downplayed the likelihood of salmon as a virus carrier. They have cautioned that, while technically possible, it is unlikely that imported salmon caused the new outbreak.
“Our seafood products are typically stored and transported in cold containers, thus it is possible for the virus to be preserved for a long time and increase the likelihood of infecting people,” said Wu Zunyou, chief epidemiologist at the Chinese Center for Disease Control and Prevention (CDC). “[But] we cannot conclude that salmon is the source of infection just because novel coronavirus was detected on a chopping board of a seller.”
Ben Cowling, a professor of epidemiology at Hong Kong University, said that it’s “very unlikely” the disease came from salmon.
Still, the backlash against salmon in China was almost immediate.
“There is zero demand for salmon now. Deliveries have stopped. But I think this will blow over,” a salmon trader in the southern city of Xiamen told the Australian Financial Review on Monday.
As the largest exporters of salmon to China, Chile, Norway, Australia, and Denmark are set to be hardest hit by the sudden drop in demand.
The Global Times, a Chinese nationalist tabloid, fueled the salmon speculation on Sunday when it floated two possible explanations for the new Beijing cluster: that it came from imported seafood or from infected humans who entered the market.
“It’s much more likely that there was an infected person,” Cowling says.
Lockdown measures
Origins aside, the new outbreak in Beijing has forced the capital into “wartime emergency mode” to contain the spread, local official Chu Junwei said at Saturday briefing.
In response to the outbreak, Beijing officials have embarked on a massive contact-tracing and testing campaign for people with links to the market. Authorities converted a sports stadium into a COVID-19 testing center, and on Sunday alone reportedly tested 76,499 people who had visited Xinfadi.
As of Monday, Beijing had placed 20 residential compounds surrounding the market under lockdown and instituted new restrictions on nearby neighborhoods, such as barring nonresidents from entering.
Even in this early stage of the outbreak, the city government has punished several officials for allowing the virus to spread. On Monday, it dismissed the manager of the market and two local district government officials for failing to implement proper COVID-19 prevention and control measures, according to Chinese state media.
Provinces surrounding Beijing have warned residents against traveling to the capital city; new cases in Liaoning, Hubei, and Sichuan provinces are believed to have ties to Beijing’s outbreak.
The outbreak and state efforts to associate it with an imported good speak to the nationalist nature of China’s battle against the coronavirus. Beijing has touted its early containment of the virus, first detected in the Chinese city of Wuhan, as proof that its authoritarian style of government is superior to Western democracies like the United States. Every new outbreak of the coronavirus in China is a threat to that claim.


fortune--2020-06-15--The companies that have proved their value in this crisis

The 8 cloud companies that crushed it in Q1

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good Monday morning.
Which companies have proven their lasting value during the crisis? The Harris Poll has taken a stab at answering that question, surveying American attitudes about each company’s resolve, integrity, responsiveness and permanence. (See more here.) The top ten:
1) US Postal Service
2) Clorox
3) Google
4) UPS
5) Walmart
6) Amazon
7) Purell
8) Microsoft
9) FedEx
10) CVS
The poll also shows that while the U.S. economy is reopening, fear is not subsiding. The latest wave of poll results–taken June 6-8–finds 52% of respondents fear they could “die as a result of contracting the virus”–still near record highs. That’s perhaps not surprising, given that seven states are seeing their coronavirus cases rise significantly.
Separately, a poll of IT workers by Xerox shows that an estimated 82% of workers who shifted to work-from-home during the pandemic will have returned to the workplace in 12-18 months’ time. And 56% of those responding say their companies are increasing their technology budgets, both to allow more flexible work and to speed digital transformation.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Stocks fall
Stocks fells in Asia and Europe today, due to fears over fresh coronavirus outbreaks in China and the U.S. The Nikkei 225 was down 3.5%, the Hang Seng down 2.2% and the ASX 200 also down 2.2%. The Stoxx Europe 600 fell around 2.4% on opening before recovering slightly, and U.S. futures point to an initial drop of around 2.5% this morning, erasing Friday's gains. Wall Street Journal
BP writedown
BP is writing down the value of its business by between $13 billion and $17.5 billion, due to what it sees as sustained weaker demand for energy, thanks to coronavirus pandemic. BP: "The aftermath of the pandemic will accelerate the pace of transition to a lower carbon economy." BP said in February that it would become a "net-zero" company by 2050. Fortune
V quest
Morgan Stanley still thinks a V-shaped recovery is coming this year. Unlike many other observers, the bank's economists think the global economic output will be back to pre-pandemic levels by Q4. They wrote: "In our base case, we assume that a second wave of infections will occur by autumn, but that it will be manageable and result in selective lockdowns…In contrast, we assume in our bear case that we re-enter into the strict lockdown measures implemented earlier this year, resulting in a double-dip." Fortune
Circuit breaker
Positive coronavirus tests for 17 passengers on a June 11 China Southern Airlines flight marked the first time the country has triggered its "circuit-breaker" flight regulations. As Fortune's Naomi Xu Elegant explains: The circuit-breaker rules mandate that all incoming passengers to China must be tested for coronavirus. If five or more passengers on the same flight test positive, that airline will be suspended for one week. If ten or more passengers on one flight test positive, the suspension increases to four weeks. The rules apply to all flights into China, and passengers are tested on arrival." Fortune
AROUND THE WATER COOLER
L'Oréal future
The beauty sector is seeing an acceleration in digital transformation due to the pandemic, according to L'Oréal's chief digital officer Lubomira Rochet, who says: "In ecommerce, we achieved in eight weeks what it would have otherwise taken us three years to do." Around a fifth of the company's revenues now come from its own ecommerce operation or platforms such as Amazon and Walmart. Financial Times
Air traffic
Gatwick, the second-largest airport in the vicinity of London, England, reckons it will take three to four years for passenger volume levels to return to those seen last year, CEO Stewart Wingate said today. Big airlines are scaling back their presence at Gatwick due to the crisis—Virgin Atlantic is ending its operations there and British Airways said it may follow suit. CNBC
Espionage sentence
Paul Whelan, arrested late 2018 in Russia on spying allegations, has been sentenced to a 16 years behind bars. The dishonorably-discharged marine, who subsequently worked as security chief for a U.S. auto parts firm, maintained his innocence, was sentenced today despite protestations from the U.S. about the fairness and transparency of his trial. Deutsche Welle
Plastic waste
Given that the coronavirus crisis has "reiterated that we cannot live without plastic," how best to get plastic recycling efforts back on track? According to Surendra Patawari, chairman of circular-economy firm Gemini Corporation, the solutions lie in education, government help in promoting demand for recycled material, and the proper monitoring of companies' recycling commitments. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-06-15--Eco-cleaning supply startup Blueland’s founder on meeting supply and demand when your competitors ca

Eco-cleaning supply startup Blueland’s founder on meeting supply and demand when your competitors can’t

This is an installment in a special series, Startup Year One, interviewing startup founders about the major lessons they have learned in the immediate aftermath of their businesses’ first year of operation.
Sarah Paiji Yoo has been a serial entrepreneur for the past 10 years, having launched companies like handcrafted Italian shoemaker M.Gemi, kids clothing label Rockets of Awesome, and mobile shopping app Snapette.
“I always loved the opportunity and challenge of building a new company, brand, and products from the ground up, but when I became a new mom, I developed a deep-seated desire to do something more personally meaningful,” says Yoo. “As a result, I took a break from work when I became a mom to step back and rethink how I wanted to spend my time and make an impact on the world.”
During that time, Yoo became passionate about curbing household waste and single-use plastic consumption. “That’s when I realized that I could have a much larger impact, beyond my personal consumption, if I could provide consumers with more choice,” she says.
Yoo cofounded Blueland last year, and the startup just hit its first birthday this past April. The timing couldn’t have been better. With the outbreak of COVID-19, cleaning supplies are among the hottest commodities of the year. And Blueland has seen a huge spike in sales since late February, and the brand’s Instagram following has increased 33% since March. While the company won’t disclose specific dollar sales figures at this time, Blueland says sales have increased by 250% over the four-month period from February to May, versus the prior four months (October 2019 through January 2020).
The brand’s streamlined, pastel-hued aesthetic might have fueled the Instagram love, but Blueland’s sales bump had help—or more like Blueland could help consumers when its competitors couldn’t. When grocery stores and local retailers were seeing their shelves cleared dry of basic household necessities, including Clorox and Lysol products, many people turned online for anything they could find.
Still, these shoppers aren’t the typical eco-conscious consumers who care about their carbon footprint, but they are now buying eco because it’s available. In an effort to retain these new customers that have been turned on to the brand for convenience rather than mission, Blueland has had to change how it speaks to these newcomers, who aren’t as driven by sustainability as the company’s target demographic.
CEO and cofounder Yoo spoke with Fortune recently about her first year in business, building a loyal customer base, and what life during and after the pandemic might look like.
This interview has been lightly edited and condensed for clarity.
Blueland cofounder and CEO Sarah Paiji Yoo Courtesy of Blueland
Fortune: With the pandemic shutdowns and working from home, not only are consumers more concerned with buying cleaning products but they’re also spending a lot more time at home. (I’ve heard from many friends and colleagues saying their homes are cleaner than ever, for this reason.) With that in mind, how does Blueland stand apart from legacy brands as well as other up-and-comers?
Yoo: We definitely are seeing that people are cleaning more than ever and more interested in purchasing our categories of products online than ever before. We do believe that many of these changes in consumer behavior are here to stay. We’ve heard from our customers as well that they have a whole new perspective on cleaning, and many are cleaning both their hands and surfaces around their home longer and more frequently.
Because consumers are cleaning more frequently and doing the cleaning themselves, they also seem to have become more discerning and interested in what products they are using. We’ve received a lot of questions from consumers wanting to understand how our nontoxic cleaning products work and why they are effective at washing away germs without the use of harsh, toxic chemicals.
To maximize our environmental impact and drive widespread adoption, it was important to us from the very beginning to flip conventional notions of “eco” on its head—to most, it means more expensive, less effective, and more work. Our tablet refills are just $2, so that consumers can actually save money with our solution, versus buying a brand-new plastic bottle of liquid cleaner. Our products have also been proven in tests run at independent labs to outperform the leading competitors.
And lastly, our products are convenient and easy to use: simply drop a tablet into a bottle filled with warm water. After a few minutes, you’re ready to get cleaning. From an environmental perspective, our products are the only cleaning products that come packaged in compostable paper.
“I decided to cut back on my plastic consumption, but then I realized how it was to do as a consumer, that so many of our most everyday products seemed to come packaged in single-use plastic,” Yoo says. Courtesy of Blueland
How has technology shaped the development of Blueland, whether it be the influence of big data or social media?
Technology has powered communications between our geographically distributed team as well as global supply chain and has enabled us to work together quickly and effectively. In even the world of COVID-19, we’ve been able to continue our work as a team and with suppliers and manufacturers and even creative partners effectively through a mix of video communications, Slack, email, and collaborative tools and platforms.
Technology also powers our robust data and analytics tools and approach, which enables us to create better products and deliver a better experience for each of our customers and prospective customers, by helping us distill down and find relationships and trends among thousands of variables.
Technology has also powered our community, especially on social media. We’ve grown to almost 160,000 Instagram followers in just one year. It continues to be the most important marketing channel for us—to both reach new customers organically as well as engage with our existing customers every single day.
What were some of the biggest hurdles you faced in the past year? What surprised you the most?
The biggest hurdles for us continue to be related to creating products that have never been created before and reinventing an industry that hasn’t historically been set up to put the planet first. We have been working on our two newest products—powder dish soap and dishwasher tablets—for over a year. In this process, we’ve had to create brand-new manufacturing and supply chains, convince ingredients and packaging companies to create custom solutions just for us, and create over 100 iterations of these two products before landing on the final formulation.
“As a new mom, I did a lot of research into the water I was using to make my son’s baby formula. I was horrified to learn how many microplastics from our oceans and waterways were now in our food and drinking water—the same water I was using for my son’s baby formula.” Courtesy of Blueland
What kind of feedback have you received from your customers, and have you (or will you) apply that feedback to how you sell your products in the future?
We have a very robust and open dialogue with our customers, which we encourage through social media, email, and customer service interactions. It helps us get valuable real-time feedback for our products, messaging, mission, and other activities and enables us to make better and faster improvements.
This year alone, it’s led us to make changes to our packaging, offer subscriptions, and helped shape our product pipeline. Since we launched, our customers have been asking for dish soap—it’s the number one requested item and has been requested more than 5,000 times via Instagram comments and DMs [direct messages]. On June 16, we’re thrilled to launch two plastic-free forms of dish soap: a powder for hand washing dishes, and a dry-form plastic-free dishwasher tablet.
Obviously, amid the coronavirus pandemic, consumers’ purchasing habits and practices are going to change. How will Blueland adjust its business plan for the immediate future?
We’ve continued to focus on how to make it increasingly convenient to purchase online, including our subscription offering, which we introduced during the pandemic. We’ve also increased our focus on highlighting the efficacy of our products and showcasing the test results we have from third-party labs that show our products work extremely well and outperform leading brands.
Previously, we were much more focused on our eco and nontoxic messaging, but I believe that going forward, consumers will continue to be also very interested in efficacy.
All Blueland products are nontoxic, and like other non-antibacterial cleaners and soaps, its products are advertised to be effective at removing germs from skin and home surfaces. Courtesy of Blueland
At the same time, how does a shutdown of this nature affect the future of the business, from product development to raising capital?
Given we sell hand soap and cleaning products, we’ve been in the small minority of businesses that have seen an increase in demand from consumers during the current crisis. In order to meet this unexpected demand and service our customers in a timely manner, we have shifted much of our marketing team over to fulfillment and customer service. Our team has been all hands on deck, willing to wear widely different hats for the time being, as we are very grateful that we are able to serve a real need at this time.
And despite the increase in volume and pressures on our operations, we have actually decided to take steps to slow down some of our processes to keep our team safe and de-risk longer term disruptions to our operations. For example, we instituted split shifts in our warehouses to reduce the number of team members working at any given time.
This period has highlighted for us just to what degree various parts of our supply chain are stretched. As air freight costs increased six times over during COVID, it was more difficult for us to increase our volume of our bottles, which are manufactured in Asia, versus our tablets and powders, which are manufactured in the U.S.
It has not impacted our approach to raising capital. We kicked off this year focused on building a financially sustainable business that can be profitable at our option in the near future. We continue to make strides toward this goal to not be dependent on outside capital. This decision early on in our life cycle and prior to COVID-19 has certainly alleviated some of the pressures that would have come to our business with this pandemic.
Looking beyond the post-pandemic era, which could be anywhere from a year to a few years from now, how do you plan to grow Blueland and what do you want the business to look like five years from now?
We’re thrilled to continue to grow Blueland into a household name. Our goal from day one has been to reach as many households as possible and to have the greatest environmental impact on the planet. In five years, we’ll have introduced a range of sustainable, nontoxic products not only across household cleaning but other categories as well. The Blueland home will be filled with beautiful, reusable, permanent vessels that can be refilled easily and affordably and delivered right to your door.


fortune--2020-06-15--Russian court sentences American businessman to 16 years for spying

A Russian court on Monday sentenced an American businessman to 16 years in prison on spying charges, a sentence that he and his brother rejected as being political.
The Moscow City Court read out the conviction of Paul Whelan on charges of espionage and sentenced him to 16 years in a maximum security prison colony. The trial was held behind closed doors.
Whelan, who was arrested in Moscow in December 2018, has insisted on his innocence, saying he was set up.
Speaking after the verdict, U.S. Ambassador John Sullivan denounced the secret trial in which no evidence was produced as an egregious violation of human rights and international legal norms. He described Whelan’s conviction as a mockery of justice and demanded his immediate release.
Whelan’s brother David said lawyers will appeal the verdict that he denounced as political, adding in a statement that “the court’s decision merely completes the final piece of this broken judicial process.”
“We had hoped that the court might show some independence but, in the end, Russian judges are political, not legal, entities,” the statement said. “We look to the U.S. government to immediately take steps to bring Paul home.”
Whelan, a 50-year-old corporate security executive and Marine Corps veteran from Novi, Michigan, was arrested outside a Moscow hotel. He was in Russia to attend a friend’s wedding at the time.
Whelan, who also holds British, Irish and Canadian citizenship, denies the charges of spying for the U.S. that his lawyers said stem from a sting operation. Whelan’s lawyer has said his client was handed a flash drive that had classified information on it that he didn’t know about.
Whelan has publicly complained of poor prison conditions in Russia and has said his life is in danger. Last month, Whelan underwent surgery for a hernia.


fortune--2020-06-15--Is a second wave inevitable? The stock markets seem to think so

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning, Bull Sheeters. Buckle up. Equities are facing a bumpy ride this morning as second-wave jitters grip the markets. That’s despite economies continuing to reopen.
Let’s check in on the action.
Markets update
Asia
Asia’s major indices have begun the week in the red. Hong Kong’s Hang Seng and Japan’s Nikkei are down more than 2% .
and Japan’s are down more than . There’s a fresh outbreak of COVID-19 in Beijing , spreading fears of a second wave of the virus hitting the world’s No. 2 economy. India too is seeing a worrying spike that could shut down parts of its economy.
in , spreading fears of a of the virus hitting the world’s No. 2 economy. too is seeing a worrying spike that could parts of its economy. SoftBank has pumped $500 million into a series of Credit Suisse investment funds, which in turn has backed the Japanese conglomerate’s Vision Fund. That means some of CS’s clients may unwittingly be backing SoftBank startups, the FT reports.
Europe
The European bourses plunged out of the gates. The benchmark Stoxx Europe 600 opened 2.1% lower . BP is down 5% after announcing a $17.5 billion write-off.
out of the gates. The benchmark opened lower is down after announcing a write-off. The last round of trade talks between the EU and U.K. went nowhere. Can Boris Johnson break the impasse on today’s video call?
between the EU and U.K. went nowhere. Can break the impasse on today’s video call? European countries, including Germany and France, will further open their borders to neighbors today in a bid to salvage some of the 2020 summer travel season. After nearly three months on the tarmac, budget carrier Easyjet will resume (mostly domestic) flights today. Food onboard? No. Face masks required? Yep.
U.S.
The Dow , S&P 500 and Nasdaq futures point to a rough start to the week. The Dow ( -5.5% last week ), S&P ( -4.7% ), Nasdaq ( -2.3% ) had their worst weeks since March 20 .
, and futures point to a rough start to the week. The Dow ( ), S&P ( ), Nasdaq ( ) had their worst weeks since . Record numbers of coronavirus cases and hospitalizations hit a swath of U.S. states this weekend, particularly the Sun Belt .
and hit a swath of U.S. states this weekend, particularly the . Now for some good news: Morgan Stanley is doubling down on its call for a V-shaped recovery in the global economy. A “sharp but short” recession is in the cards, with healthy recovery by Q1 2021 .
is doubling down on its call for a in the global economy. A “sharp but short” recession is in the cards, with healthy recovery by . What’s on this week’s calendar? Fed Chairman Jerome Powell will deliver monetary policy testimony to the Senate on Tuesday; retail sales (Tuesday); housing starts (Wednesday); jobless claims (Thursday); manufacturing data (Thursday).
Elsewhere
Gold is down.
is down. The dollar is up.
is up. Crude extends its downward slide. Brent is off 3%, trading below $37.50/barrel.
Winners and losers
Investors this morning see more of the latter. Take Big Oil. BP, for one, is telling the markets it’s banking on “weaker demand for energy for a sustained period.” The energy sector and crude are sharply lower on the news.
But it’s not an overwhelmingly brutal picture. Some of BP’s biggest customers—the airlines—are seeing a jump in demand, which will only grow (from near-zero) as flights resume. Motorists too will be road-tripping in the weeks ahead. (I’ve been criss-crossing Central Italy the past few days; I’ve filled the tank three times. Each time, it cost me a bit more). Whether that’s enough to push the price of oil back above $40, then $50 per barrel, is the big question hanging over the energy markets in the near term.
I was curious about where consumers are spending their money as lockdown measures ease, and found some interesting data in Bank of America Securities latest research note on the U.S. economy from Friday evening.
According to BofA, there are big state-by-state and sector-by-sector differences as it pertains to consumer spend. Spending is relatively lower in states where lockdown measures are strictest. That makes sense. In Georgia, “total [credit] card spending” is up year-on-year, while it’s down in New Jersey, as the table below shows.
But, regardless of state, there are a number of categories that consumers are avoiding like, well, the plague. That includes entertainment services (okay, sporting events and concerts have been canceled just about everywhere) and beauty salons. On the flip side, online retail and grocery spend is up across the country.
That last line though tells the full story. Card spend is down nearly across the board—in some cases, by a significant double-digit measure. That’s why BofA is predicting economic activity will jump from contraction to transition to recovery. It won’t be a smooth flip-of-the-switch contraction-to-recovery bounce, in other words.
The transition slope will more likely be a U-shaped phenomenon for the likes of energy and entertainment. For those sectors, it could take several quarters to recover; years, even. Home improvement and furniture, meanwhile, will bounce back quickly.
For the economy as a whole, we’re firmly in the “transition” part of the trend curve. We may be here for a while.
***
Postscript
Warning: this item will include a bit of poetry.
Every Italian school kid is required to set to memory the poetry of Giacomo Leopardi, the 19th century poet who hailed from this part of the country. His most famous poem, L’infinito, is an homage to the wild terrain of the region—the cartoon-like hills that plunge and climb, plunge and climb some more, infinitely rolling from one end of the horizon to the next. The poem opens with the lines, This lonely hill was always dear to me/ and this hedgerow, which cuts off the view/ of so much of the last horizon.” Here’s Dustin Hoffman taking a crack at it a few years ago.
I can never remember much more than that first line. But it faithfully pops into my head the moment I’m back in the Sibillini Mountains, taking in the view.
On Thursday, when the markets were tanking, I was up there in the mountains. (Hours earlier, I had spent part of my stimulus check on a new mountain bike). I could see nothing but green.
The land of Leopardi: Italy’s Marche region. Original Photo: Bernhard Warner.
So, that’s where I was the past few days. I needed to clear my head. Too many days cooped up in an apartment, staring at screens, made me feel the opposite of “infinite” and all-seeing.
Afterwards, I cycled back to a mountain refuge that, over the years, has grown into a 3-star hotel and restaurant. I bought a beer and sat at a table. I was the only one there. A few moments later the manager came by. She started to make small talk. When she heard my accent, she ventured: English? American, I corrected.
She excitedly showed me her smart phone. She wanted to post images to Instagram in multiple languages, and needed someone—me!—to edit her English entries. We agreed a reference to Leopardi was needed. “Experiencing the infinite,” it read. It sounds better in Italian, I told her.
She was so happy with our collaboration, she offered me the beer on the house.
Now that’s poetry, I thought.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
A note from my Fortune colleagues on a timely new initiative:
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here. https://bit.ly/WorkingWhileBlack
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
D-Day. It's like 2019 all over again. Two major retailers—Dick's Sporting Goods and Target—announced big dividends news late last week. Target will raise its payout to investors while Dick's will reinstate its previously suspended dividend.It's seen as a vote of confidence in the consumer, Fortune's Anne Sraders notes.
Fighting NYSE, Nasdaq. The Members Exchange won't begin trading until September, but it continues to line up some huge Wall Street names. Last week it was Citigroup. What's Member's Exchange—MEMX, for short? It's an alternative exchange meant to compete with the NYSE and Nasdaq to bring down fees on market data and transactions. It could be a huge deal for investors, but it has a few obstacles to overcome, as Fortune's Rey Mashayekhi explains.
The FOMO fund. Wall Street Journal's James Mackintosh found what he calls a "FOMO fund." It's a kind of Goldilocks vehicle in which investors can hold nice safe assets, but also take bets on another market surge. It's run by LongTail Alpha LLC, and it's up nearly 94% this month.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
“You have heard of a flight to quality...How about a flight to crap? You’re seeing a speculative fervor.”
That's Steve Sosnick, chief investment strategist at Interactive Brokers speaking to the FT about the phenomenon of retail investors driving up beaten-down shares that the pros want nothing to do with.


fortune--2020-06-15--Hong Kong security laws may not be retroactive, Chinese official says

Sweeping new national security laws being imposed on Hong Kong might not be retroactive, a Chinese official said, potentially limiting the scope of controversial legislation that’s currently being drafted in Beijing.
Deng Zhonghua, deputy director of the Hong Kong and Macau Affairs Office, made the comments Monday at an event in the mainland border city of Shenzhen. The conference was organized by the Chinese Association of Hong Kong & Macau Studies and was attended by several officials responsible for affairs in the former British colony.
“It needs to be clarified that, even though there are differences in the Hong Kong and mainland legal systems, the principles used in the mainland with regard to criminal laws are not fundamentally different from those in Hong Kong,” Deng said. “They all include principles such as the laws will not be applied retrospectively, presumption of innocence, suspects and defendants will have right to defense.”
Deng added: “All these principles can be stipulated in this legislation.”
The Chinese government and its appointed leaders in Hong Kong have been seeking to reassure local residents, foreign officials and overseas investors about the looming legislation. Pro-democracy activists and their supporters have expressed alarm about the security laws, which would criminalize the harshest criticism of Beijing after a year of unprecedented and often violent anti-government protests.
Organizations ranging from business chambers to human rights groups have criticized Beijing’s move to bypass Hong Kong’s legislature and impose laws banning subversion, secession and foreign interference. Opponents say the push would undermine the freedoms promised to Hong Kong before its return to Chinese rule in 1997 and erode the city’s appeal as a global financial hub.
For months last year, protesters chanted “Liberate Hong Kong! Revolution of our times!” in marches that drew more than a million people. One band of radicals broke into the Legislative Council on the anniversary of the handover, ransacking the chamber and defacing the city’s emblem. Some high-profile activists traveled to Washington to advocate for legislation that would punish Beijing for its crackdown.
Deng’s comments echo remarks by Hong Kong Justice Secretary Teresa Cheng, who said in a blog post Sunday that the Hong Kong Special Administrative Region’s Common Law legal system had much in common with China’s system.
“There are a number of commonalities between the civil and common law systems respectively in the Mainland and the HKSAR, such as retrospectivity, presumption of innocence, burden of proof and standard of proof, legal certainty, etc.,” she wrote.
At the same time, she said it was “impracticable and unreasonable to expect that everything in a national law, the National Security Law, will be exactly as what a statute in the HKSAR common law jurisdiction would be like.”
‘Rare Circumstances’
In his remarks, Deng referred to Beijing’s plan to establish new national security enforcement mechanisms as part of the impending legislation, a move that has raised fears China would allow its security forces a free hand to operate openly in Hong Kong for the first time.
Deng said that Hong Kong should remain in charge of most enforcement and legal processes surrounding the security legislation, but mentioned that China “should also reserve the right to have jurisdiction over cases that seriously endanger national security under very rare circumstances.” That reference could raise the specter of extradition — an issue that sparked last year’s protests — or trials by Communist Party-controlled judges.
“For this law to be effective, the key is the establishment of strong enforcement mechanisms, including setting up agencies to safeguard national security and to grant them necessary enforcement powers,” Deng said. “Of course, there are only few cases where China will have jurisdiction over. It will not replace the responsibilities of Hong Kong’s relevant departments, nor would it affect judicial independence and final adjudication that Hong Kong enjoys under the Basic Law.”
Proposed Agenda
It is not yet clear when China will finalize its plans for the new security laws.
The National People’s Congress Standing Committee, the top decision-making body of China’s rubber-stamp legislature that had originally unveiled Beijing’s plan to impose the new laws, will hold its bi-monthly session from Thursday to Saturday. The Hong Kong national security legislation is not on a proposed agenda published last week.
The Hong Kong security issue could be added in a last-minute change to the agenda, or the committee could also hold an interim meeting if there’s a special need to do so.


fortune--2020-06-15--How Bytedance is trying to consolidate TikTok’s user base in India

Beijing ByteDance is consolidating its position in India by shutting down short-video app Vigo—one of the company’s alternatives to its own hugely popular TikTok app.
India is TikTok’s largest market. According to data analytics firm App Annie, the viral app had 81 million monthly active users (MAU) in India last year, who spent a total of 5.5 billion hours inside the app. By comparison, TikTok had 30 million MAU in the U.S. Vigo, which ByteDance launched under the Hypstar name in 2017, has 4 million MAU in India.
On Monday, ByteDance announced it would discontinue Vigo, sending a notification to users thanking them for the “time you’ve spent with Vigo.” The app will cease to operate in India on October 31 and, according to TechCrunch, will be discontinued in all other markets too. ByteDance will help users transfer their Vigo content to TikTok accounts before then.
Vigo—and its low-data-usage sister app, Vigo Lite—differs from TikTok because it uses cash to incentivize participation. Vigo issues reward credits, called “flames,” to users who upload popular videos; the more popular a video becomes, the more credits the content creator receives. Each “flame” is worth $0.015, and users can use PayPal to cash out when they accrue over $1.
TikTok doesn’t pay its users for creating content. Instead, influencers on the app have to barter with brands directly to receive money for advertising products. However, TikTok is currently exploring ways to monetize its position in India; consolidating its user base there could give the app more sway with advertisers.
However, some Vigo users might be tempted to switch to local rival Chingari instead. Launched last year, Chingari recently passed 100,000 downloads. Like Vigo, the app pays users for creating viral content. The app’s cofounder Biswatma Nayak says Chingari “isn’t a clone of some foreign app” but has been “designed in keeping with needs of Indian users.”
“It is time for all of us to switch to Indian-made apps like Chingari,” Nayak told India TV News, adding that the app answers Prime Minister Narendra Modi’s recent call for consumers to be “Vocal for Local”—a rebranding of Modi’s earlier “Make in India” campaign that’s designed to spur local business and consumption.
India’s promotion of domestic apps comes as TikTok once again faces backlash in the country for failing to properly police content. The Chinese-owned app was temporarily banned last year after a court received complaints that users were sharing pornography.
Last month, a video appearing to show an acid attack on a woman caused users to flood TikTok’s Google Play page with negative reviews. The acid attack video turned out to be a fake, and Google removed millions of associated negative reviews it determined to be coming from fake accounts. Nevertheless, TikTok’s user rating fell from 4.5 to 1.2 stars overnight.


fortune--2020-06-15--China’s ‘circuit-breaker’ flight restrictions are triggered for the first time

China’s aviation authority suspended a China Southern Airlines flight route on Sunday after 17 passengers on a June 11 flight tested positive for the coronavirus.
It is the regulator’s first use of its new “circuit breaker” flight regulations, which came into effect on June 4 as domestic carriers expanded flights and days before China reintroduced international flights after months of border restrictions to prevent the import of the virus.
The Civil Aviation Administration of China (CAAC) suspended the airline’s Dhaka, Bangladesh, to Guangzhou, China, flight—the weekly flight CZ392—for four weeks starting June 22 because of the infected passengers. The airline’s other flights won’t be affected.
The circuit-breaker rules mandate that all incoming passengers to China must be tested for the coronavirus. If five or more passengers on the same flight test positive, that airline will be suspended for one week. If 10 or more passengers on one flight test positive, the suspension increases to four weeks. The rules apply to all flights into China, and passengers are tested on arrival.
The CAAC on June 8 relaxed its flight restrictions for international carriers after the U.S. threatened to block Chinese airlines in retaliation for China’s ban, which included the three major U.S. airlines, Delta Air Lines, United Airlines, and American Airlines.
International carriers are currently limited to one flight per week to one city in China of their choice. If none of their passengers tests positive for the coronavirus for three consecutive weeks, the airlines will be able to increase capacity to two flights per week.
The circuit breaker is designed to cut the number of coronavirus cases imported into China. China Southern Airlines had been operating two flights per week between Dhaka and Guangzhou since the beginning of June. Both those flights will be canceled under the circuit-breaker rule.
The airline’s domestic routes won’t be affected by the measure. It will be able to resume its Dhaka-Guangzhou route when the four-week ban elapses.
The China Southern Airlines flight suspension comes as China grows more wary of a “second wave” of COVID-19. Beijing reported a new cluster of 79 local infections this weekend, prompting authorities there to lock down parts of the city.
Beijing had not recorded a local case in 56 days before the new outbreak, which is tied to a large seafood market. Local cases are especially worrisome because they suggest the virus has been spreading undetected among city residents, making the outbreak harder to trace. Imported cases, on the other hand, are more easily attributable to travelers.
China’s air travel industry, battered by nationwide travel bans, on Friday recorded 1 million daily domestic passenger trips for the first time since January. The tally represents 61.5% of the total trips made on the same day last year, before the pandemic.
Correction: an earlier version of this story stated that China Southern Airlines was a member of the SkyTeam Alliance. China Southern left the SkyTeam Alliance on Jan. 1, 2019.


fortune--2020-06-15--The earliest coronavirus vaccines may not protect you from getting infected

Desperation for a way to keep economies from collapsing under the weight of Covid-19 could mean settling for a vaccine that prevents people from getting really sick or dying but doesn’t stop them from catching the coronavirus.
Although a knock-out blow against the virus is the ultimate goal, early vaccines may come with limitations on what they can deliver, according to Robin Shattock, an Imperial College London professor leading development of an experimental shot.
“Is that protection against infection?” Shattock said. “Is it protection against illness? Is it protection against severe disease? It’s quite possible a vaccine that only protects against severe disease would be very useful.”
As countries emerge warily from lockdowns, leaders are looking to a preventive shot as the route to return to pre-pandemic life. Fueled by billions of dollars in government investment, vaccines from little-known companies like China’s CanSino Biologics Inc. and giants like Pfizer Inc. and AstraZeneca Plc are in development.
At least one of the fastest-moving experimental shots has already advanced into human trials after showing an impact on severe disease — but less so on infection — in animals. Experts say such a product would probably be widely used if approved, even if that’s as much as it contributes, until a more effective version comes to market.
“Vaccines need to protect against disease, not necessarily infection,” said Dennis Burton, an immunologist and vaccine researcher at Scripps Research in La Jolla, California.
Still Susceptible
There are drawbacks, though. While holding the potential to save lives, such vaccines might lead to complacency in lockdown-weary nations, said Michael Kinch, a drug development expert who is associate vice chancellor at Washington University in St. Louis.
“My guess would be that the day after someone gets immunized, they’re going to think, ‘I can go back to normal. Everything will be fine,’” he said. “They’re not going to necessarily realize that they might still be susceptible to infection.”
Covid-19 is already thought to be spread by people without symptoms, and a symptom-preventing vaccine may create even greater numbers of them.
Vaccines are among the most effective weapons against infectious disease, and prevent up to 3 million deaths a year, according to the World Health Organization. Yet few, if any, are 100% effective in all people who get them. For example, about 3% of people who get measles vaccine develop a mild form of the disease, and can spread it to others.
130 Shots
In their attempts to confront a rapidly growing threat, developers are turning to technologies that have never been used successfully in humans. More than 130 shots are in the works for Covid-19 prevention, according to the World Health Organization.
Vaccines work by presenting the immune system with a form of a germ — or a key part of it — preparing the body to respond when a real exposure occurs. When that happens, immune proteins called antibodies glom onto the virus, halting its entry to cells. Sometimes vaccines ramp up immune T-cells, which don’t do as much to prevent infections, but can slow and eventually stop their progression.
The Drugs and Vaccines That Might End the Coronavirus Pandemic
A common approach to raising levels of antibodies is with injection of a virus that’s been inactivated or killed. About nine of these are in experimentation: One, made by China’s Sinovac Biotech Ltd., led to high levels of Covid-targeted antibodies in monkeys.
Another shot developed at the University of Oxford uses an innovative approach in which Covid genes are inserted into a different, harmless virus. Those make proteins that are recognized by the immune system, which raises defenses against a real infection.
About a quarter of the experimental shots listed by the WHO, including two already in human studies, follow the same approach as the Oxford vaccine. One of the advantages of the technology is its speed. AstraZeneca, which is partnering with Oxford, has said it will begin delivering doses for the U.K. as soon as September, and will have doses for the U.S., which helped fund development, the following month.
Over the weekend, AstraZeneca and four European Union countries said they reached an agreement to distribute hundreds of millions of doses of the vaccine.
Antibody Levels
How the shot affects infections and infectiousness still isn’t clear. William Haseltine, a former HIV researcher at Harvard University, pointed out in a blog for Forbes that animals had roughly the same amount of viral genetic material, called RNA, in their systems, whether or not they’d received shots. Levels of antibodies against the virus weren’t as high as in very protective vaccines, he said.
However, clinical signs of severe infection, like high breathing rate and pneumonia, were better in vaccinated monkeys. That might still make such a shot useful, according to Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.
“That vaccine doesn’t look like it’s a knockout for protecting against infection, but it might be really very good at protecting against disease,” Fauci told the medical news website Stat.
The vaccine will be a success whether it heads off infections or severe symptoms, AstraZeneca Chief Executive Officer Pascal Soriot said in a BBC interview. The vaccine’s progress to advanced studies was approved by an independent scientific panel, and the company is waiting to see how it performs, a spokesman said.
Fauci’s NIAID is partnered with Moderna Inc. on a Covid vaccine test whose primary goal is to show their vaccine prevents people from developing symptoms, the company said June 11. Preventing infections is a secondary goal.
Successful preventives must also bar onward transmission, said Daniel Barouch, a researcher at the Center for Virology and Vaccine Research at Beth Israel Deaconess Medical Center and Harvard University. Effective shots may allow some cells to become infected, but control the growth of the virus before it can be passed on to others, said Barouch, who is developing a vaccine with Johnson & Johnson.
Preventing Illness
The U.S. Food and Drug Administration is considering options for a vaccine that prevents illness.
“We would potentially consider an indication related to prevention of severe disease, provided available data support the benefits of vaccination,” FDA spokesman Michael Felberbaum said in response to questions. “For licensure we would not require that a vaccine protect against infection.”
Licensed vaccines including some against whooping cough have not been demonstrated to protect against infection with the pathogen that causes the disease but have been demonstrated to protect against symptomatic disease, Felberbaum said.
The notion of using imperfect vaccines and therapies is “fine,” Kinch said. “That’s just practicality. And we may follow those up with more-perfect. There will never be a truly perfect vaccine.”


fortune--2020-06-15--A ‘sharp but short’ recession: Morgan Stanley economists re-up forecast for V-shaped recovery

The global economy is in a new expansion cycle and output will return to pre-coronavirus crisis levels by the fourth quarter, according to Morgan Stanley economists.
“We have greater confidence in our call for a V-shaped recovery, given recent upside surprises in growth data and policy action,” economists led by Chetan Ahya wrote in a mid-year outlook research note on June 14.
Predicting a “sharp but short” recession, the economists said they expect global GDP growth will trough at -8.6% year on year in the second quarter and recover to 3.0% by the first quarter of 2021.
Morgan Stanley noted three reasons for why the recession will be short:
This is not an endogenous shock triggered by huge imbalances
Deleveraging pressures will be more moderate
Policy support has been decisive, sizable and will be effective in boosting the recovery
Official support isn’t likely to ease anytime soon, with both central banks and finance ministries pumping money into their respective economies, according to the note.
Risks to their outlook include developments with the coronavirus and the vaccine.
“In our base case, we assume that a second wave of infections will occur by autumn, but that it will be manageable and result in selective lockdowns,” the economists wrote, citing a scenario where a vaccine is broadly available by summer of 2021.
“In contrast, we assume in our bear case that we re-enter into the strict lockdown measures implemented earlier this year, resulting in a double-dip,” they wrote.
Profound Uncertainty
Morgan Stanley’s views contrast with more cautious outlooks by others including the International Monetary Fund, which last week warned that the global economy is recovering more slowly than expected and there remains “profound uncertainty” around the outlook.
The recent jump in Beijing’s coronavirus cases has raised fears of a resurgence of the pandemic in China, which may slow recovery in the world’s second-largest economy. China’s vice premier said risks are high for the outbreak in Beijing to spread, according to a Xinhua report.
Economists at JPMorgan Chase & Co. led by Bruce Kasman highlighted a risk that surging debt and deficits may force governments to wind back their massive fiscal stimulus.
“This turn in fiscal policy, together with the limited steps expected from central banks, is an important factor underlying our forecast for an incomplete recovery through 2021,” JPMorgan economists said in a note.


fortune--2020-06-15--1 in 5 people are at risk of developing ‘severe’ COVID-19 symptoms due to underlying health conditio

1 in 5 people are at risk of developing ‘severe’ COVID-19 symptoms due to underlying health conditions

Missing and murdered Native Americans : How to combat the worsening crisis in the U.S .

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One in five people worldwide have an underlying health condition that puts them at risk for a severe COVID-19 illness if they contract the virus, scientists found.
An estimated 1.7 billion people suffer from conditions ranging from type 2 diabetes to heart disease, according to a study published in The Lancet Global Health. About 349 million of them would probably need to go to the hospital for treatment if they were infected, Andrew Clark, an associate professor at the London School of Hygiene and Tropical Medicine, and colleagues found.
The researchers took risk factors highlighted in official guidelines, including heart disease and diabetes, and used broad epidemiology data such as the Global Burden of Diseases study to arrive at their estimates. Not everyone with an underlying condition would go on to develop severe symptoms, they said.
“It is time to evolve from a one-size-fits-all approach to one that centers on those most at risk,” Nina Schwalbe, a professor at Columbia University’s Mailman School of Public Health, wrote in an accompanying editorial. She called for a better understanding of risk factors including social determinants of health such as income, employment status and education.
Regions with younger populations, such as Africa, present less risk overall despite some spots where the prevalence of HIV and AIDS is high, the authors said. Others like Europe, where average ages are higher and almost a third of people have at least one health condition, may be less resilient. The report also highlighted risks for small island nations where the prevalence of diabetes is high, such as Fiji and Mauritius.


fortune--2020-06-15--Missing and murdered Native Americans: How to combat the worsening crisis in the U.S.

Why economists , hedge funds , and health officials are using this startup ’ s data to understand the pandemic

The U.S. is home to 574 federally recognized tribes with approximately 6.9 million Native Americans and Alaska Native citizens. But despite their population size and their vast and thriving communities, Natives often suffer problems silently, invisibly, without the benefit of public outcry or media attention.
Their problems can no longer remain in the dark: American Indians and Alaska Natives are facing a crisis of their own going missing or being murdered.
Our government is finally beginning to tackle the issue. The next step is for all Americans to join in on the efforts to end this ongoing tragedy.
Native Americans are more likely to experience violence than white people. According to a National Institute of Justice (NIJ) fact sheet, more than four in five American Indian and Alaska Native adults “have experienced some form of violence in their lifetime.” This equates to victimization rates that, compared with white people, are 1.2 times higher for Native women and 1.3 times higher for Native men.
The NIJ points out that while victimization rates among Native men and women are similar, the type of violence they experience differs: “They have experienced similar levels of psychological aggression and physical violence by intimate partners,” reads its fact sheet. “But women have experienced significantly higher levels of sexual violence (56.1% versus 27.5% for men) and stalking (48.8% versus 18.6% for men).”
For those who are missing, we lack a national data set. While a handful of states are starting to examine the issue to understand the problem, it is going to take a unified effort to fully understand what we are dealing with. But even without data, I know from my experience and from speaking with tribal leaders and Native communities that this is a massive problem.
I have heard of several incidents where families have had to conduct their own searches, often on foot or by horseback, for missing relatives because officials did not believe they were in danger. These families shared with me that their cries for help were not taken seriously, which has contributed to the lack of data on this issue. Some stories end with their family member being found deceased; others remain missing with no answers. Owing to years of dismissive and negligent responses, this has become a crisis that scars the hearts of our Native families and communities.
For years, I have heard stories like this and others that haunt me. It is dumbfounding that in this day and age, in the time of cell phones and social media, so many Native American communities still suffer invisibly and remain without answers or closure. But the crises that Native Americans face are not only theirs—they are our nation’s. Americans are suffering, and we have a moral obligation to ensure they get the justice that every American deserves.
Thankfully, under this administration, at the highest level, the crisis of missing and murdered Native Americans (MMNA) is being acknowledged. Last November, President Trump signed an executive order establishing the first ever MMNA federal task force. Named Operation Lady Justice, it was created to address MMNA through a multidisciplinary approach relying heavily on tribal input.
This May and June, the task force hosted virtual tribal listening sessions and spoke firsthand with Native communities about this issue. The task force heard difficult personal accounts of mothers, daughters, or nieces who have been missing for decades with no resolution. The quagmire of jurisdictional barriers and the remoteness of many of the communities, compounded by the lack of attention and response from area media outlets and the surrounding community, has contributed to their challenges. Silence and isolation allows the most vulnerable to become victims of the most horrendous crimes.
We Native Americans must be the voice that shatters the silence and demands justice. As Native people, we have been resilient through centuries of challenges. We have survived, rebuilt, and restored our languages, and we stand strong in our traditions and connections to our culture. But while we Native people must step up, we need every American to join us to help end this tragic and unnecessary crisis.
Whether it’s sharing social media posts when a Native American has gone missing, learning about Native American communities nearby, or keeping up to date with the efforts of the Operation Lady Justice task force and sharing that information with friends, every American can raise awareness that shines light on the problems that Native Americans face, and help to begin solving them.
To the tribal leaders and families who have been impacted by this tragedy, I want to thank you for never giving up the fight for your loved ones; your voices have been heard.
To every American, know there is power in unity. It is time we come together and put an end to this crisis.
Jeannie Hovland is an enrolled member of the Flandreau Santee Sioux Tribe, commissioner for the Administration for Native Americans at the Department of Health and Human Services’ Administration for Children and Families, and a member of the Operation Lady Justice task force.


fortune--2020-06-15--Cockroaches, a bloody pig mask, and a coverup. The 5 craziest allegations against former eBay offici

Cockroaches, a bloody pig mask, and a coverup. The 5 craziest allegations against former eBay officials

A bloody pig mask, spiders, and burner phones. These are just some of the dirty tricks allegedly used by six former eBay security officials in a harassment campaign against the publishers of a blog focused on the company.
According to federal prosecutors, the effort was led by James Baugh, eBay’s former senior director of safety and security, and David Harville, former director of global resiliency.
The monthlong harassment campaign, outlined in charges on Monday in a Boston federal court, allegedly focused on a couple in Natick, Mass., who publish a blog called eCommerce Bytes. The campaign against Ina and David Steiner included tactics ranging from threatening Twitter messages and fake late-night pizza deliveries to packages of live insects and pornography.
In September, the company fired the two officials and four others also charged in the plot. The plan, according to prosecutors, was set in motion after eBay’s then-CEO, Devin Wenig, who left the company suddenly in September, complained to his subordinates about the blog’s sometimes critical coverage. The company said on Monday that while Wenig did not authorize the harassment campaign, his “inappropriate communications” regarding the blog were among “a number of considerations leading to his departure from the company.”
Here are five of the most shocking allegations outlined by federal prosecutors:
“We are going to crush this lady”
The seemingly small blog was closely read by eBay’s top management from the CEO on down. When a member of Wenig’s executive team saw a story about Wenig’s salary in the blog last April, the person texted Wenig, “We are going to crush this lady.” A few days later, when a Wall Street Journal story annoyed Wenig, he texted back, “Fuck them. The journal is next on the list after [the blog’s author].” And a few weeks later, another story on the blog prompted Wenig to text his subordinate, “Take her down.” That prompted the executive, who is not named in the complaint, to begin looking for ways to address Wenig’s grievances. In August 2019, after another negative story, Wenig texted, “If you are ever going to take her down…now is the time.” Wenig’s subordinate passed some of the messages on to Baugh.
Inspired by Hollywood
That month, Baugh is said to have begun holding meetings with other eBay security staff to craft a response to the blog. He showed his team a clip from the 1988 movie Johnny Be Good of characters harassing their football coach by sending pizzas, an elephant, a male stripper, and an exterminator. He also showed a segments of the movie Body of Lies in which a character creates a fake terrorist plot and a bit from Old School when a character turns up at a house and declares, “I’m here for the gang bang.”
A bloody pig mask and live spiders
At Baugh’s direction, other eBay employees began the harassment campaign using prepaid debit cards purchased at a local supermarket and burner cell phones to make online orders from anonymous email accounts over virtual private networking software to hide their tracks, prosecutors said. They first sent the couple a Halloween mask featuring a bloody pig face and a book titled Grief Diaries: Surviving the Loss of a Spouse. Then came packages containing fly larvae, live spiders, and cockroaches. The eBayers also sent a package of pornography to a neighbor but with the couples’ names.
Fake swingers party
Baugh eventually dispatched Harville to lead a trip with others to Boston, the court filing said. After sending a screenshot of top executives’ complaints about the blog, he wrote to Harville, “Once you read it delete this entire thread and DONT SAVE TO YOUR PHONE or we will all get fired.”
From Boston, the campaign escalated to sending expensive late-night pizza delivery orders to the couples’ house to wake them with demands for cash. On Aug. 18 the group posted on Craigslist that the couple was hosting a party, gave their home address, and wrote, “Come knock on the door/ring the doorbell anytime of day or night. block parties will start about 10 PM but will go late. Singles/couples swingers OK.” Other fake online posts said the couple were selling all their possessions, prompting strangers to show up at the house unannounced.
Covering their tracks
Baugh and others also allegedly created a false paper trail implicating the couple in harassing eBay executives. As local police detectives began uncovering the connection between the harassment and eBay officials, Baugh sent Brian Gilbert, a former police captain in Santa Clara, Calif., who was working on eBay’s security team, to meet with the police. Gilbert lied to police, according to the complaint, claiming eBay officials had no knowledge about the harassment campaign.
As the investigation grew, drawing in the FBI and eBay’s legal department, the involved officials began hiding evidence by deleting messages and social media accounts and erasing phones used in the campaign.


fortune--2020-06-15--‘Jurassic World: Dominion’ set to become first major studio movie to resume filming in the U.K.

Jurassic World: Dominion, the third installment of the rebooted dinosaur franchise, is gearing up to resume production after coronavirus lockdown measures brought filming to a halt in March.
Cameras will start rolling again on July 6 at the U.K.’s Pinewood Studios, Universal first confirmed to Deadline. Barring any unforeseen circumstances, the film will become the first major studio production to resume filming within the U.K.
Jurassic World was four weeks into a 20-week shoot when production shut down. Preproduction work will kick off next week, with Universal implementing safety protocols that include a private medical facility, frequent COVID-19 tests, 150 hand sanitizer stations, more than 1,800 safety signs put up around Pinewood, and obligatory masks for all except actors while performing, Deadline reported. The measures are expected to cost Universal $5 million.
“Anyone with symptoms will be isolated immediately before being sent home,” a Universal production executive told the publication. “We want to make sure that we are going above and beyond the national protocols to create a safe environment. Cost isn’t our main concern now: It’s safety. We will take direction from our medical team, but we’re confident that with the staggered scheduling and zones of talent and crew, along with a system of contact tracing, we can move forward with limited delay in production.”
Stars Chris Pratt and Bryce Dallas Howard will soon return to London after spending the hiatus back in the U.S. They will undergo a two-week quarantine before coming back onto set. The cast also includes Sam Neill, Laura Dern, Jeff Goldblum, Justice Smith, and BD Wong. Colin Trevorrow, who helmed the first Jurassic World in addition to cowriting the follow-up, Jurassic World: Fallen Kingdom, is back as director.
Several other major studio films with production in the U.K. are still waiting for the green light. Among them are Warner Bros.’ The Batman and Fantastic Beasts and Where to Find Them 3 as well as Disney’s The Little Mermaid.


fortune--2020-06-15--Why economists, hedge funds, and health officials are using this startup’s data to understand the pa

Why economists, hedge funds, and health officials are using this startup’s data to understand the pandemic

In the century since the Spanish flu gripped the globe, the extent of the disease’s economic destruction remains an enigma.
Good data about the influenza of 1918 simply does not exist. The pandemic took hold as World War I barreled toward its conclusion, making the two world-shaking events nearly impossible to disentangle.
The limitations have left historical analyses wanting. “The scope of research on the economic effects of the 1918 influenza pandemic is scant at best,” said a report from the St. Louis Federal Reserve in 2007, which relied on old newspaper clippings for most of its study.
Today, as the novel coronavirus and a related business slowdown exact a huge economic toll, the situation has changed. Modern technology, like smartphones and their location-tracking, are providing unprecedented details about a pandemic’s impact, down to the ebb and flow of foot traffic at a given store.
What’s your step count?
The precision and granularity of the data collected today, from the individual consumer to countrywide, is unmatched by any other point in human history. It’s as though the entire economy now wears a Fitbit at all times.
Chart showing foot traffic patterns across various industries in the U.S. “Normal” behavior is represented by “1” on the y-axis. (Courtesy of SafeGraph)
In mid-March, brick-and-mortar businesses lost the majority of their shoppers. Through April, foot traffic nationally fell 80% at bars, 70% at restaurants and hotels, and nearly 60% at cafés, according to SafeGraph, a startup that collates geolocation data collected from apps on 45 million devices in the U.S.
Some industries weathered the downturn better than others; a couple even received a boost, at least initially. In mid-March, activity at general merchandise stores leaped 30% and 40% at supermarkets, as people stockpiled supplies, according to SafeGraph’s data.
The comeback has already begun. By May, foot traffic at supermarkets and general merchandise stores had ticked back up to normal levels.
Other industries are recovering too. By June, counter-service restaurants were almost back to normal, operating at 95% of usual capacity. By that time, bars were seeing 60% of their usual customer inflows, sit-down restaurants were receiving 70%, and cafés 80%.
The recovery for other industries looks grimmer. Airports had only a quarter of their usual visitors, while attendance at movie theaters remained sparse at a fifth of normal activity.
Voting with your feet
“We predict the past,” says Auren Hoffman, SafeGraph’s cofounder and CEO, during a recent online presentation.
The company provides customers and research partners with data about what has happened, in other words, and leaves the analysis up to the others. “We let customers predict the future,” he says.
Chart showing foot traffic patterns across a selection of retail brands in the U.S. (Courtesy of SafeGraph)
On its publicly available dashboard of movement patterns, SafeGraph shows that, during the pandemic, some businesses bucked generally dismal trends.
Foot traffic at home improvement giant Home Depot surged as much as 60% between mid-March and the end of May, perhaps as homebound consumers began redecoration projects. After initially falling 40% between mid-March and mid-April, foot traffic at Target recovered more than 60% through mid-May.
Other businesses face more persistent drop-offs. Foot traffic to Starbucks stores fell by half between mid-March and mid-April, and fewer people—only three-quarters of the usual clientele—appear to be lingering there today for macchiatos and lattes.
McDonald’s, on the other hand, appeared to be all but back to normal as of the end of May.
Location, location, location
SafeGraph says it buys its geolocation information from well-known consumer apps involving health, safety, navigation, and transportation. The resulting data sets are anonymized and aggregated to protect people’s privacy, says Nick Singh, the company’s marketing lead.
While Singh declines to disclose the exact sources of SafeGraph’s data, he claims the company does not use sketchy sources that hoover up information without people’s knowledge. The origins are, generally, well-known apps that users have granted permission to monitor their whereabouts.
Privacy advocates will find such pervasive tracking troubling, of course. Many people do not realize how far and wide their geolocation travels as it changes hands through little-regulated marketplaces. Experts may call into question the ability of data scientists to fully anonymize their data sets too.
SafeGraph’s customers include hedge funds, which use the data to inform their investments, and hotels and other chains, which use them to determine where to open new retail locations. Of the 11,000 U.S. hedge funds, there are “probably only 50 hedge funds that buy alternative data” of the sort SafeGraph sells, CEO Hoffman says, but he believes more businesses will become customers as they build up internal data science expertise and as better data-crunching tools become available.
SafeGraph provides data to academic researchers, policymakers, and journalists too. The Centers for Disease Control and Prevention used the data to determine the efficacy of stay-at-home orders. And the Brookings Institution, a Washington, D.C., think tank, used the data to show social distancing differences within black and white neighborhoods.
While even Hoffman admits his company’s data is imperfect—cleaning up raw data is a science all in itself—the information is better than anything researchers had access to in the past. “Every day the data is improving from the day before,” Hoffman says.
Feeding the Fed
In the depths of the pandemic, the Federal Reserve of Dallas acknowledged that the delays associated with gathering usual economic data, which tend to be published quarterly, “are crippling.” It cited “an acute need for real-time measurement” to scrutinize the wreckage of—and hoped for rebound from—COVID-19.
The Dallas Fed has been using SafeGraph’s data in its own economic modeling and forecasting. The resulting charts constitute “a key metric in forming our assessment of economic conditions and the outlook for future activity,” it says.
Since May the central bank branch has been publishing a continuously updated “mobility and engagement index,” which measures how much people are moving around. The gradual easing of government-mandated restrictions and the onset of summer shows how behavior is slowly but surely beginning to return to normal.
It’s a far cry from using century-old periodical archives.