WEBVTT - Boxed's Huang on Amex Investment, Competing With AMZN (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleven, Rio to Washington,

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<v Speaker 1>d C, Bloomberg to Boston, Bloomberg twelve, under It to

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<v Speaker 1>San Francisco, Bloomberg to the Country zoois XAM General one

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<v Speaker 1>nine and around the globe the Bloomberg Radio Plus Athen

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<v Speaker 1>Bloomberg dot Gone. This is taking Stock. I'm Catheene Hayes,

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<v Speaker 1>my co host Pim Foxes out of the office this afternoon.

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<v Speaker 1>Look out Costco, look out Sam's Club. Here comes box

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<v Speaker 1>the wholesale experience for those without the time means or

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<v Speaker 1>patients for a brick and mortar warehouse club trip. We're

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<v Speaker 1>gonna be speaking to the CEO of Boxed about his

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<v Speaker 1>business model, just how big he expects to get and

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<v Speaker 1>something very special he's doing for employees who are in love.

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<v Speaker 1>You know who I love Charlie Pellett. He's in the

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<v Speaker 1>newsroom now and he's got a bloom big business flash.

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<v Speaker 1>We are looking at an up date for stocks or

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<v Speaker 1>with the DAL the SMP and NASDAC all hired. Thank you,

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<v Speaker 1>Kathleen Hayes. Stocks rebounding from a morning sell off, we

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<v Speaker 1>are now at the best level of the afternoon holding

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<v Speaker 1>near a six week high. Treasuries are advancing as investors

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<v Speaker 1>away tomorrow's jobs data for clues about the timing of

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<v Speaker 1>the Federal reserves next policy move Right now, the tenure

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<v Speaker 1>up eight thirty seconds, the yield there one point eight percent.

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<v Speaker 1>FED Governor Daniel Torulo says eight of the largest American

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<v Speaker 1>banks will have to meet stricter capital minimums in their

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<v Speaker 1>annual Federal Reserve stress tests, while regional lenders will get

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<v Speaker 1>some relief. He was interviewed this morning on Bloomberg Television.

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<v Speaker 1>We need to have those eight most systemically important institutions

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<v Speaker 1>more resilient than other banks in the economy. You know,

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<v Speaker 1>you can have a you can have a smaller bank

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<v Speaker 1>fail and the economy can absorb that. But with the

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<v Speaker 1>largest institutions, obviously there's much more of a systemic risk,

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<v Speaker 1>and we need to achieve that in a post stress

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<v Speaker 1>environment as well as in a pre stress environment. Mario

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<v Speaker 1>drag has unveiled largely unchanged inflation forecast for the Eurozone,

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<v Speaker 1>even as its latest stimulus measures start to take effect.

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<v Speaker 1>He's also calling on governments to play a bigger role

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<v Speaker 1>in cementing the region's pick up. The European Central Bank

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<v Speaker 1>presidents spoke with reporters today in Vienna. Also in Vienna

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<v Speaker 1>today we had that OPEC meeting. Crude oil up now

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<v Speaker 1>by four cents forty nine oh five for a barrel

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<v Speaker 1>of West Texas Intermediate, up by point one percent, Bran

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<v Speaker 1>Crew seven up three tenths of one percent. Natural gas

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<v Speaker 1>also advancing up seven tenths of one percent. Gold to

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<v Speaker 1>out a dollar thirty the ounce to twelve thirteen, a

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<v Speaker 1>drop of point one percent, and a three thirty two

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<v Speaker 1>on Wall Street. Now, let's take a look at other

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<v Speaker 1>news from around the world. Thank you Charlie from the

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<v Speaker 1>Bloomberg newsrou My Rami in essentio. This news update is

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<v Speaker 1>brought to you by the Jeep Grand Cherokee, the most

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<v Speaker 1>awarded sub ever. The Grand Cherokee continues to raise the

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<v Speaker 1>bar with its luxurious interior and legendary four by four capability.

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<v Speaker 1>Try when at your local Jeep dealer today. Some progress

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<v Speaker 1>is being reported in the war against terrorism. The State

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<v Speaker 1>Department's Acting Coordinator for counter Terrorism, Justin Siberal, announced today

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<v Speaker 1>the Department's annual report on Terrorism finds a decline in attacks. However,

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<v Speaker 1>the report also warns Islamic State expanded its reach, and

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<v Speaker 1>Iran remains a leading state sponsor of terrorism. Total number

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<v Speaker 1>of terrorist attacks in decreased by percent when compared to

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<v Speaker 1>total fatalities due to terrorist attacks decreased by fourteen percent,

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<v Speaker 1>principally as a result of fewer attacks and deaths in Iraq, Pakistan,

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<v Speaker 1>and Nigeria. The aid who handled Hillary Clinton's private email

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<v Speaker 1>server while she was Secretary of State will not testify

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<v Speaker 1>in an email related lawsuit. Brian Pagliano will refuse to

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<v Speaker 1>testify in a lawsuit brought by the conservative watchdog group

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<v Speaker 1>Judicial Watch. The deposition is on Monday, just one day

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<v Speaker 1>before California's primary rivers in Europe have burst their banks

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<v Speaker 1>from Paris to the southern German state of Bavaria, killing

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<v Speaker 1>six people, trapping thousands more in homes or cars, and

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<v Speaker 1>forcing everything from subway lines to castles to shut down.

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<v Speaker 1>The Louver in Paris will close Fridays as staff can

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<v Speaker 1>move works of our from areas that are at risk

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<v Speaker 1>of high waters. And the New York City Fire School

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<v Speaker 1>is being renamed after a firefighter who was killed in

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<v Speaker 1>the September eleventh terror attacks. Captain Vernon Richard died in

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<v Speaker 1>the South Tower along with five other members of his company,

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<v Speaker 1>Global News twenty four hours a day, powered by our

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<v Speaker 1>journalists in more than one fifty news bureaus around the world.

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<v Speaker 1>From the Bloomberg News Room, I'm Rainy in essentio Charlie,

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<v Speaker 1>and we thank you and just getting this headline to

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<v Speaker 1>pass along the Air Force as a thunderbird jet has

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<v Speaker 1>crashed after a flyover of the Academy Air Force Academy

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<v Speaker 1>commencement attended by President Obama. We are brought to you

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<v Speaker 1>by Pershing's Inside, the must attend event for advisers less

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<v Speaker 1>you haven't registered, you still can visit Inside dot com.

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<v Speaker 1>That's I N S I T E dot Com. I'm

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<v Speaker 1>Charlie Pellock. That's a bloom Bird business slash. You're listening

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<v Speaker 1>to taking Stock with Kathleen Hayes and Pim Fox on

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<v Speaker 1>Bloomberg Radio. Do you get tired of driving out to

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<v Speaker 1>a place like Costco or Sam's Club to stock up

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<v Speaker 1>on big, bulky items like well, paper towels. I go

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<v Speaker 1>through a lot of paper towels. Would you like it

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<v Speaker 1>if you could just, you know, go online and order

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<v Speaker 1>those and have them come to your house for free. Well,

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<v Speaker 1>that is the business model for Boxed Boxed Wholesale, and

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<v Speaker 1>they're doing quite well, growing very rapidly. In fact, they've

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<v Speaker 1>raised a hundred and fifty million dollars in funding to date.

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<v Speaker 1>And imagine that just a couple of years ago, the

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<v Speaker 1>founder and CEO was in his garage in Edison, New Jersey,

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<v Speaker 1>just getting it off the ground. And that's Shay Wong.

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<v Speaker 1>He is uh with me in our New York studio. Now,

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<v Speaker 1>thank you very much for having me and and everything

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<v Speaker 1>you just said. Literally that was the problem that we

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<v Speaker 1>had in my family. And so that's what I want

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<v Speaker 1>to do and solve the problem for myself and luckily

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<v Speaker 1>a lot of Americans around the country have the same problem.

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<v Speaker 1>So there you were tell us about that. You you

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<v Speaker 1>were saying, gosh, I I mean, I actually kind of

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<v Speaker 1>like going to place like Costco Sam's Club sometimes you

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<v Speaker 1>walk around and you know, but I know a lot

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<v Speaker 1>of people find it tedious. Yeah, I mean, you know,

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<v Speaker 1>it really is for some of the folks that literally

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<v Speaker 1>don't have the physical means too. So you figure folks

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<v Speaker 1>that live in urban areas without a car, or if

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<v Speaker 1>you're later on in life and you just can't get

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<v Speaker 1>out of the house anymore. And so that's an audience

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<v Speaker 1>for us. Also, people in the suburbs, you find that

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<v Speaker 1>they don't have the time or the patients to go. Yeah,

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<v Speaker 1>they have a car and they live in Texas, they

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<v Speaker 1>can get to a Sam's Club, but they just don't

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<v Speaker 1>have the time and patience with three kids to go

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<v Speaker 1>in store. So did you ever think to yourself, oh, gosh,

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<v Speaker 1>there's already Amazon, and then there's Jet you know, another

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<v Speaker 1>East Coast competitor of Amazon to a certain extent, What

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<v Speaker 1>made you think you get boxed off the ground? I thought, um, one,

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<v Speaker 1>that that because it was solving a problem that I

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<v Speaker 1>had that I looked around at what were my options

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<v Speaker 1>as a consumed were and none of them were, like

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<v Speaker 1>my kind of needs weren't exactly met, and so I

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<v Speaker 1>thought there was there was definitely an opportunity there. But

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<v Speaker 1>more so we knew from a business perspective we had

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<v Speaker 1>to go with a different model. And so for us, UM,

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<v Speaker 1>we don't have everything. We're very clear with the consumer

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<v Speaker 1>that we're not going to be the everything store, but

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<v Speaker 1>we have a thousand items large format only, and you

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<v Speaker 1>get to discover a few interesting items as well. So

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<v Speaker 1>what else besides toilet paper and paper towels, which to

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<v Speaker 1>me are obviously the fill the car very fast? You figure, laundry, detergent,

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<v Speaker 1>water does really well, beverages, chips, snacks, and right now

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<v Speaker 1>about fifty percent of our businesses foods, household so everything

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<v Speaker 1>to fill your pantry. Basically, so you ship for free?

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<v Speaker 1>Are you making money shipping for free? Yeah? So the

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<v Speaker 1>beauty of it is that our average consumer, our consumer

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<v Speaker 1>on average orders about ten items. And so as you know,

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<v Speaker 1>if you think about the variable costs online, um, once

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<v Speaker 1>you get to a certain part, like once you get

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<v Speaker 1>to a certain items per per order count, the variable

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<v Speaker 1>costs of shipping that box actually flatlines. And so if

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<v Speaker 1>you're adding ten items per card, then you're actually making

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<v Speaker 1>margin on it. Now you you're one of your most

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<v Speaker 1>recent big, high profile investments, and a very powerful one

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<v Speaker 1>is American Express and they had the card relationship with Costco,

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<v Speaker 1>which Costco ended. So now American Express Ventures announced to one, Well,

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<v Speaker 1>you did a hundred you did a big, big round

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<v Speaker 1>of funding with them. How much was it? Yeah, so

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<v Speaker 1>our last round was a hundred million dollars and then

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<v Speaker 1>m X closed just recently as well. So what does

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<v Speaker 1>that entail? What is that? What did it cost you

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<v Speaker 1>to do that? And what is it? What is the benefit?

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<v Speaker 1>What are you getting out of it? It cost me.

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<v Speaker 1>Luckily they were very good to work with so it

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<v Speaker 1>wasn't like we had to they ground us away in

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<v Speaker 1>a in a long drawn out negotiations, So it didn't

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<v Speaker 1>cost us a lot um. But in terms of working

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<v Speaker 1>together and what we think about, you know, how we

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<v Speaker 1>think about jointly driving our businesses going forward. And so

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<v Speaker 1>they obviously have wholesale customers where you know, now UM

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<v Speaker 1>American Express charting JU nineteenth I think will not be

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<v Speaker 1>accepted in store. And so if you if your card

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<v Speaker 1>is not accepted in store and you don't have any

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<v Speaker 1>alternative next to you, you literally cannot use that card anymore.

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<v Speaker 1>But more so than that, I think we're working on

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<v Speaker 1>initiatives for the future. So for example, UM now UH

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<v Speaker 1>our customers don't need or they can check in or

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<v Speaker 1>or check out with just their American Express credentials for example,

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<v Speaker 1>they're logg in UM. But a lot more coming coming

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<v Speaker 1>UH in the future. Well, you have to talk about

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<v Speaker 1>your your your your your program you have for employees

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<v Speaker 1>where you pay for weddings. So I wanted to spell minuts.

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<v Speaker 1>It's not like we sit around and just think, okay,

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<v Speaker 1>what what else can we pay for? You know, I think, Um,

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<v Speaker 1>what I found was that, Um, you know, coming from

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<v Speaker 1>a technology background, UM, you deal with engineers, you deal

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<v Speaker 1>with like just office folks all the time, where especially

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<v Speaker 1>in Silicon Valley, if you're making less than a k,

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<v Speaker 1>it seems like you're slimming it right like. But now

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<v Speaker 1>we have fulfilming centers, Now we have a physical part

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<v Speaker 1>of our business. It introduced us to a whole another

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<v Speaker 1>kind of world, at least you know, when I grew up,

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<v Speaker 1>I grew up poor. It reintroduced me to to another world.

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<v Speaker 1>And so for us, we had a very specific problem

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<v Speaker 1>in one of our fulfillment centers. One of our stalwart

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<v Speaker 1>packers actually cried on the floor during work and we

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<v Speaker 1>asked him. I called him later that night asked, hey,

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<v Speaker 1>I heard this was happening. UM, what's going on? And

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<v Speaker 1>so ended up that Um, he was paying his mother's

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<v Speaker 1>medical bills uh, and wanted to pay for his wedding

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<v Speaker 1>at the same time and so that his mother could

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<v Speaker 1>go in time. UM, And that the match just wasn't

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<v Speaker 1>working out, even though he's working seven days a week

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<v Speaker 1>and two jobs. And so I just felt like, at

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<v Speaker 1>least I can't control what happens in outside of our

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<v Speaker 1>our walls, but at least in a company that I run, um,

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<v Speaker 1>I want to be able to fix the things that

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<v Speaker 1>are wrong. And you paid for sw wedding, and now

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<v Speaker 1>you pay for all employees weddings. Right, Yeah, so I

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<v Speaker 1>think you're a courage A lot of people get married.

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<v Speaker 1>It is well, one one thing I'll add it. It's

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<v Speaker 1>just it just really is the the the employer employee

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<v Speaker 1>relationship and so and I know that's a big, big

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<v Speaker 1>thing for you, for you. Chay Long, CEO, co founder

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<v Speaker 1>Boxed Wholesale. Check it out. This is taking stock on

0:10:57.600 --> 0:11:03.880
<v Speaker 1>Bloomberg Radio. The e c B meant of the e

0:11:04.000 --> 0:11:06.160
<v Speaker 1>c B is going to stop buying corporate bonds. But

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<v Speaker 1>there's a lot of doubt about how much any of

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<v Speaker 1>this is really going to stimulate an economy where inflation

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<v Speaker 1>still is not rising enough. That's coming up now on

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<v Speaker 1>Bloomberg Radio.