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    Why Amazon Marketplace didn’t survive in China

    China’s e-commerce market was valued at $2 trillion in 2022, according to GlobalData, and the country also has a rapidly growing middle class, making it an attractive market for American companies.
    Amazon entered the China market in 2004 through a $75 million acquisition of Joyo.com, an online book and media seller. The joint venture rebranded to Amazon China at the domain Amazon.cn in 2011.

    E-commerce giants Alibaba Group and JD.com, which both own and operate some of the largest and most trusted business-to-consumer e-commerce sites in the country, proved to be formidable competitors who were able to overpower Amazon in China. Among other reasons, both companies’ shopping, payment and delivery systems proved to be more attuned to the tastes of Chinese consumers.
    In its earlier years, Amazon pushed its e-reader and tablet product offerings, but China’s complex regulatory approval process delayed their debut, which also hampered growth the U.S. e-commerce giant.
    Between 2011 and 2012, Amazon’s market share hovered at approximately 15%, but it later plunged to less than 1% by 2019, according to iResearch. Amazon officially closed its China online marketplace in July 2019.

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    Sandwich chain Subway’s sales climb as turnaround takes hold ahead of potential sale

    Subway’s same-store sales rose 9.2% in 2022, a sign that its turnaround is taking hold.
    The trend reverses years of sales declines for the once-ubiquitous sandwich chain.
    The privately owned company has reportedly hired advisors to explore a potential sale and is revamping restaurants.

    An employee halves a Subway sandwich at a Subway restaurant on January 12, 2023 in Austin, Texas.
    Brandon Bell | Getty Images

    Subway said its same-store sales climbed 9.2% in 2022, signaling the sandwich chain’s turnaround is taking hold as it reportedly explores a sale.
    The company is not required to disclose its financial results because it’s privately owned. However, Subway has recently shared periodic sales updates as it has undertaken a turnaround. Those announcements could entice potential buyers to step forward.

    The Wall Street Journal reported in January that Subway hired advisors to explore a sale that could value the chain at more than $10 billion. In a statement to CNBC, Subway said it doesn’t comment on ownership structure and business plans because it’s a privately held company.
    CEO John Chidsey said in a statement Thursday that the chain has set two years of record sales and is “getting its swagger back.” Subway has seen eight consecutive quarters of sales growth, and digital sales have more than tripled since 2019, the company said in a release. Its North American locations’ same-store sales jumped 7.8% in 2022, breaking decade-old average weekly sales records, according to Subway.
    The trend reverses years of sales declines for the once-ubiquitous sandwich chain, which was at one time the largest U.S. restaurant company by number of locations. Its U.S. footprint fell to 21,147 outlets in 2021, down 22% from its peak of 27,103 in 2015, according to franchise disclosure documents.

    Submarining sales

    Even before the death of co-founder Fred DeLuca and the high-profile trial of former spokesman Jared Fogle, both in 2015, Subway struggled to keep up with new fast-casual competitors like Chipotle and cannibalized its own sales by opening too many locations. As sales slid, ugly fights with franchisees played out in courts and splashed across headlines.
    Chidsey took the reins in late 2019, becoming the first permanent leader of Subway who wasn’t related to a founder. In the summer of 2021, the chain announced it was overhauling its menu, upgrading its ingredients and boosting ad spending to lure back customers.

    Its attempted comeback coincides with a tough environment for the broader restaurant industry. After the lifting of pandemic lockdowns, eateries have had to cope with a shortage of willing workers, supply chain snarls and climbing ingredient costs. Many have raised prices in response.
    Subway didn’t disclose Thursday how much price hikes have contributed to its recent sales growth but told CNBC that its price increases are “in line with” those by other fast-food chains.
    Looking ahead to 2023, Subway plans to improve franchisee profitability and remodel 3,600 North American locations. Outside of its home market, the company has commitments from master franchisees to open 5,300 new locations.
    The company will also soon be half-owned by a charity — on Tuesday, Subway co-founder Peter Buck’s foundation announced that he left his 50% ownership of the sandwich chain to the organization. Buck died in November 2021.
    It’s unclear whether that will have an impact on a potential sale.

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    Not a fan of cruising? The hack that could change your mind

    Canadian Tammy Cecco wasn’t a fan of cruising.
    “The thought of being on a ship with thousands of other people and not being able to get off,” she said, “was something that I wanted to avoid.”

    That didn’t change when Cecco, a travel magazine publisher, boarded a surprise cruise booked by her husband to renew their vows in front of family and friends.
    “When I got on … I thought ‘Oh my god, what am I doing here?'” she said. “I’m not the type of person who likes to be herded at all.”
    She said she imagined “a little tiny cabin and no window.” Yet she found that some cruise ships have spacious suites with floor-to-ceiling windows. Plus, floors with fewer cabins give the feeling of a “boutique” travel experience, she said.

    Travel professional Tammy Cecco named the Celebrity Edge cruise ship, shown here, as one that has spacious suites and great window views.
    Eva Marie Uzcategui | Bloomberg | Getty Images

    Once she “relaxed into it,” Cecco said, she started to enjoy cruise ship travel.
    “Cruising has really evolved,” she said. “There’s something for everyone now.”

    A strategy on the shore

    Cecco also found a way to enjoy “private, personalized” experiences on shore. she said.
    She booked private excursions, instead of cruise-organized one, on her last two cruise vacations — one to Russia and Scandinavia and the other to Southern Europe, she said.

    Tammy Cecco and her family, plus her guide, Josep, in front of Barcelona’s La Sagrada Familia. “When you’re going with a big busload of people, it’s difficult to dig very deep into the city,” she said.
    Courtesy of Tammy Cecco

    Cecco, who often travels with her family of five and her mother-in-law, said private tours suit everyone’s needs — and interests.
    “There were six of us, and we wanted a private tour because often the kids are not interested in these big, long tours,” she said. “When you do book an excursion with a cruise line or with an organized tour, typically you’re going with a bunch of other people, and you have to go along with their itinerary.”

    More people are returning to cruising in 2023, but even more than that, more people are seeking out private experiences.

    Luciano Bullorsky
    ToursByLocals’ President and Co-owner

    Cecco said she booked a private tour at “pretty much every stop” on their last cruise, plus Rome.
    “We had one day that we wanted to do the Colosseum as well as the Vatican, and each of those could be a full day tour on their own,” she said. “I asked the tour guide if he could give us the best of both in one single day, and he managed to combine the two of them expertly.”

    Private shore excursions on the rise

    Cecco booked guides through ToursByLocals, a Canada-based travel company that operates in 188 countries, according to its website.
    The company said private shore tours account for nearly a third of all tours booked in 2023 — up from 12% in 2022 bookings.
    “More people are returning to cruising in 2023, but even more than that, more people are seeking out private experiences when they do return to sea,” said Luciano Bullorsky, the company’s president and co-owner.
    He said people want the ability to use private transportation, interact with a local guide and reach the sites “before the busloads of tourists arrive.” Plus, they can go places buses can’t go, such as smaller restaurants, boutique wineries, even a “family-run sled dog ranch,” he said.

    Giuseppe D’Angelo (center) shown here with travelers in front of the Victor Emmanuel II National Monument in Rome.
    Courtesy of Giuseppe D’Angelo

    Bullorsky said most private excursion bookings are in Europe, especially along the Mediterranean. But, he said, Alaska and Puerto Rico are also popular.
    Top bookings include “Best of Ephesus” in Turkey, full-day tours of Santorini and Athens, an island tour of Bermuda and a coastal trip to Peggy’s Cove in Nova Scotia with a guide who has a Ph.D. in Canadian history.
    Giuseppe D’Angelo runs a popular tour of Rome, but he also takes travelers to explore Pompeii, the Amalfi Coast and other parts of Italy’s Campania region, including “11 of the 53 UNESCO sites” in Italy, he said.
    “I am able to create itineraries and routes, including sites and attractions, which are unique, and not followed by crowds of large cruise excursions,” he said. “Sometimes, cruisers will send me a list of very popular spots including Pompeii, Mount Vesuvius or the Sistine Chapel … In those cases, I will arrange for them the best sequence of visits in order see each place when they are less congested.”
    He said many clients ask for restaurant recommendations “with the best food and no tourists,” he said.
    On top of that, ToursByLocals CEO and co-founder Paul Melhus said the company guarantees travelers will be returned to the ship on time — or the company pays overnight hotel costs plus transportation fees to the ship’s next destination.

    How much private excursions cost

    Cruisers can expect to pay around $100 per person for cruise-organized excursions, according to the financial website Money We Have.
    Cecco paid about $600 for each of her privately organized full-day tours, which included entrance fees and private transportation for six people.
    She said for what they did, she “definitely” saved money as well as time, because private tours move more quickly between locations. Plus, she said she got an insider’s perspective and that often elusive “authentic” experience that many travelers seek.  
    She said in Sicily, she ate in bakeries tucked away in small villages. In Santorini, she snapped photographs without hordes of tourists in the background.
    As for whether private shore excursions would make her more likely to cruise in the future: “Most definitely,” she said. More

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    Fanatics to start livestreamed shopping of trading cards, collectibles

    Nick Bell, previously Snap’s global head of content and partnerships, will lead Fanatics’ new trading cards livestreamed shopping business.
    Livestreamed shopping is growing in the U.S. thanks to efforts from retailers like Amazon, eBay and Walmart, but still pales in popularity compared to Asia.
    The sports platform company, which recently raised $700 million at a valuation of $31 billion, is launching Fanatics Live later this year.

    New York, NY. – December 7th. Portrait for a profile on Fanatics founder & CEO Michael Rubin at his office in downtown NYC.
    The Washington Post | Getty Images

    Fanatics is moving into livestreamed shopping around collectibles and trading cards, hiring a former Snap and Alphabet executive to launch its new business later this year.
    Nick Bell, who previously led teams responsible for Google Search experience and was Snap’s global head of content and partnerships, will serve as the CEO of Fanatics Live, a new business division for the sports platform company.

    Fanatics Live, which will have a standalone app and a coinciding website, plans to launch in the second half of 2023. The aim is to create a digital customer shopping experience where you can buy trading cards and other collectibles via curated and personality-driven content and entertainment. Fanatics will receive a percentage of each transaction.
    “All collectors are fans, but not all fans are collectors,” said Bell, who will be based in Los Angeles and report to Fanatics Collectibles CEO Mike Mahan. “We have a big opportunity to really grow the hobby by bringing in people who wouldn’t necessarily classify themselves as a collector today and open them up to this hobby by the way of entertainment and a community where they can hang around like-minded people.”

    Nick Bell, then of Snap speaks onstage last January in Pasadena, California.
    Frederick M. Brown | Getty Images

    Bell said one area of early focus will be around “breaking,” a form of social trading card buying that is growing in popularity. Similar to a blind raffle, a set number of individuals purchase an entry from a seller — called a “spot” — and the seller then opens an entire case of trading cards live online and allocates each of them.
    “This is not just about taking a product and selling it; it’s about creating this really entertaining format and experience,” Bell said.
    Livestream shopping has been growing in popularity in the U.S., aided by the pandemic-fueled rise in online commerce as well as brands and retailers looking to connect with shoppers at home on their phones and computers. Nordstrom, Petco, and Macy’s-owned Bloomingdale’s are just some of the retailers that have experimented with livestreamed sales.

    Walmart, Amazon, eBay, TikTok already in the livestream e-commerce market
    Walmart hosts a livestreamed shopping experience called Walmart Live, where recent events centered on Valentine’s Day picks, New Years resolutions and fitness-related items. Amazon has its own live shoppable videos, where individual creators can host videos promoting products. Ebay has its Live platform where sellers can livestream auctions and promote other online sales.
    TikTok made its shopping feature available to select U.S. businesses this fall after previously partnering with Shopify to allow users to shop in-app. YouTube partnered with Shopify in July to allow video creators to feature products across their channels and content. Meta shut down the live shopping feature on Facebook in October, but still has a similar functionality on Instagram.
    In the U.S., the livestreaming e-commerce market is expected to grow to an estimated $32 billion this year, according to consumer market research group Coresight Research. That is up from $6 billion in 2020.
    But there have been some hiccups as the modern version of QVC has not taken off as much as it has in Asia. Douyin, the Chinese sister app to TikTok, reported that it generated $119 billion worth of product sales via live broadcasts in 2021, and sales have more than tripled year-over-year.
    Only 31% of U.S. adults have even heard of live shopping, with just 22% saying they’ve participated in a live shopping event, according to a December poll by Morning Consult.
    Bell said that while livestreaming and social commerce “hasn’t taken off yet” in the U.S., “it’s just inevitable that it is going to happen.”
    “There’s a lot of development to do around the format – shopping should become a byproduct of entertainment rather than how I think a lot of folks have been thinking about it, which is more akin to how we would think about QVC where it’s just about the shopping,” Bell said. “I think we’re moving to a slightly different world where it’s actually about the content and the community, and the shopping is the byproduct.”

    Leveraging Topps brand in latest sports venture

    For Fanatics, there is a big opportunity to establish itself as the hub for the trading card industry that is projected to reach $98.7 billion by 2027, according to Verified Market Research
    Other companies are also looking to do the same, as well as develop an online marketplace around trading cards. Ebay, which said it saw trading card sales increase 142% in 2020, acquired trading card marketplace TCGPlayer for $295 million in August. Goldin, which was acquired by an investment group led by hedge fund billionaire Steve Cohen in July 2021, launched an online card marketplace last month.
    But Fanatics effort will be aided by its acquisition of Topps trading cards for roughly $500 million last January. Topps holds MLB’s trading cards rights, as well as rights for MLS, UEFA, Bundesliga and Formula 1. Fanatics also had previously struck deals to exclusively produce NFL and NBA cards starting in 2026.
    “This hobby has so many people in the middle of it and perfectly set up to have an integrated direct-to-consumer experience,” Fanatics founder and CEO Michael Rubin said at the time of the Topps acquisition.
    Bell said the collection of card rights and the connection to Topps is a “huge strategic advantage.” While Fanatics Live could move into other forms of entertainment and collectibles over time, it will solely focus on trading cards initially.
    The deeper push into collectibles is the latest effort from Fanatics to become a one-stop shop for sports fans. Initially started as an e-commerce company selling sports merchandise, the company has evolved to hold the apparel rights to nearly every sports property with a database of more than 94 million fans.
    The company is also circling the sports betting market, looking to take on operators like Flutter-owned FanDuel, DraftKings, Caesars and BetMGM, which is co-owned by MGM Resorts
    Fanatics opened its first sportsbook last month at FedEx Field, the home of the NFL’s Washington Commanders, and was in discussions to acquire BetParx sportsbook, according to previous CNBC reporting.
    Last year, Rubin sold his 10% stake in Harris Blitzer Sports Entertainment, the owner of the Philadelphia 76ers and New Jersey Devils, allowing Fanatics to enter the gambling space. NBA rules prohibit team owners from operating a gambling platform.
    Fanatics raised $700 million in December to bring its valuation to $31 billion, capital that it planned to use on potential merger and acquisition opportunities across its collectibles, betting and gaming businesses, according to CNBC.
    The company estimates its revenue for Fanatics, including its Lids segment, will be approximately $8 billion in 2023.
    Fanatics is a three-time CNBC Disruptor 50 company, and ranked No. 21 in 2022.

    CNBC is now accepting nominations for the 2023 Disruptor 50 list – our 11th annual look at the most innovative venture-backed companies. Learn more about eligibility and how to submit an application by Friday, Feb. 17. More

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    ‘Greenwashing’ is a good thing, according to one renewable energy tycoon

    The debate surrounding greenwashing has become increasingly fierce in recent years.
    The charge is often leveled at multinational companies with vast resources and significant carbon footprints.
    “It’s everywhere,” Ecotricity founder Dale Vince tells CNBC. “But you know, I take it as a good thing.”

    Greenwashing should be seen as a positive sign that companies are moving in the right direction, according to the founder of British energy firm Ecotricity.
    “It’s everywhere,” Dale Vince told CNBC’s Tania Bryer in a recent interview. “But you know, I take it as a good thing. People say to me, ‘oh, there’s greenwashing, it’s a bad thing’.”

    “And I say, do you know what, it’s not a bad thing because 10 years ago, these companies that are greenwashing today, didn’t care, right?”
    “Now they care. They see that they have to do something and so they greenwash. I say that’s progress. I’ve seen it before and it’s not far from them greenwashing to then doing something real.”
    Vince’s comments will undoubtedly raise eyebrows in some quarters.
    The debate surrounding greenwashing has become increasingly fierce in recent years. The charge is often leveled at multinational companies with vast resources and significant carbon footprints.
    It’s a term that environmental organization Greenpeace UK calls a “PR tactic that’s used to make a company or product appear environmentally friendly without meaningfully reducing its environmental impact.”

    Read more about energy from CNBC Pro

    Founded by Vince in 1995, Ecotricity is headquartered in Gloucestershire, England, and calls itself “Britain’s greenest energy company.”
    The firm says its electricity is “100% green” and describes its gas as being “a mix of carbon-neutralised natural gas and sustainable green gas.”
    During his interview with CNBC, Vince — who is also the chairman of English soccer club Forest Green Rovers — spoke about the need to develop a variety of sources for a net-zero future.
    “We have to get to a combination of wind, solar, I think tidal lagoons have a big role to play,” he said, before going on to also highlight the importance of battery storage.
    “For gas … we can make that from grass, we’re building our first project right now that will plug into the grid in February.”

    According to Ecotricity, its £11 million (around $13.5 million) “green gas mill” is to be “fed by herbal lays — a mix of grass and herbs, sown and grown on farmland next to the plant.”
    The company adds that such facilities “do not require agricultural land and do not compete with food production.”
    Vince also spoke about the need to act now to ensure a more sustainable future.
    “I think we could be green energy independent in our country within about 10 years if we just got on with it,” he said.
    “We have all of the means, it’s economic to do it. It’s actually less economic not to do it.” More

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    Cramer’s lightning round: I want to own Sherwin-Williams

    Monday – Friday, 6:00 – 7:00 PM ET

    It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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    Sherwin-Williams Co: “I want to own it. I’ll tell you why. Everything that they could possibly say negative about it is out there. I want to come out with a more positive thesis.”

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    XPO Inc: “Let’s wait for it to come down a little.”

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    Upstart Holdings Inc: “Right now, this is a coiled spring, even though it’s not doing well. … That’s not my style.”

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    SoFi Technologies Inc: “It was a good quarter, and it’s going higher.”

    Disclaimer: Cramer’s Charitable Trust owns shares of Wells Fargo.

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    Jim Cramer says investors need to have conviction and take advantage of ‘mistaken selling’

    Monday – Friday, 6:00 – 7:00 PM ET

    CNBC’s Jim Cramer advised investors to block out the market bears, and use their missteps to bolster their own portfolios.
    Stocks rose on Wednesday after Federal Reserve Chair Jerome Powell said in a press conference following the central bank’s February meeting that inflation has started to cool down.

    CNBC’s Jim Cramer on Wednesday advised investors to block out the market bears, and use their missteps to bolster their own portfolios.
    “Their mistaken selling creates opportunities for you to buy the dips. You need to have conviction that the sellers are wrong and you’re right. You need to believe in your view, not the view the tape gives you — that the bears give you,” he said.

    Stocks rose on Wednesday after Federal Reserve Chair Jerome Powell said in a press conference following the central bank’s February meeting that inflation has started to cool down, though he didn’t indicate that a pause in rate hikes would come anytime soon.
    The market’s gains reversed earlier declines that came on the back of a quarter-point rate hike. Cramer said that while the selling would have made sense last year, when inflation was still skyrocketing and the central bank was aggressively raising rates, a bearish approach to trading doesn’t work anymore.
    “It no longer makes sense once the Fed says the rate hikes are working and we’re pretty far along in the tightening cycle, even as they are still seeing some wage inflation,” he said.
    Cramer also reiterated his stance that the market is in bull mode —meaning that when market bears do get scared into selling, investors should pounce on the chance to buy.
    “Those who keep fighting the bull, as they did today, think they’re in a bear market, and they get trampled. Today was a real trampler, and the bears — they still don’t know what hit them,” he said.

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    Peloton CEO doesn’t care that equipment is losing money, sees path forward in the app

    Peloton CEO Barry McCarthy told investors he isn’t concerned that its Bikes, Treads and Rows lost money during its holiday quarter.
    McCarthy touted the company’s mobile app, which features on-demand fitness classes from Peloton instructors.
    The pricey exercise machines posted a negative gross margin for the holiday quarter, but the fitness equipment maker’s overall profit margin was positive.

    Barry McCarthy speaks during an interview with CNBC on floor of the New York Stock Exchange (NYSE), October 28, 2019.
    Brendan McDermid | Reuters

    Peloton CEO Barry McCarthy told investors Wednesday he doesn’t care that the company is losing money on its Bike, Tread and Row equipment. The business’s “path to the promised land,” he said, is its mobile app. 
    Peloton posted negative margins during the holiday quarter for its pricey connected fitness products, but McCarthy said he’s more concerned with aggregate margins, which were in the positive thanks to the company’s subscription revenue. 

    “We take a holistic view of the revenue stream and the expenses associated with both the hardware and the subscription associated with it. So from my part, I don’t particularly care about the hardware margin,” McCarthy said during the company’s earnings call. 
    “I care about it on an aggregate basis, and I care about the relationship between the lifetime value of the customer relative to the cost of acquisition,” he said.
    Peloton shares closed 26% higher Wednesday.
    In Peloton’s fiscal second quarter of 2023, ended Dec. 31, the exercise equipment company lost $42.8 million on its connected fitness products, bringing the division’s gross margin to negative 11.2%. 
    The company’s overall gross margin of 29.7% was kept afloat by the $277.9 million Peloton made from its subscription business, at a margin of 67.6%. 

    While subscription revenue was effectively flat quarter over quarter, it exceeded sales from Peloton’s connected fitness products for the third quarter in a row. McCarthy told CNBC it signals a possible “turning point” for the company. 
    When asked about how the app, which features on-demand workout classes from the company’s pseudo-celebrity instructors, fits into the exercise equipment company’s overall strategy, McCarthy said his primary goal is to expand Peloton’s total market share by reaching a user base that it hasn’t been able to access before.
    The cost of the app, which doesn’t require any Peloton equipment, is $12.99 per month compared with the $44 monthly cost for the company’s all-access membership that can be used on its connected fitness equipment. 
    “I think of it as its own endgame,” McCarthy said. 

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