mark: i'm mark crumpton, you're watching bloomberg west. donald trump laid out his economic vision for america today. he said no business should pay more than 15% in income taxes and that he wants to simplify the tax code to three brackets, 12%, 25%, and 33%. his speech was disrupted more than a dozen times by protesters whose shouts were drowned out by boos as they were led by the room by security. hillary clinton says trump's proposal would benefit rich corporations and the wealthiest americans at the expense of the working class. mrs. clinton told a rally in st. petersburg, florida, she'll raise taxes on the wealthy because that's where the money is.

officials have signed a letter opposing donald trump. they include former members of the nixon, reagan and both bush administrations. they write they're convinced trump would be the most reckless president in american history. doctors without borders says a hospital in sports in rebel-held northern syria has been destroyed by air strikes. the group says the hospital was hit directly killing five children and eight others. hospitals mostly in rebel held area are regularly attacked. more than 40 attacks were reported in july. global news 24 hours a day powered by our 2,600 journalists in more than 120 countries. i'm mark crumpton, "bloomberg west" is next. ♪ emily: i'm emily chang and this

is "bloomberg west." coming up, the escalating e-customers war, will wal-mart's acquisition give it enough ammo to really challenge amazon? the clash of two retail titans for e-commerce supremacy. will apple reveal a new iphone next month, we'll give you a first look at the changes in store for iphone users this fall. and my taxi gets in the front seat with halo. could this alliance in the ride sharing war lead the charge into new territory? halo c.e.o. andrew pinnington joins us to discuss. to our lead, can wal-mart turbocharge its e-commerce business? the big box retailer is hoping to do just that with a $3.3 billion acquisition of a fast growing marketplace. the deal includes $3 billion in cash and $300,000 and wal-mart shares to be paid out over time. it will run wal-mart.com and jet will remain a separate brand.

the current head of e-customers will be stepping down. the wal-mart has spent billions of dollars expanding its online operations but trails amazon by a long shot. at the very same type, overall revenue growth and physical store expansion is declining as well. can jet.com help turn things around? joining us is david kirkpatrick and bloomberg's global head of technology, brad stone and guru who worked at amazon and ebay. brad, you wrote the book on amazon and wrote the business week cover story on jet which was last year. this is such a young company. they say they're processing 25,000 orders a day, adding 400,000 shoppers a month. there are reports that it's been struggling. is this the best way for wal-mart to spend $3 billion? >> first of all, let's discard the numbers. it's a years old company. you look to the left and right, are either of those people jet.com shoppers, probably not.

this deal is about history and people. i don't usually do this but i got to go back to my book, the amazon acquisition six years ago. wal-mart stepped up to that deal. wal-mart was talking to quincy first. emily: that was the company that mark founded? brad: through distraction and lack of faith, they lost the deal. they don't want to be wrong again. mark has a team, scott hilton, nate foss, the c.o. o. the team can think strategically about e-commerce and know it better than anyone and have a record of offensively opportunity alongside amazon. amazon will get you that box in two days or one day. you can't beat them on selection. what the jet.com folks have been able to do is to a certain extent beat amazon on price or at least find some opportunities to create a brand that will speak to economic-minded consumers. emily: we have been digging into some charts on the terminal.

wal-mart's e-commerce business is declining as a percentage of its overall business, it grew 7% last quarter. if it's for the talent and team, is it worth it? >> i think in this game of e-commerce, it's either grow fast or die slow. wall matter realizes that. we are seeing the decline in the e-commerce sector and for them, it is a game of how to get back into the entire war. one of the crown jewel of this acquisition is really the pricing technology that jet has. we have tracked amazon, wal-mart and jet over the last year or so and as brad pointed out, we have seen wal-mart.com has been expensive, 8 to 10% more expensive than amazon and jet has been treading the same lines as amazon, sometimes even cheaper than amazon.com. this is a good game for wal-mart to watch that pricing technology and bring that in-house and put that into play to potentially

grow their e-commerce business. emily: the way the algorithm works, the more you buy, the cheaper it gets. it encourages you to buy in bulk. i did speak to mark last year when the company was six months old. take a listen to what he had to say about amazon in particular. mark: we don't see amazon or anyone else as a competitor. we see $3 billion growing to $1.2 trillion in 10 years. there is plenty of space for multiple players. emily: david, i want to bring you into this, look, amazon is far away the leader in e-commerce. is this a play for number two because can wal-mart ever be number one? david: the simple answer to that is no. there is no scenario where wal-mart will be number one in e-commerce. i can't imagine that. if you listen to what we're saying here, it's for talent, $3 billion worth of talent. it's to get a better pricing

methodology. they're paying $300 billion to reduce their margins and build their market share. i do agree and i think doug mcmillan is obsessed with this issue that they have to become a more digital player. that's critical. it just shows how hard it is for some of these lumbering behemoths to make the pivot they have to make the way they have to do it. it's a costly way to achieve a desired result. emily: brad, how much can jet really turbocharge wal-mart's e-commerce business? brad: we'll see. the biggest challenge is how do you utilize, how do you exploit the assets that wal-mart has, the huge stores, the distribution centers, how do you exploit that advantage for e-commerce. mark and his team running wal-mart.com, can they get the desired benefit if they're not

running wal-mart. kill some of those prized assets for the benefit of growing the online business. that's probably what wal-mart has to do. you do have some of the best strategic thinkers in e-commerce, anyone can pull it off, it's them. emily: wal-mart is opening fewer stores and revenue is also growing more slowly. we actually got a chart to show you that. the bigger question, what is the future of wal-mart, how do they balance their e-commerce efforts with the physical store efforts? is it more like an identity crisis? >> from a shopper's standpoint, fast forward five years from now, this is a high-tech game. it is not either/or. wal-mart has the physical presence, they have the store network and they have the game already figured out being so

close in proximity to the american shopper. they sort of lacked in the high-tech game. this is a shot in the arm for them to bring the high-tech into the picture to get a chance to compete with high touch and high-tech and go head on with amazon potentially on this. emily: i want to talk about the great india sale at amazon. marisa and kevin are on the board of wal-mart. now this guy, neil ashe, who was considered perhaps the number two is gone. do we want to make anything of that? >> it's shows you the struggle. it's a struggle that they're looking at and e-commerce again, it's a tough game, we have seen prices go down consistently. selection is more than 500 million on amazon now. it's a bloodbath. how do you counter that? >> wal-mart.com has a geographic challenge. their e-customers folks are in california.

bentonville is where most of the decisions are made. emily: do you see marisa as the future c.e.o. of wal-mart? >> unlikely. emily: let's move on to india, a huge investment in india, the great india sale is happening there as we speak. david, talk to us a little bit about how big of an opportunity this is for amazon. david: if you think of amazon being such a powerhouse steamrolling its way over global e-commerce already, if they're competitors are spending $3 billion to compete with them, for them to spend 50, 100 million here or there to build market share in a critical market like india by offering special discounts which they seem to be doing right now, that makes a lot of sense to me. it is a global opportunity. this is where they agree, e-commerce is a global business

and it will be probably the central form of commerce down the road. amazon dominates. it wants to continue dominating. it has to do it, therefore, in places like india. emily: china has been a difficult place to crack. india is very different, the language is different. does that make this a completely different story? >> look, i was actually at amazon when amazon acquired and saw a bunch of those in action. let me remind you that india is much different from china in a lot of perspectives. the output of that, you say the facebook off india is actually facebook. the google of india is google and amazon of india is also becoming amazon. it's not flip card. right now, although there has been a tug of war, amazon right now is clearly winning. the key to that has been

definitely the long term investment that they have made in india and the customization that amazon has been able to do in the indian market. they launched a marketing program that says we indians. imagine amazon launches we indians love shopping and love low prices. they have taken what they call chai cards in the streets and educated the indian mass about the e-commerce markets. emily: we'll be following that sale over the next couple of days. david, you are sticking with me. still to come, apple has yet to confirm it's unveiling a new iphone next month. we learned about some key upgrades in the works, are they enough to bring a much needed stock boost to the company. that is ahead. ♪

emily: more now on wal-mart's $3 billion deal to buy jet.com and one unlikely millionaire to cash in on the deal. he won an online competition, the prize, 100,000 jet.com shares. he joins us from harrisburg, pennsylvania, grinning widely, eric. first of all, congratulations. just how much money? eric: thank you so much. emily: how much money did you make on this deal and how do you feel? eric: i feel wonderful. it's 100,000 stock options. i'm not at liberty to tell you how much it comes out to, i'm very excited. emily: you work at a bath installation company, you have a family and kids. you invested $18,000 on online ads to get people to sign up for jet.com.

what made you so convinced that it was worth the risk? eric: you know, at first it was just kind of on a whim. i started by getting myself in the contest. i was at 230,000 and i got my wife in. i was like at 13 or 15,000 in the contest. as i did better in the contest, i also was kind of vetting jet in my mind and it's really paid off. emily: are you a customer? eric: yes, yes, my wife more than me. she does most of the shopping. emily: we have been talking for the last few minutes about whether this was really worth $3 billion from wal-mart's side. do you think it's worth it, just as a customer, is this a good investment? eric: for wal-mart, yeah. eric: yes, yes, my wife more i think it brings them into the, sort of the 21st century. emily: so what do you think is so special about jet.com?

eric: it's hard to say. there are so many things. i think their customer service is amazing. they're shipping stuff fast is amazing. their prices are amazing. it's just fun and i think it's just fun. it's a fun website. it's a fun brand. it's fun to see what you can add to your cart and making prices better. emily: do you use amazon as well? eric: on occasion. if i can't find something on jet.com, i'll consider it. emily: good to know, eric martin, newly rich, we think, thank you so much for joining us and congrats on that investment. coming up, who raises the white flag in china as a u.s. tech accelerator doubled down with start-ups. we chat with the c.e.o. of rocket space. ♪

emily: if you found out what many other u.s. tech companies realized long ago, china is an alluring trap. we take a look at why it might be time for u.s. web companies to permanently give up on china. >> no u.s. web company has really cracked china and it's time they stopped trying. google, facebook, amazon, microsoft, ebay all have either been shut out of china or are barely treading water. the latest loser is uber which sold its chinese operations after it lost billions of dollars in the country. apple has done well, but struggled there recently. why can't american internet companies succeed in china? three reasons, one, china's web titans are unimaginably big and broad making it tough for foreigners to be with them. a bigger share of web sevens in

china than google does in the u.s. two, china's laws and government interventions favor local companies. for example, facebook and twitter are banned in china and google pulled out a few years ago because it was the target of massive cyber attacks and it didn't want to comply with censorship rules. three, chinese technology has become really good. local companies make start phones as good as iphones about with features tailored to chinese taste like guessing your age from selfies and the ideas are being copied elsewhere like facebook turning it's chat app mention into another app. the superpowers, the tech prowess and government help has hardened china into an online economy where locals rule. china seems to big to ignore, but also too hard to crack for america's web powers.

emily: shira of bloomberg gadfly. and rocketspace known for housing start-ups in its early days is putting $336 million into accelerators and tech campuses in china. still with me are david kirkpatrick and duncan logan, c.e.o. of rocket space. you guys provide space to companies like uber, spotify, in the early days, you give them mentoring, you help them network, but you don't take any equity in these companies. >> no. emily: you want to do it for chinese companies in china, is that right? >> yes. emily: tell me how the model works? >> it focuses on technology companies and these are companies who are trying to become the unicorns of the future. our goal is to help them succeed in that by introducing them to additional capitol and organizations around the world in innovation type of spaces.

emily: we talk about the challenges for u.s. companies. is it against u.s. tech companies in china? >> we have a well established platform here in san francisco. we want to create that ecosystem out in china and other cities across china to help u.s. start-ups go into china earlier and also to start helping chinese start-ups come into the u.s. one of the challenges u.s. companies have, by the time they go into china, they're leaving it too late. by the time they're going in, they already have their copy cat companies operating in china and getting funded in china. our goal is to help start-ups from the u.s. go into china a lot earlier and gather chinese

investment into those start-ups rather than their competitor. emily: david, jump in here. david: 331 million which you're raising for this chinese company is a lot of money. i'm just curious specifically what it's going to go for. it's a little hard for me to understand your business model to be honest and where all of that money is going to go. duncan: so the money is going across a number of programs that we're going to be running. some of that will be going into real estate endeavors which is pretty capital intensive. some of it is going into new programs we're announcing later on this year to help start-ups be more successful both here in the u.s. and in china. i should add that the majority of the money we have raised is actually going to be spent in the u.s. and europe. we'll be looking at additional sources of capital for china. emily: why is that? duncan: china at the moment as a lot of capital chasing good products. with our partnership with the joint venture that we have now funded in china, we can raise more capital into the entity itself. emily: you have g.g.v., big on

expanding practices in china, what makes you think you can succeed in china when so many other u.s. companies have failed? duncan: that was the whole intention of setting up the joint venture. we looked to tackle that market by ourselves or a joint venture. we chose the joint venture because the pearls of u.s. companies going into china has been well-documented. h and a is more than just a capital partner. it's a conglomerate that covers across real estate, technology and capitol. with these different divisions, we feel we have a great partner. david: what i find interesting about rocket space, you work with big companies to intersect with the start-up mindset and work with smaller companies when appropriate. can you talk about how this major new step for your company might be affected by that part of your business or vice versa? duncan: our strategy, you're

absolutely right, over 50% of our revenue comes from large corporations who are wanting to understand the start-up ecosystem and want to introduce or be introduced to valuable start-ups. in china, that would be no different. what we find is that in china, there are more corporations wanting to get into this open innovation space and learn about start-ups and invest in start-ups, both in china and the u.s. our two-pronged approach will be highly valuable in both the u.s. and china. emily: should u.s. tech companies give up on china? duncan: absolutely not. there is an enormous opportunity for a tech start-up to get both right, go big in china and the u.s. as much as american start-ups haven't done so well in china yet, there is not many chinese start-ups that have done well in america. if we can be the bridge to make happen, we'll see some really extraordinary companies.

emily: we'll keep our eye on you guys, thanks so much for joining us. we'll be right back with more of "bloomberg west." this is bloomberg. ♪

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>> asian stocks are trading after a one-year high in the regional benchmark build on mondays biggest gain in four weeks. consumer shares are leading gains in tokyo, but oil has retreated after getting almost 3% in the last session. china's factory deflation has eased for the seventh straight month, figuring improving conditions for manufacturers. the consumer price index dropped in the smallest decline in nearly two years. 1.8%, inprices jumped

line with estimates. hong kong real estate shares are the highest as the city's last housing bubble burst nearly two decades ago. the benchmark equity gauge has surged 37% from its january low to the highest versus hong kong's hang seng index in 19 years. the outperformance is ringing alarm bells for investors, who are worried that property shares have climbed too far, too fast. global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. this is bloomberg. let's get the latest on the markets. haidi? japan let's see how reopened in the afternoon session. we had a pretty lackluster start to the trading day. nikkei 225 in the afternoon session getting off 2/10 of 1% of gains. a little muted. we're looking for the next catalyst because we do have a number of central bank to. 1.8%, in line with estimates. and we do also have the reserve bank of india, said to open in

10 minutes. elsewhere around the region, hong kong stocks declining for the first time in four days. we are seeing in particular eggs numberragged down -- a of consumer stocks are putting on gains, australia is up to 1/10 of 1%, energy stocks gaining there, but quite a bit of weakness coming from southeast the asia, jakarta down, malaysia down. seeing gains of 3/10 of 1%, being led by these coal miners. we are getting more government support coming through in terms of the banking regulators, extending loans to distressed companies. and also there is a report that this draft regulation will be coming into effect. let's take a look at where we are sitting in terms of the fx space. the big winner is the taiwan dollar, up 3/10 of 1% after

import/export beat expectations late yesterday. the japanese yen is looking pretty flat at the moment, still sitting at 102.38. the aussie dollar being extended after china cpi data. ♪ emily: this is bloomberg west. the wars are rolling on. halo announced a merger to target uber. this came before over sold the chinese business to didi. i set down with the ceo to ask if there were other markets that cannot be cracked. >> i would not ever say that. a company of that scale will get the quality of execution and it will be foolish to make a blanket statement. a global challenge is how much

you do and this is a thing where it is reflective of the chinese situation. when you are a local player, this will give you an advantage with the scales of funding. >> we have seen a lot of m&a and volkswagen is taking steps. apple is investing. how will this play out and will we see consolidation? >> it is difficult to know what the end game is. i would be surprised if a player ends up through the market domination and winning the entire globe. what we are seeing is in india.

it lists the degree and you see the regional domination start to play out. how they end up merging or talking together, i am not sure. for the first siebel future, you see the dominant players taking shape. -- for the for seeable future, you see the dominant players taking shape. you probably have four or five regional champions who can play strongly and it is a scaled game and it is fixed costs in the center.

the more volume pushed through, the regional players start to make sense. to your point, you could start seeing these and you are seeing a form of these working together and moving together. whether you will see one or two globally dominant once and local players beneath, i doubt this. you will see a regional evolution and players will play strong for the for seeable future. >> what are you seeing in other cities and how are the resources helping? >> this is a benefit of the deal

and we now have a shareholder base that will go after the shares in the state. you see this capturing data and urban transportation is key to this strategic future. they really want to see this business become the dominant player across the european footprint and the ability to fund this plan will help us play on a more even playing field. host: what is the plan to overcome the regulatory hurdles? >> it is important to know that the business plays within the regulatory framework. we use a phrase called constructive disruption. the european theory is different

from other markets around the globe and i would say that it is more socially democratic and trying to deliver the best resolution for the city. we play within the regulatory and for structure and this is, going back to the original question, one of the advantages that we have, playing within this infrastructure and improving it for the benefit of the city, rather than necessarily changing it. >> andrew pennington there. sticking with european technology, there are food delivery heroes looking to gain an edge. caroline reports from berlin.

>> it looks like they are hungry for investment. a key start up here. they say they may have a share and they have the size and the scales over the weekend. this is important. they have sign-ups on the platform and it is back. this is on the public market and they could be cashing in before the rise in the trading. meanwhile, we see other companies increasing investment. you have a key success story raising money and they have been raising $200 million last year and they need deep pockets with

the competition building. they have been scaling in europe and it is winning with the cars and the food. the race is on to be a dominant player. there is plenty of appetite here in europe. >> caroline hyde in berlin. a major design change to the iphone and we will tell you what that is. this is bloomberg. ♪

>> how convincing is this? >> this is bad news and it is disconcerting. they showed growth and it is down from 87% and this one from being a rocket ship to a skate board. the question is where they go.

>> what did they have to say? >> they said that she wanted to talk about the future and they asked her to stay on. she is now leaving. there was a guarantee of a higher rate of return. listen to what she had to say. >> over the long run, we anticipate a higher level of investor acquisition cost and we will diversify this change and it may move the contribution margin. >> this contribution, they are saying that it could be less profitable and this is a concern for businesses and there may not be a place for them to grow in the markets.

>> thank you for that update. time to find out who is having the best or worst day ever. it is delta airlines. they were forced to cancel 650 flights after a massive computer failure. an outage interrupted computer operations and delays continued after the system came back online. it is expected to cost the company tens of millions of dollars and delta has offered vouchers to customers with over three hours of delays. that does it for us.

do not miss bob iger. he will be having a conversation about the latest results. this is bloomberg. ♪

>> oil holds gains. new talks very the cartel is not expected to revive the aborted output freeze. his taxrump lays out plan. he wants to shake up america's business regulations. the slow down in saudi arabia. thousands ofke