The world’s first TikTok war?

The battle for Ukraine is not just a fight for control of land, but also for control of information. While Russian and Ukrainian forces clash on the ground, many have also taken to social media as a new battleground.

A video of a Ukrainian man removing a tank mine, cigarette casually still in his mouth, went viral. Ukraine’s official tourism Twitter account posted memes, many of them referencing the Simpsons, ridiculing Russian leader Vladimir Putin. A Ukrainian TikTokker with more than 2.7 million likes has been posting videos showcasing #bombshelter cuisine to creatively use rations, scenes of devastation set to Billie Eilish’s hit song Not My Responsibility, and a video where she simply gives a unamused thumbs up into the camera with the caption: “PLEASE RUSSIA STOPPPPPPPP”. We live in surreal times when the language and aesthetics of social media, which we usually use with such frivolity, seep into devastation and conflict. Some commentators have already begun calling this the world’s first TikTok war.

Our take on how this social media war is going:

1. Ukraine has deployed a horizontal structure for content generation, mobilizing its entire citizenry to take to social media. Russia, while impressive in its capabilities, remains a largely vertical structure where information is crafted through key state-controlled outlets. There are huge advantages to Ukraine’s approach: new, varied, and engaging content is constantly created and distributed via a wide variety of sources.
2. In this social media age, it’s often the most consistent, persistent messaging that gets through to audiences. A quote often attributed to Nazi propagandist Goebbels goes: “Repeat a lie often enough and it becomes the truth”. Russian operators understood this previously and deployed legions of accounts/ trolls/bots to disseminate key points during the Georgia and Crimea conflicts. But what beats frequency and consistency is frequency, consistency, and audience engagement. Canned, poorly phrased tweets are not substitutes for well-crafted, dynamic content.
3. That being said, there are severe limits to the reach of Ukrainian social media. It has already been noted that there are significant segments of the population in India, China, and other states which express pro-Russian sentiments. This is not only a question of geography, but also of algorithm. Many of the online users expressing support for Russia have already been consuming news from Russian state-affiliated outlets for years, and as a result of algorithms feeding users more of what they engage with, their “internet” is not reflective of the “internet” others experience.

Content distribution, user engagement, and understanding the social media algorithms that dictate what we see—these are no longer just the realms of businesses doing digital marketing, but the battlegrounds of nation states.

Grab is a unicorn in more ways than one now

Closer to our home of Singapore, the ridehailing giant Grab just reported a net loss of over USD1 billion for Q4 2021. While gross merchandise value climbed by 26%, it came at the cost of heavily subsidizing growth by pushing generous incentives and promotions. Shares are down more than 38% this week as of the time of writing.

Grab is pursuing the Amazon strategy, where Bezos’ juggernauts posted losses for years until 2018. What this picture is missing however, is that Amazon’s core business growth was never reliant on endless injections of funds, nor at selling products at a loss.

Take a look at this chart of operating cash flow for Amazon from 2009-2021.

There’s a clear trends towards growth in terms of cash flow and much of the losses posted can be seen as Amazon directly ploughing that back into capex. Grab, on the other hand, has consistently seen negative operating cash flow as it expands. Grab is essentially subsidizing the prices of its services to gain market share and subsequently, when it raises prices to reach some measure of profitability, it is met with severe backlash, regulatory scrutiny, and price wars.

For Amazon, AWS became its engine for higher margins and industry experts estimate it contributes to more than half of the company’s operating income. Grab is venturing into financial services and seeking to break even in its deliveries segment. Will this be Grab’s AWS? Will it come fast and furious enough to satisfy an increasingly concerned shareholder base?

The Amazon model has been extremely powerful, but it may not be replicable, sustainable, nor good for the market in the long term. We at nØught labs believe in sustainable gradual growth measured over decades, not months. Coincidentally, we will be giving a talk at the Asia School of Business in collaboration with MIT Sloan this coming week titled: “Against Move Fast, Break Things: A Rethink of Sustainable Growth”.

Until next month,

Ong Kar Jin

CSO at nØught labs