Welcome to Sunday Snacks, folks. We’re out here hustling for words while you’re out at the farmer’s market buying pumpkins for your kids to pose on (sorry parents).

Sorry for not hitting you up on last Sunday.

Peter came back safely from the woods with a volleyball. Thanks for your concern.

NOTES:

HAPPY BIRTHDAY TO AHMED and the following people:

• PHARMA BRO

• CPG FINANCE GUY

• MEDICAL INSURANCE START-UP GUY.

The gambling lines are absolutely crazy this week. Hopefully birthday money lost feels just as good as birthday money won.

Alright here’s the run-down:

Malaysia Bans Social Media Transactions

Malaysia banned all transactions taking place on all social media apps (does that include OnlyFans?), including TikTok

Here’s 4 points on why that’s a huge blow to TikTok’s growth plans

• With Western growth slowing, TikTok is betting its next wave of growth is coming from South Asia

• Around 30% of its 325 million users are in Indonesia

• Commerce is a huge growth driver for TikTok in the region.

• The TikTok store generates ~4.4bn in revenue, most of it coming from South Asia, where social shopping has become a habit

What does TikTok do now?

1. Close up shop.

2. No, seriously.

3. Just shut down the app.

Be serious.

Okay so it’s a ban on the commerce feature. Not the app. TikTok still has the fire hose of ad revenue coming from content. But here’s what a modification in the plan would(should?) look like:

1. Ramp up existing presence in Malaysia

We’d probably look at raising ad revenues coming from the country from a mixture of expanding ad affiliates/raising rates

2. Re-invest regionally

Take all the capital being uses to ramp up TikTok commerce and re-invest in different countries seeing the same traction, like Vietnam.

3. Build better political relationships

Malaysia is a huge player in Southeast Asia. To prevent a domino effect, TikTok would probably look to bolster its political relationships locally and nationally in other countries to prevent any domino bans coming its way.

Further Reading

We’re not usually the ones to pass up the analysis. But we uncovered a Scott Galloway piece that encapsulates all we’d like to say about banning TikTok in the U.S..

Here it is: No Mercy/No Malice

Again, none of this is investment advice.

What AI made this week

Have a great week!

Ahmed and Peter