Chinese ecomm titan Temu spends millions on Super Bowl ads to buy US popularity
Advertise like a billionaire… Chinese online mega-retailer Temu taught Americans that it’s pronounced “Teh-moo” in six Super Bowl ads. Each 30-second spot cost $7M, and Temu sweetened its cartoonish commercials with $10M in giveaways to boost its US popularity. Temu, which launched in late 2022, has grown wildly fast for a corporate toddler as it pulls $$ from its deep-pocketed parent, PDD Holdings (which owns Chinese ecomm behemoth Pinduoduo).
BOGO: Temu splurged an estimated $1.7B on advertising last year, and a billion of those ad bucks were spent outside Asia-Pacific countries. It was the US’s fifth-biggest digital-ad spender in Q4.
Momentum: Temu is the second-most-popular shopping app (behind Amazon) and was the App Store’s No. 2 free download after its Super Bowl ad blitz (FYI: it was No. 1 after last year’s Bowl ad).
Sellers of cheap stuff face off… Temu’s marketing cash cannon could boost US sales as China struggles with weak consumer spending. To court shoppers worldwide, Temu set up an HQ in Boston and will soon open its ultra-cheap marketplace to US and EU sellers. Less than a year after launching, Temu had more users and transactions than rival e-tailer Shein. The ecomm-petitors have been throwing lawsuits at each other like sixth graders with snowballs (in one, Shein accused Temu of using “mafia-style” tactics). Temu is also facing forced-labor allegations and data-privacy suits.
Forced popularity is pricey… Temu lost an estimated $7/order last year as it balled out on ads and shipped $3 wireless headphones and $6 Stanley cup knockoffs. Taking a loss to gain market share (which Temu denies it’s doing) is a popular tactic in China that analysts say sister co Pinduoduo used to dethrone Alibaba. The spending could pay off later: while Temu lost its parent company $3B last year, analysts estimate it’ll turn a $3.5B profit by 2027.