If you tuned into the Super Bowl on Sunday, you were bombarded with no fewer than three ads (plus more before and after the game) urging you to “shop like a billionaire.” That was part of a hyper-aggressive marketing campaign by Chinese e-commerce retailer Temu to conquer the North American market.
Why it matters: Temu’s big spending marketing blitz — one 30-second Super Bowl ad spot was selling for US$7 million, and Temu had six — is unprecedented, and its sheer scale is disrupting both retail and ad markets in North America.
- Temu, which is owned by PDD Holdings, spent US$1.7 billion on marketing in 2023, and analysts expect it to spend US$3 billion this year.
- That marketing push, coupled with an ultra-discounted pricing strategy, has made Temu the most popular shopping app in the U.S. and Canada.
Zoom out: There’s some evidence that other sellers, including Amazon (the reigning champ of impulse purchases), are beginning to feel the impact of Temu’s strategy.
- Amazon cut its fees for clothes sold for under $20, the sort of products that make up much of Temu’s inventory.
- Dollar stores may be more vulnerable than Amazon: One report found that a leading U.S. dollar store’s customers shifted 14% of their typical spend to Temu last year.
Yes, but: Temu’s growth has slowed in North America in recent months, despite splashy ads and deep discounts. Bloomberg data showed sales into the U.S. down in December and January, even as overall retail sales rose, while analysis last year by WIRED showed the retailer was losing around US$30 on each order it shipped.—TS