Chinese-backed online shopping site Temu is stepping up its efforts in its most significant market with a second advertisement on America’s greatest stage, along with $15 million in discounts and other prizes, a year after making its commercial debut during the Super Bowl. The Boston-based company paid for three advertisements during the game and two after the game. PDD (PDD) is the organization that owns the massive Chinese online retailer Pinduoduo. Regarding the total amount spent on ads, a representative declined to answer.
Two people knowledgeable with this year’s advertising sales told BCE that commercials for the 2024 Super Bowl sold for greater prices than those for the game last year, ranging from $6.5 million to $7 million per 30-second spot shown on TV channel CBS.
Temu’s advertisement, which encourages viewers to “shop like a billionaire,” shows an animated shopper navigating between deals that range in price from 99 cents to $9.99.Temu released a statement saying, “The commercial marks the highlight of a Super Bowl campaign that featured more than $15 million in coupons and giveaways.”Temu’s core approach, which is to rapidly increase market share while paying less attention to profit margins, has proven successful in the past for retail behemoths Wayfair (W) and Amazon (AMZN), according to Seema Shah, vice president of research and analytics at market intelligence firm Sensor Tower.”We think that Temu’s wide selection, close supplier relationships, gamification of its app, increased ad spend, and value positioning are what are driving the company’s growth,” Shah stated. “Temu can deliver products quickly and maintain year-round price competitiveness even as it expands into new geographies, thanks to the size of its parent company.” The business debuted in the US in September 2022, just months before its first Super Bowl commercial. Since then, it has spread to over 15 nations, including the UK, Mexico, Germany, and Australia. According to Sensor Tower, Temu’s app was the most downloaded in the US and the seventh most downloaded worldwide in the previous year.Temu “completely captivated consumers over the course of last year,” according to the data business, which spoke with BCE. In January alone, Temu attracted 51 million monthly active users, up nearly 300% from 13 million in the same month the previous year. According to Sensor Tower, it has made significant advertising expenditures and, in the final three months of 2024, ranked second only to Amazon in terms of Facebook spending. These initiatives seem to be having an impact. According to Earnest Analytics, the newcomer has drawn customers from Dollar General (DG) and Dollar Tree (DLTR), “shaking up” the American bargain sales market.
The recent increase in the shares of Temu’s parent company PDD—which does not disclose the profitability of its foreign venture—is also attributed in large part to Temu’s performance. PDD shocked analysts with record-breaking third-quarter earnings in November.Because of this, PDD’s market valuation shot up that month, finally surpassing that of more established e-commerce competitor Alibaba (BABA). Jack Ma, a co-founder of Alibaba, responded by urging “change” within his business.