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Temu, an e-commerce app run by Chinese company PDD Holdings, is expected to continue to grow rapidly in the U.S. and plans to run a Super Bowl ad on Sunday, a spokesperson told CNBC.
It is unusual for a Chinese company to purchase Super Bowl advertising space that costs millions of dollars. However, this will be Tem’s second advertisement at a football event. Tem first aired a commercial last year highlighting how parent company PDD is aggressively trying to crack the U.S. market.
In addition to the commercial, Temu will be giving away $5 million in coupons and credits, an initiative that is already underway. On Super Bowl day, Tem is planning an additional $10 million giveaway, a spokesperson said.
A spokesperson declined to provide further details about the content of the ad or the price paid for the spot.
Temu launched in September 2022 and aired its 2023 Super Bowl ad shortly after. The commercial features a young woman who is amazed at the low prices of clothing and accessories offered by Temu.
“The prices are amazing. I feel so rich. I feel like a millionaire. I shop like a millionaire,” the ad jingle says.
In a survey of 150 people conducted by market research company Zappi, 51% said they “liked” last year’s ads, giving them a score of 8 out of 10. This number is in line with the average for other ads Zappi has researched. However, his 21% of respondents said they “disliked” the ad, and he gave it a score of 4 or lower on the same rating scale. This is significantly above average, Zappi said. More than one in three viewers (34%) found the claims in the ad unbelievable.
Still, Temu continues to spend heavily on marketing to acquire users through platforms like Facebook. Temu’s U.S. ad spend grew 318% and 101% year over year on Meta-owned Facebook and Instagram, respectively, in the fourth quarter of 2023, according to Sensor Tower data.
And the spending paid off. According to Sensor Tower, Temu was the number one most downloaded app in the US last year. Temu’s monthly active users reached 51 million in January, an increase of nearly 300% year-on-year.
Temu’s challenge now is to retain those users and grow its share of the U.S. e-commerce market as it seeks to compete with players like Amazon.
Morgan Stanley said in a note to clients last month that its research showed a 20% drop in the number of households shopping at Temu in January compared to September. The investment bank also said that U.S. stock gains in 2024 are likely to be “modest” and that growth “may depend on capturing a higher share of existing shoppers’ wallets.” Stated.