Why Temu dropped $21M on 3 Super Bowl ads

Chinese language-owned e-commerce large Temu dropped tens of tens of millions of {dollars} on three Tremendous Bowl commercials and supplied $15 million in giveaways in hopes of getting a serious leg up with US customers.

The 30-second advert spots throughout Tremendous Bowl LVIII — when the Kansas Metropolis Chiefs clinched the Lombardi trophy after the sport went into time beyond regulation towards the San Francisco 49ers — price manufacturers a reported $7 million every, based on Bloomberg.

Thus, Temu spent an estimated $21 million on its three commercials aired all through the Massive Sport, which touted the weird tagline “store like a billionaire.”

The web low cost market additionally supplied $15 million in giveaways, coupons and different promotions, based on CNN.

Temu — which relies in Boston and owned by PDD, the group behind Chinese language on-line buying large Pinduoduo — additionally paid for 2 post-Tremendous Bowl commercials to air throughout CBS’s late-night programming, CNN reported.

It’s unclear how a lot Temu spent on its post-game advertisements.

Temu — owned by China-based PDD, the group behind on-line buying large Pinduoduo — reportedly spent at the very least $21 million on its three commercials throughout Tremendous Bowl LVIII. It additionally paid for 2 post-game advertisements and supplied tens of millions in promos. REUTERS

Temu’s Tremendous Bowl spend had its desired impact, based on Google Tendencies knowledge, which confirmed that net searches for the app spiked when the commercials performed.

Temu searches had been steadily declining since early July, Bloomberg reported, together with the corporate’s noticed gross sales, which fell 2.5% month-on-month in December and 4.8% in January.

Nonetheless, Temu noticed spectacular development final 12 months, when it made its Tremendous Bowl advert debut after formally launching within the US in September 2022.

In 2023, Temu’s gross sales elevated a staggering 805% at the beginning of the 12 months and greater than 50% mid-year, based on Bloomberg Second Measure knowledge monitoring, a subset of US credit score and debit card transactions.

Temu’s explosive development in January 2023 gross sales was 4 occasions greater than the No. 2 spot, Elon Musk’s House X, and much above e-commerce rival Amazon, which skilled 191% and 1.71% gross sales will increase, respectively.

However in current months, the variety of Individuals buying on Temu has additionally fallen, based on the Second Measure knowledge, as Temu has developed a status for lengthy supply occasions, unresponsive customer support and incorrect orders.

The corporate’s Higher Enterprise Bureau profile boasts a dismal 2.5 stars, with prospects complaining that the location is a “rip-off.”

Different customers have raised considerations that the Chinese language app poses a safety menace to Individuals. Some even urged that the corporate ought to be barred from promoting through the Tremendous Bowl due to its origins.

“TEMU advertisements for the Tremendous Bowl. Promoting faux merchandise. HP says they’re not ‘their stuff.’ Orders that by no means present up,” one X consumer said. “In what world does it make sense to permit a China, communist, dictator managed firm to compete with Amazon and Walmart? WAKE UP AMERICA!!!!!”

“Freedom-loving” digital market PublicSquare additionally weighed in: “It’s stunning that we permit Tremendous Bowl commercials from an organization like Temu who has an extended historical past of slave labor and funding of the Chinese language communist occasion,” the corporate shared.

A late-January survey from Morgan Stanley supplied cool consolation for Temu’s future: It discovered that almost one-third of its customers plan to buy much less on the app over the following three months.

Though Temu saw blockbuster growth in 2023, its American consumer base has declined in recent months. Some shoppers -- including e-commerce rival PublicSquare -- have raised security concerns about the app.
Although Temu noticed blockbuster development in 2023, its American client base has declined in current months. Some customers — together with e-commerce rival PublicSquare — have raised safety considerations concerning the app. X/@officialpsq

Solely eBay and Etsy had weaker outlooks, based on Morgan Stalney’s findings, which have been earlier reported on by Bloomberg.

Margins have declined in current quarters and are anticipated to maintain declining, based on Bloomberg, as PDD must proceed providing steep reductions and rebates to be able to develop quickly within the US.

“Profitability is a priority. It’s simply not a precedence proper now,” Morningstar senior analyst Chelsey Tam stated.

Representatives for Temu didn’t instantly reply to The Put up’s request for remark.

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