The Parent Company of the E-Commerce Platform Temu Spent Nearly 2 Billion US Dollars on Advertising with Meta Last Year, Ranking Among the Top Advertisers on Google. Temu, an Emerging Discount Retailer Founded in China, Has Established Itself as an Increasingly Powerful Force in American Business. According to Insiders Familiar with the Matter, Temu was Meta Platforms' Top Revenue-Generating Advertiser in 2023, with Parent Company PDD Holdings Spending Nearly 2 Billion US Dollars on Advertising with Meta, Surprising Executives of the Social Media Giant. Temu was also Among Google's Top Five Advertising Clients Last Year, a Development That Even Industry Experts Found Astonishing.

Temu, which was only launched in 2022, and other online trading platforms with Chinese roots, such as the fast-fashion giant Shein, are aggressively investing in advertising to reach American consumers. This drives up the prices for digital advertising, leads to the poaching of logistics staff, and generates such a volume of products that it has become a boon for the shipping industry. The resulting advertising battle in the e-commerce sector benefits Meta and Google, helping the tech giants to revive their advertising businesses after a slump and new Apple policies that have impacted the accuracy of their advertising.

Meta's stock prices surged in early February following the company's best revenue growth in over two years. Revenues from Meta's China business nearly doubled in the past year, reaching 13.69 billion US dollars, a significant turnaround compared to the previous year when revenues had declined by nearly 3% to 7.4 billion US dollars. In contrast, revenues from customers based in the USA grew by only 5.5% to 49.78 billion US dollars in 2023.

Meta Employees Joked Internally About Sending Temu a Generous Gift Card as Thanks. According to an Estimate by Goldman Sachs, Temu's Marketing Spending On Average Resulted in a Loss of 7 US Dollars per Order in 2023. "It's Likely That Temu is Losing Money on Each Sale as the Company Tries to Establish Itself in the Market Through Investments," said Advertising Analyst Brian Wieser. However, Wieser Notes That a Withdrawal of Temu Would Not Significantly Affect Meta's Overall Growth Due to the Broad Range of Advertising Coming from China.

PDD Does Not Disclose Financial Details for Temu. Temu's spokesperson referred to PDD's financial reports in response to questions about whether Temu is losing money. PDD, which also owns the Chinese e-commerce platform Pinduoduo, reported a profit of $2.1 billion for the third quarter of 2023 and spent nearly $3 billion on sales and marketing during this period.

Google Highlights Revenue Growth from Asia in Q4 2023 Earnings Call. "We saw particular strength in retail in the APAC region, a trend that started in Q2 2023 and continued through to the end of the year," the company reported in January. Google, part of parent company Alphabet, has been actively courting Temu's business. Sales representatives in China discussed supply chain issues with Temu's executives to monitor the company's advertising spend levels.

While Temu focused on online marketing to attract customers, the company also took advantage of the biggest TV night of the year: the Super Bowl. Temu invested tens of millions of dollars in its Super Bowl advertising campaign, which included several commercials during the CBS broadcast of the big game. Brands paid about 7 million US dollars this year for 30 seconds of advertising time during the Super Bowl, the most expensive advertising space on television. Temu's animated commercial, which advertised with the slogan "Shop like a billionaire," featured a girl dancing and tossing low prices at the camera.

The Super Bowl is considered an ideal launchpad for new brands that want to present themselves to a huge audience and become well-known names. Approximately 123.4 million viewers watched the Kansas City Chiefs defeat the San Francisco 49ers, making the game the most-watched television program of all time. The massive advertising campaign during the Super Bowl garnered Temu a lot of attention on social media. Temu was the second most-mentioned Super Bowl advertiser of the year on social media platforms – after Verizon, which ran a commercial featuring Beyoncé.

Shipping companies saw an increase in Temu deliveries following its Super Bowl commercial. "We have definitely seen a very positive growth from Temu. It feels like it's more after the Super Bowl," said Andy Whiting, founder and CEO of the delivery company Better Trucks. E-commerce companies ship 10,000 tons of goods daily by air freight from China, and Shein and Temu account for more than 70% of the packages, estimated Steven Wang, CEO of the e-commerce logistics company Baixiao.

The massive advertising spending by Temu, Shein, and other players is driving up the prices for certain advertising spaces. "They are spending a lot of money on marketing," said Josh Silverman, CEO of Etsy, in November. "I think that these two players almost single-handedly have an impact on the cost of advertising, especially in some paid channels at Google and at Meta." The CEO of Pinterest welcomed the large expenditures during the company's earnings call for the third quarter. "Temu was a nice contribution – I won't name a specific one, but generally, Asian e-commerce exporters were a nice contribution. But we don't feel particularly focused or exposed there, as our retail strength was very broadly diversified," he said.

Some Tech Managers Hope That Temu's Rise in Advertising Spending Continues and Doesn't Wane Like Wish, the E-Commerce Platform Selling Low-Cost Products from China. Wish also once contributed to bolstering the ad revenue of tech giants with its extensive advertising budget, but eventually faded. Wish's advertising spending amounted to $195 million in 2022, far removed from the $1.6 billion the company spent in 2020.

Susan Li, Chief Financial Officer at Meta, told investors that Chinese advertising was strong this year, but the growth level from 2023 might be hard to repeat, as spending in 2022 was lower due to COVID lockdowns. She also emphasized that the market is broad-based. "Two thirds of our advertising revenue from China in 2023 came from advertisers outside the top 10 spenders in that country," she said. "Even within that, it's a diverse base of advertisers."