The influence of the emerging e-commerce platform TEMU in the global market is closely tied to the significant traffic generated by its extensive advertising efforts. Whether through social media, paid search, or traditional television channels. Multi-channel lavish advertising expenditures and the Super Bowl, the spending spree shows no signs of stopping.
From January to November 2023, TEMU’s advertising expenditures saw a staggering year-on-year growth of 1000%. Among these, 76% of the advertising budget was allocated to social media, while display ads on digital media accounted for 13%.
TEMU has further invested marketing funds in the television sector, planning to advertise during the Super Bowl event for the second consecutive year in 2024.
Over the past year and a half, TEMU has achieved significant sales growth by advertising on platforms such as TikTok, Instagram, Google, and others. Research data from MediaRadar also indicates that from September 2022, when TEMU entered the US market, until December 2023, its advertising spending exceeded 517 million US dollars. In the last quarter, the total revenue reached 9.67 billion US dollars (approximately 68.84 billion RMB), with a year-on-year growth of 94%. Looking ahead to the advertising plans for 2024, TEMU has no intention of slowing down its continuous spending.
Like SHEIN, TEMU has adopted a “blitzkrieg” digital marketing strategy to acquire new customers. According to estimates by Goldman Sachs analysts, TEMU spent about 1.2 billion US dollars on Meta’s advertising in 2023, with 8,900 ads placed on Meta in January alone. In February 2023, TEMU continued its marketing plans by airing its first ad during the “American Spring Festival Gala” Super Bowl event. The 30-second ad showcased its iconic concept – encouraging consumers to “Shop like a Billionaire,” this advertising move further brought TEMU into the spotlight.
Over 100 million people will watch the Super Bowl the following month. It is estimated that TEMU’s associated advertising costs may reach as high as 7 million US dollars.
Additionally, TEMU has invested in Google paid search, showcasing its products alongside well-known brands such as Apple chargers and Stanley glass cups. Mike Ryan, Director of E-commerce Insights at Smec, an e-commerce solutions provider, stated on social media that TEMU’s Google search shopping results are even more than the well-known building block brand Lego.
On the short video social media platform TikTok, the hashtag #TEMU has 11 billion views. TEMU has also designed a social media influencer program for creators with over 300 followers and claims to have collaborated with over 10,000 creators.
Nowadays, global consumers browsing the internet are unlikely to miss TEMU’s advertisements. Rapid growth reveals the essence: a significant increase in user engagement reshaping the advertising landscape.
Independent e-commerce analyst Andrew Lipsman states that in September 2022, TEMU’s ratio of daily active users to monthly active users was 9%, while in October 2023, this ratio increased to 20%. He sees this as a positive sign, indicating a rising level of user stickiness for TEMU.
Estimates from GWS Magnify show that in September 2023, 82.4 million active consumers were using TEMU’s application, surpassing the 4.6 million from the same period in 2022. Google Trends shows that TEMU’s global web search volume has grown 788% over the past 12 months.
In addition to advertising expenditures, TEMU has fundamentally altered the operating dynamics of the advertising landscape. TEMU and another Chinese e-commerce platform, SHEIN, have “steamrolled” competitors with low advertising prices, driving up customer acquisition costs, especially in the prominent advertising markets of Google and Meta. During the November 2023 earnings call, Etsy’s CEO declared that TEMU and SHEIN had a significant impact on advertising costs almost single-handedly.
According to a report from Google to ad buyers, advertising agency Tinuiti found that 90% of its advertisers are competing with TEMU to purchase Google Shopping ads. These retailers now consider TEMU to be a competitor on par with Amazon. TEMU’s frenzied spending on Google ads will continue until the first half of 2024.
Eric Suefert, the founder and industry analyst of Mobile Dev Memo, anticipates that SHEIN and TEMU will continue their aggressive advertising spending throughout 2024, but the vibrant investment may cool off in 2025 as their market sales depend on aggressive advertising strategies; a halt in advertising may lead to a decline in sales.
Over the years, the e-commerce platform Wish has invested millions in Meta advertising, continuously promoting inexpensive products. However, when Wish ceased advertising purchases, platform sales plummeted.
Analyst Eric Suefert also points out that platforms can maintain sales without extensive ad purchases by using consumer data to build marketing products, such as targeting existing consumers through email databases. He suggests that if platforms collect consumer behavior data and promote high-inventory products, they may need to rely less heavily on advertising.
Juozas Kaziukenas, the founder and CEO of e-commerce research firm Marketplace Strategy, highlights that e-commerce platforms may spend more on advertising in 2024 but may only achieve a similar number of users.