China’s Temu to run second ad, $10 million giveaway

Temu, the e-commerce app run by Chinese company PDD Holdings, plans to run a Super Bowl ad on Sunday, a spokesperson told CNBC, as it looks to continue growing rapidly in the United States.

It’s rare for a Chinese firm to buy a Super Bowl ad spot, which costs millions of dollars. But this will be Temu’s second ad at the football event — it ran its first commercial last year, underscoring how aggressively its parent company PDD is 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 already underway. On the day of the Super Bowl, Temu plans to do an additional $10 million in giveaways, the spokesperson said.

The spokesperson offered no more details on the contents of the ad or the price paid for the spot.

Temu launched in September 2022 and shortly after aired its Super Bowl ad in 2023. That commercial features a young woman amazed at the cheap prices on clothing and accessories that Temu has to offer.

“The prices blow my mind. I feel so rich. I feel like a billionaire. I’m shopping like a billionaire,” goes the ad’s jingle.

In a survey of 150 people carried out by market research firm Zappi, 51% said they “loved” last year’s ad, giving it a score of eight or more on a 10-point scale. That number is in line with the average of other ads that Zappi conducted surveys for. However, 21% of respondents “hated” the ad, giving it a score of four or less on the same scale. That’s significantly above the average, Zappi said. More than one in three (34%) of viewers found the claims made in the ad not to be believable.

Still, Temu is continuing to spend big on marketing to acquire users via platforms like Facebook. Temu’s U.S. ad spend increased 318% and 101% year on year in the fourth quarter of 2023 on Meta-owned Facebook and Instagram, respectively, according to data from Sensor Tower.

And that spending has paid off. Sensor Tower said Temu was the No. 1 most-downloaded app in the U.S. last year. Temu’s monthly active users reached 51 million in January, up nearly 300% year on year.

Temu’s challenge now is to retain those users and increase its share of the U.S. e-commerce market as it looks to take on players like Amazon.

Morgan Stanley said in a note to clients last month that according to its survey, the number of households shopping on Temu was 20% lower in January than in September. The investment bank also said any U.S. share gains in 2024 will likely be “modest” and that growth “may be more reliant on capturing a higher share of its existing shoppers’ wallets.”