Monday, June 17, 2024

Online superstore Temu doubles down on Super Bowl with TV ad and $15 million in giveaways

A year after making its advertising debut at the Super Bowl, Chinese-backed online shopping platform Temu is redoubling efforts in its most important market with a second ad on America’s biggest stage and $15 million in coupons and other giveaways.

The Boston-based firm — owned by PDD (PDD), the group behind Chinese online shopping giant Pinduoduo — paid for three ads during the game and two after the game. A spokesperson declined to comment on the overall advertising spend.

Commercials for the 2024 Super Bowl sold for higher rates than for last year’s game, with a range of $6.5 million to $7 million per 30-second spot broadcast on TV channel CBS, two individuals familiar with this year’s advertising sales told CNN.

With a tagline urging consumers to “shop like a billionaire,” Temu’s ad features an animated shopper dancing her way through bargains ranging from 99 cents to $9.99 in price.

“The commercial marks the highlight of a Super Bowl campaign that featured more than $15 million in coupons and giveaways,” Temu said in a statement.

A focus on rapidly gaining market share, with less concern for profit margins, that’s central to Temu’s strategy has previously worked out well for retail giants Amazon (AMZN) and Wayfair (W), according to Seema Shah, vice president of research and insights at market data firm Sensor Tower.

“Temu’s value positioning, the gamification of its app, the increase in ad spend, its vast assortment, and its close supplier relationships are what we believe is driving the company’s growth,” Shah said. “Given the size of its parent company, Temu can be extremely price-competitive on a year-round basis and deliver products quickly, even as it expands in new geographies.”

The company launched in the United States in September 2022, a few months before its first ad at the Super Bowl, and has since expanded to more than 15 countries, including the United Kingdom, Mexico, Germany, and Australia. Sensor Tower says Temu’s app was the eighth-most downloaded globally last year and number one in the United States.

The data company told CNN that Temu had “completely captivated consumers over last year,” racking up 51 million monthly active users in January alone, up nearly 300% from 13 million in the same month last year. It has spent aggressively on advertising and was the second-biggest spender on Facebook during the last three months of 2024, second only to Amazon, Sensor Tower said.

Those efforts appear to be paying off. Earnest Analytics says the upstart has “shaken up” America’s discount sales industry by attracting shoppers from Dollar General (DG) and Dollar Tree (DLTR).

Temu’s success is also seen as a major factor in the recent rally in the stock of its parent PDD, which doesn’t break out the earnings of its international venture. PDD reported blockbuster third-quarter earnings in November, smashing analyst expectations.

As a result, PDD’s market capitalization soared that month, eclipsing that of older e-commerce rival Alibaba (BABA) for the first time. In response, Alibaba’s co-founder Jack Ma called for “change” at his company.

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