Investors looking for a read on trends had a field day with Super Bowl commercials. One takeaway: Temu’s big-bucks spending on U.S. advertising points to continued competitive pressures on other retailers.
Budget-oriented Temu flooded the zone on Sunday night with multiple ad slots pushing its “shop like a billionaire” slogan, marking a second year of spending millions on Super Bowl ads. That is a rarity for a Chinese company, but for Temu, owned by
PDD,
which operates Pinduoduo in China, a key rival to
Alibaba,
that is just part of the playbook.
Temu has ramped up a U.S. advertising push since its launch in 2022, coming second only to
Amazon.com
in spending on
Meta
Platforms’ Facebook last quarter, according to The Wall Street Journal, which cited data from Sensor Tower. According to J.P Morgan research, it is on track to spend $3 billion on marketing this year, the Journal reported.
This strategy looks to be playing out. Temu saw, by far, the greatest year-over-year holiday sales growth of any retailer in the U.S., albeit off a small base in 2022, according to research group Earnest Analytics.
Temu has emerged as a competitive threat not just to
Amazon
but also brick-and-mortar budget retailers like
Dollar General.
Even with analysts mixed over just how much pressure Temu will put on Amazon—the e-commerce giant’s latest outlook somewhat allayed competition fears from the Chinese rival,
Deutsche Bank’s
Lee Horowitz wrote in a note—the company’s Super Bowl spending will no doubt keep rivals on defense.
U.S. retailers attempting to assess the threat from Temu should look no further than China, where Pinduoduo has seen astonishing growth over the past year as shoppers have flocked to its cheaper platform amid an economic slowdown. Owner PDD has dethroned Alibaba as the most valuable Chinese e-commerce company.
PDD is clearly doing something right—the stock is up by a third over the past year and had risen 3.7% in early trading Monday—and Temu’s Super Bowl push is just one more bid to come out on top.
Write to Jack Denton at [email protected]
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