Why Temu dropped $21 million on three Super Bowl ads

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by Shannon Saylor

Chinese-owned e-commerce giant Tem spent tens of millions of dollars on three Super Bowl commercials and gave away $15 million in giveaways in hopes of reaping big rewards for U.S. shoppers.

According to Bloomberg, a 30-second ad spot during Super Bowl LVIII (when the Kansas City Chiefs won the Lombardi Trophy after the game went into overtime against the San Francisco 49ers) featured 700 ads for each brand. It is reported to have cost $1,000.

So Tem spent an estimated $21 million on three commercials that aired during the big game, promoting the bizarre tagline, “Shop like a millionaire.”

According to CNN, the online discount marketplace offered as much as $15 million in giveaways, coupons, and other promotions.

Temu, which is based in Boston and is owned by PDD, the group behind Chinese online shopping giant Pinduoduo, also paid for two post-Super Bowl ads to air on CBS late night, CNN reported. Reported.

It's unclear how much Temu spent on post-match advertising.

Google Trends data showed that Tem's Super Bowl spending had the desired effect, with web searches for the app spiking after the commercials played.

According to a report from Bloomberg, the number of searches for Temu has been steadily declining since early July, and the company's observed sales were down 2.5% month-on-month in December and 4.8% in January.

But Temu saw impressive growth last year after officially launching in the U.S. in September 2022 and making its Super Bowl advertising debut.

According to data tracked by Bloomberg Second Measure, which tracks a portion of U.S. credit and debit card transactions, Temu's sales in 2023 are expected to grow by a staggering 805% at the start of the year and more than 50% by mid-year. showed that.

Temu's explosive sales growth in January 2023 is four times faster than No. 2 Elon Musk's SpaceX and far ahead of e-commerce rival Amazon, whose sales rose 191% and 1.71%, respectively. exceeded.

But the number of Americans shopping at Temu has also declined in recent months, according to data from Second Measure. This is because Temu has a growing reputation for long delivery times, unresponsive customer service, and incorrect orders.

The company's Better Business Bureau profile boasts a dismal 2.5-star rating, and customers have complained that the site is a “scam.”

Other shoppers have expressed concern that Chinese apps pose a security threat to Americans. Some argued that advertising during the Super Bowl should be banned because of the company's origins.

“Super Bowl TEMU ad. They are selling counterfeit products. According to their website, these are not their own.””Orders that never show up” says X user Said. “What kind of world would we allow companies controlled by China, communism, and dictators to compete with Amazon and Walmart? Wake up America!”

“Freedom-loving” digital marketplace Public Square opined similarly, writing, “Allowing a Super Bowl commercial from a company like Tem, which has a long history of slave labor and funding the Chinese Communist Party, is shocking.” said the company. Shared.

A study conducted by Morgan Stanley in late January provided some cool reassurance about Temu's future. It found that nearly a third of users plan to shop less on the app over the next three months.

According to the Morgan Stalny survey, which was first reported by Bloomberg, only eBay and Etsy had a worsening outlook.

Margins have declined in recent quarters and are expected to continue to decline, according to Bloomberg, and PDD will need to continue offering deep discounts and rebates to grow rapidly in the U.S. It is said that it is for a reason.

“Profitability is a concern, but it's not a priority at this point,” said Chelsea Tam, senior analyst at Morningstar.

A representative for Mr. Tem did not immediately respond to The Post's request for comment.