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Temu, the e-commerce application of the Chinese company PDD Holdingsplans to run a Super Bowl ad on Sunday, a spokesperson told CNBC, as it appears to continue growing rapidly in the United States.
It is rare for a Chinese company to buy a Super Bowl ad, which costs millions of dollars. But this will be Temu’s second ad at the soccer event: He released his first commercial last year, underscoring how aggressively his parent company, PDD, is trying to enter the U.S. market.
In addition to the commercial, Temu will give away $5 million in coupons and credits, an initiative that is already underway. On Super Bowl day, Temu plans to donate an additional $10 million, the spokesperson said.
The spokesperson did not offer further details about the content of the ad or the price paid for the ad.
Temu launched in September 2022 and shortly after aired its Super Bowl ad in 2023. That commercial features a young woman amazed by the affordable 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,” says the ad jingle.
In a survey of 150 people by market research firm Zappi, 51% said they “loved” last year’s ad, giving it a score of eight or higher on a 10-point scale. That number is in line with the average of other ads 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 average, Zappi said. More than one in three (34%) of viewers found the claims made in the ad not credible.
Still, Temu continues to spend heavily on marketing to acquire users through platforms like Facebook. Temu’s US ad spend increased 318% and 101% year-over-year in Q4 2023. Goal-owned by Facebook and Instagram, respectively, according to data from Sensor Tower.
And that spending has paid off. Sensor Tower said Temu was the number one most downloaded app in the US last year. Temu’s monthly active users reached 51 million in January, up almost 300% year-on-year.
Temu’s challenge now is to retain those users and grow 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 buying in Temu was 20% lower in January than in September. The investment bank also said that any gains for US stocks in 2024 will likely be “modest” and that growth “may depend more on capturing a greater proportion of the wallets of their current buyers.”