The Chinese commerce giant Temu made another big push to conquer the American market during the Super Bowl. It released three ads during the big game, hoping to capture the huge e-commerce market and turn Americans away from Amazon.
Temu has been capturing Gen Z with its product selection and pricing. Based on a smartphone experience, the app is seen as addictive and Tik Tok like in its scroll feature. CNN says:
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.
Beyond its impact on the consumer markets, Temu is also exerting influence on American digital companies. Meta for instance made 10% of its revenue from Temu advertising. This close integration between American tech and Chinese manufacturing could have national security implications. Reuters explains:
U.S. companies that depend on commercial spending, like Meta Platforms (META.O), opens new tab, are being saved by Chinese retailers like Temu and Shein. They represented 10% of Meta’s revenue last year, the Facebook owner said. And as the social media firm takes on competitors with China-based parents, like TikTok, the ammunition should help.
Amazon.com (AMZN.O), opens new tab is a different story. It reduced fees it charges merchants recently, putting up to $350 million of revenue at risk from lowered take rates, according to Bernstein. That helps it fend off antitrust complaints. But given the company led by Andy Jassy is trying to make strides with its retail operating margins, which hit a slim 2.5% last year, Chinese competition will only intensify his efforts.(By Jennifer Saba)
Amazon has slowly been solidifying its grip on the US retail market, but is starting to see serious competition. Beyond Chinese firms like Temu, Amazon also has to grapple with Shopify’s app, which has a cleaner interface that small businesses are interested in using. PayPal and other financial companies are also integrating shopping with their own rewards program.
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