Chinese e-commerce entity, Doeshas given a substantial increase to advertising revenues of Meta Platform Inc HALF AND Google parent company Alphabet Inc GOOGLE GOOG through its large advertising expenditure.
What happened: PDD holdings PDD, Temu’s parent company, is said to have spent nearly $2 billion on advertising on Meta last year, catching executives at the social media giant by surprise. Temu also ranked among Google’s top five advertisers in terms of spending, the Wall Street Journal reported, citing people familiar with the business.
While a Temu representative disputed the $2 billion figure, he refrained from disclosing the company’s spending levels to Meta.
Temu’s unexpected wave of publicity, launching in 2022, caught executives at both tech companies by surprise. The Chinese e-commerce platform’s strong ad spending not only increased digital advertising prices but also helped Meta and Google’s advertising businesses recover.
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Temu’s advertising spending has also significantly affected the shipping industry, with the company’s high volume of product deliveries proving to be a boon to the industry.
Advertising analyst Brian Wieser warned that if Temu decides to reduce its advertising, it could pose a challenge to tech giants like Meta. However, Wieser also noted that given the large spending coming from China, a Temu withdrawal would not significantly dent Meta’s overall growth.
Temu did not immediately respond to Benzinga’s request for comment.
Because matter: Temu’s aggressive ad spending strategy comes as the company is making strides in the e-commerce industry. In February, Temu made headlines with his “Shop Like A Billionaire” Super Bowl commercial, which attracted both positive and negative attention.
Temu’s rivalry with fast-fashion competitor Shein has also intensified, as it courts sellers formerly affiliated with Shein. The company’s strategic focus on the US market has led to substantial growth in traffic and sales, with 172 million app users and 43 million web visitors in one year.
However, potential challenges loom as US lawmakers contemplate a possible import ban on Temu due to alleged links to forced labor in China’s Xinjiang region. This has raised concerns among investors and market analysts.
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