Google, Meta Ad Platforms Benefit From Temu's Push Into U.S.

PDD Holdings -- the Chinese parent company of ecommerce platform Temu, which launched in September 2022 -- reportedly spent nearly $2 billion on advertising last year at Meta, and has become one of Google's top five advertisers in terms of the amount spent on the platform. 

Since The Wall Street Journal reported last year that the market value of China-based PDD hit $193 billion -- surpassing Alibaba -- the media company has learned that its subsidiary Temu and other online shopping platforms with "Chinese roots are spending aggressively" to reach U.S. consumers.

As part of this effort, they are increasing digital advertising prices and "poaching logistics employees" to deliver products. 

Temu is now the fourth most-visited retail site in the U.S. behind Amazon, Walmart, and eBay, according to eMarketer.



Others have identified Temu as leading in the U.S. SensorTower ranks Temu at No. 1, while Shein ranks it at No. 2, Amazon Shopping at No. 3, Walmart at No. 4, Walmart at No. 5. and Shop App from Shopify at No. 6. There is no mention of Google Shopping or YouTube.

Colin Sebastian, analyst at Baird Capital, listed the ranking, and in February acknowledged in a research note that TikTok, Temu, and Shein were "aggressively investing in market share, which overlaps to a degree with retail searches."

SensorTower also estimates that 46% of Temu's digital ad spend in 2024 to date has gone to Facebook, 22% to Instagram, and 15% to YouTube.

Temu’s U.S. ad spend doubled in the six weeks leading up to Super Bowl LVIII, SensorTower estimates, but that increase in spend didn’t translate to growth in DAU. a metric that measures the percentage of monthly active users. 

Temu’s U.S. DAUs fell an average of -1% week on week during that same time period, a change from 2023 when DAUs increased an average of 10% WoW

“Temu is likely losing money on every sale, as it attempts to invest their way into a position in the marketplace,” Brian Wieser, an advertising analyst, told the WSJ. “If it doesn’t work, or if it decides that they’ve spent enough money on advertising,” it would act as a headwind for companies such as Google and Meta.

Wieser also said that spending from China is so broad that if Temu would pull back a bit, it probably will not make a "significant dent in Meta’s overall growth." 

Next story loading loading..