Here's why Chinese e-commerce giant dropped $21M on 3 Super Bowl ads, offered $15M in promos

Chinese-owned e-commerce giant Temu dropped tens of millions of dollars on three Super Bowl commercials and offered $15 million in giveaways in hopes of getting a major leg up with US shoppers.

The 30-second ad spots during Super Bowl LVIII — when the Kansas City Chiefs clinched the Lombardi trophy after the game went into overtime against the San Francisco 49ers — cost brands a reported $7 million each, according to Bloomberg.

Thus, Temu spent an estimated $21 million on its three commercials aired throughout the Big Game, which touted the bizarre tagline “shop like a billionaire.”

The online discount marketplace also offered $15 million in giveaways, coupons and other promotions, according to CNN.

Temu — which is based in Boston and owned by PDD, the group behind Chinese online shopping giant Pinduoduo — also paid for two post-Super Bowl advertisements to air during CBS’s late-night programming, CNN reported.

It’s unclear how much Temu spent on its post-game ads.

Temu’s Super Bowl spend had its desired effect, according to Google Trends data, which showed that web searches for the app spiked when the commercials played.

Temu searches had been steadily declining since early July, Bloomberg reported, along with the company’s observed sales, which fell 2.5% month-on-month in December and 4.8% in January.

However, Temu saw impressive growth last year, when it made its Super Bowl ad debut after officially launching in the US in September 2022.

In 2023, Temu’s sales increased a staggering 805% at the start of the year and more than 50% mid-year, according to Bloomberg Second Measure data tracking, a subset of US credit and debit card transactions.

Temu’s explosive growth in January 2023 sales was four times more than the No. 2 spot, Elon Musk’s Space X, and far above e-commerce rival Amazon, which experienced 191% and 1.71% sales increases, respectively.

But in recent months, the number of Americans shopping on Temu has also fallen, according to the Second Measure data, as Temu has developed a reputation for long delivery times, unresponsive customer service and incorrect orders.

The company’s Better Business Bureau profile boasts a dismal 2.5 stars, with customers complaining that the site is a “scam.”

Other shoppers have raised concerns that the Chinese app poses a security threat to Americans. Some even suggested that the company should be barred from advertising during the Super Bowl because of its origins.

“TEMU ads for the Super Bowl. Selling fake products. HP says theyre not their stuff. Orders that never show up,” one X user said. “In what world does it make sense to allow a China, communist, dictator controlled company to compete with Amazon and Walmart? WAKE UP AMERICA!!!!!”

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“Freedom-loving” digital marketplace PublicSquare also weighed in: “Its shocking that we allow Super Bowl commercials from a company like Temu who has a long history of slave labor and funding of the Chinese communist party,” the company shared.

A late-January survey from Morgan Stanley offered cool comfort for Temu’s future: It found that nearly one-third of its users plan to shop less on the app over the next three months.

Only eBay and Etsy had weaker outlooks, according to Morgan Stalney’s findings, which were earlier reported on by Bloomberg.

Margins have declined in recent quarters and are expected to keep declining, according to Bloomberg, as PDD would have to continue offering steep discounts and rebates in order to grow rapidly in the US.

Profitability is a concern. Its just not a priority right now, Morningstar senior analyst Chelsey Tam said.

Representatives for Temu declined to comment on the company’s Super Bowl ad spend.