One supply informed the Journal that Meta staffers joked that Temu has spent a lot on adverts on its platforms that it ought to thank the corporate by rewarding it with certainly one of its personal reward playing cards.
A spokesperson for Temu denied the $2 billion determine when contacted by Enterprise Insider however wouldn’t disclose the corporate’s promoting spend.
As the corporate is privately owned by Chinese language agency PDD Holdings, it does not should launch its financials. Consequently, little or no is understood in regards to the efficiency of the corporate.
Nonetheless, it is no secret that Temu has been going all out on its promoting campaigns to develop its attain within the US.
After launching on this area in September 2022, it made a splashy entrance on the 2023 Tremendous Bowl with an advert that invited shoppers to “store like a billionaire” on its app.
The message was that customers had the ability to purchase no matter they needed on Temu with out worrying about the price. It could be true — the shop is understood for its ultra-low costs on a large assortment of products.
Analysts say that these dear advert campaigns — together with spots on the 2023 and 2024 Tremendous Bowls — alongside its all-time low costs, probably imply the corporate is making a loss proper now.
Goldman Sachs estimated that its advertising spend alone contributed to a mean $7 loss per order in 2023, the Journal reported.
Whereas its technique to bombard customers with adverts and woo them with low costs appeared to repay initially as prospects flocked to the app, knowledge means that Temu could also be shedding momentum.
Noticed gross sales for Temu fell 12.5% month-on-month in December and 4.8% in January, per Bloomberg Second Measure knowledge.
The info confirmed that the variety of Temu customers within the US was additionally declining.
BI contacted Meta for remark however didn’t instantly hear again.
