Chinese Temu Dominates US Super Bowl... $9 Million Spent on 30-Second Ad

199 Billion KRW Invested in Prizes and Coupons
Stopping User Churn and Targeting the US Market

Temu, a Chinese online shopping mall company, has drawn attention for pouring tens of millions of dollars into advertising during the NFL championship game, known as the 'Super Bowl,' the largest sports festival in the United States. They made an unusually aggressive investment by spending over 9 billion won on a single 30-second TV commercial.

On the 12th (local time), Bloomberg reported that Temu aired six TV commercials during the Super Bowl game on Sunday evening and offered promotions including prizes and coupons worth $15 million (about 19.9 billion won).

This year, the Super Bowl advertising rate on the CBS TV channel was reported to have risen to $6.5 million to $7 million (about 8.6 billion to 9.2 billion won) per 30 seconds, higher than last year. Despite the notorious advertising costs, Temu invested tens of millions of dollars without hesitation. Temu stated in a press release, "This advertisement will be the highlight of the Super Bowl campaign, which offers more than $15 million in coupons and prizes."

Advertisement launched by Chinese e-commerce company Temu during the Super Bowl. (Photo by Temu)

Despite paying expensive advertising fees, Temu emphasized the characteristic of being a low-price shopping application (app). Animated characters were shown filling a house with items such as a $10 (13,000 won) toaster and a $6 (8,000 won) skateboard using the Temu app, promoting the message to "shop like a billionaire." It highlighted the ability to buy inexpensive products freely, like a billionaire shopping without worrying about money. However, unlike selling low-priced products, Business Insider and The Wall Street Journal (WSJ) pointed out that "while urging viewers to consume like billionaires, Temu ironically acted in a way unbefitting of a billionaire" by enduring the costly advertising expenses.

Temu's entry into this kind of bleeding competition appears to be a strategy to solidify its recently shaky market share in the United States. Bloomberg noted, "Temu showed significant growth last year, but in recent months, some U.S. users have been leaving." Additionally, Morgan Stanley recently announced in a survey that one-third of current U.S. Temu users intend to reduce app usage in the near future. The long delivery times for products shipped to the U.S. are cited as a cause of low customer satisfaction.

Prize advertisement promoted by Temu during the Super Bowl period. (Photo by Temu)

To overcome this situation, Temu opened its wallet for Super Bowl advertising, which reaches up to 200 million viewers. CNBC analyzed, "It is rare for a Chinese company to purchase a multimillion-dollar Super Bowl ad," but added, "It shows how aggressively the parent company Pinduoduo is targeting the U.S. market."

U.S. media and experts predicted that this Super Bowl advertisement would be effective. Temu also ran Super Bowl ads last year and continues to invest in social networking services (SNS) such as Facebook. Business Insider stated, "Temu's spending has already paid off. As of January this year, the monthly active users reached 51 million, nearly a 300% increase compared to the previous year," and evaluated, "Now Temu's challenge is to increase its market share in the U.S. e-commerce market to compete with players like Amazon."

In fact, Google Trends revealed that web searches surged during the airing of Temu's ad on Sunday evening's Super Bowl, and USA Today emphasized, "Temu ranked second among the most downloaded free apps on Monday, the day after the ad aired."