Temu Expands into Advertising Sector
Temu is entering the advertising market as part of a broader strategy to compete with e-commerce giants and mitigate potential risks associated with tariffs on Chinese imports. The move could also help the company protect itself from the impending end of the ‘de minimis’ exception in the US.
The company has initiated a pilot program, testing paid search ads for sellers looking to increase their product visibility on the platform. The model is based on a cost-per-click system, where sellers pay each time a user clicks on their ad.
The pilot program primarily targets local sellers in the US, with some participation from sellers in China and other regions. Despite the ongoing tests, Temu has not announced a specific launch date for its advertising service.
Parent company PDD Holdings has significant experience in the advertising sector, generating 49.35 billion yuan (approximately $6.98 billion) in advertising revenue in the third quarter of 2023. This figure represents almost half of Amazon’s earnings from its advertising business during the same period.
Global Growth Strategy
Despite regulatory challenges, Temu continues to advance its global growth strategy, with high expectations for the US market. Projections indicate that the company’s sales could grow by 59% this year, reaching $30.83 billion and surpassing Walmart’s marketplace size.
Temu’s push to add more US sellers not only mitigates tariff and regulatory risks but also opens up opportunities to strengthen its advertising business. The company’s ultimate goal is to become a global player capable of competing with Amazon in terms of sales and offering a comprehensive ecosystem of tools and services for sellers.
Expanding Advertising Services
Temu’s entry into the advertising sector is a strategic move to diversify its revenue streams and offer more value to sellers on the platform. By providing a range of advertising services, the company can help sellers increase their product visibility and sales, ultimately driving growth and revenue for the platform as a whole.