Chinese shopping app Temu made its first marketing push since launching in the United States on Sunday with two Super Bowl advertisements. The platform aims to bring social shopping, already a phenomenon in China, to North America.
Since launching quietly in the U.S. six months ago, Temu has climbed to the #1 position in Apple’sAAPL -0.4% app store shopping category, blowing past Shein, Amazon.com and WalmartWMT -0.3%. The company’s Super Bowl advertisement showed a young woman tapping to buy a red gown for under $10. She goes on to dance through the street, purchasing dozens of additional products as the app allows her to “shop like a billionaire.” Dollar-store pricing and cheap shipping are hallmarks of the platform, which offers customers the option to browse items available for less than $3. Another section of the site promises that everything is selling at discounts between 50% and 99%. The discount retail market is valued at $268 billion globally, according to payments firm Crone Consulting.
Temu is a subsidiary of Shanghai-based PDD Holdings, which also owns e-commerce app Pinduoduo. In celebration of the Super Bowl ad launch, Temu is giving away $10 million in prizes to users who download its app and play games to win even steeper discounts. Under the games is an infinite scroll feed designed to keep users browsing and buying. The first five items on display are from the advertisement and highlight how many have been sold already. Among these five items, nearly 4,000 purchases have been made since the ad aired.
Another way for users to win free gifts, free shipping or discounts is by inviting friends to join them on the platform. The recruiting of friends on the site opens the door for social shopping features already available on Pinduoduo. The key feature on Pinduoduo is team purchasing, where groups of users buying the same item can coordinate to earn larger discounts. The app’s shopping categories range from beauty products to industrial power tools, unlike Shein, which only sells clothing. Temu plans to expand to Canada in the near future, the company said earlier this month.
“There is no other platform that offers this same type of advantage of the supply-chain connection to low-cost producers and the team purchases to drive this multi-level marketing at the individual level,” says Richard Crone, CEO and founder of Crone Consulting.
In North America today, the closest thing to a social shopping app is Venmo, which displays public transactions on a social-media-like feed and offers a $10 bonus to users who refer friends to the platform. Instead of a flat referral fee, Pinduoduo offers continuous discounts through team purchases. In the third quarter of 2022, Pinduoduo pulled in $4.99 billion revenue by gamifying the shopping experience. It has surpassed both Alibaba and JD.com in terms of annual active users.
Super Bowl advertisements are notoriously expensive, costing up to $7 million for a 30-second feature. However, the big game draws millions of viewers and has been the most-watched TV event in the United States in recent years, making it an attractive advertising opportunity for brands.