Temu returned to the Super Bowl on Sunday, with multiple ads pitching its e-commerce platform as a way to "shop like a billionaire." While some critics panned the look of the animated ads, shares of Temu's Chinese parent company PDD Holdings traded higher Monday.
On the stock market today, PDD climbed more than 3% to close at 131.57. PDD stock is expected to get a boost from recent reports highlighting Temu's plan to keep spending big to win market share from Amazon and others.
Prior to the big game, the Wall Street Journal reported that Temu was the fifth-biggest digital advertising spender in the final three months of 2023. The finding, based on data from research firm Sensor Tower, underscored how the relative newcomer has spent big to add customers. JPMorgan analysts expect Temu will spend $3 billion on advertising this year, as cited in the Wall Street Journal report.
Launched late in 2022, Temu racked up 123 million app downloads in the U.S. alone last year, according to separate data from Sensor Tower. That was tops among all apps by a wide margin. Parent company PDD Holdings has spent big to run Temu product ads on Meta's Facebook and Instagram in particular. PDD, which has a market capitalization of just under $180 billion, also owns the China-focused e-commerce company Pinduoduo.
Temu: Will Super Bowl Ads Pay Off?
The Super Bowl is the latest beneficiary of PDD's largesse. Temu ran three ads during the game. Super Bowl placements cost a reported $7 million for 30 seconds.
Still, that pales in comparison to the $1.2 billion that Temu spent on Facebook and Instagram last year, based on previous estimates from Goldman Sachs.
Along with the Super Bowl ads, Temu launched $15 million worth of coupons and giveaways tied to the game, a spokesperson told CNN.
However, the animated commercial drew some groans. A Washington Post roundup gave Temu the superlative of most annoying jingle. Rolling Stone said it is all-for companies giving Amazon some competition, but pleaded "for the love of all things holy please let it happen without forcing our eyeballs to watch one more Temu commercial."
But the commercial did get people talking on social media. Research firm EDO found that one of Temu's spots drew more than 1,000% more online engagement than a typical Super Bowl ad. That ranked fifth among all commercials (an ad for the new Deadpool and Wolverine movie got people talking most, per EDO).
PDD Stock: Down In Recent Weeks
This is the second straight Super Bowl with a Temu ad. Last year, the company used the stage to catapult itself as a new challenger to Amazon's e-commerce dominance. But Temu's rocketing growth could be "cresting" in the U.S., according to a Morgan Stanley analyst report late last month.
The company also faces potential tax and regulatory challenges. A group of Republican lawmakers called on CBS to drop Temu's ad ahead of the game, alleging the company had shown a "pattern of noncompliance toward illicit products entering the United States market." A Temu spokesperson called the charges unfounded in a statement to CNBC.
Further, broader questions about the strength of China's economy helped push PDD stock lower in recent weeks after a red-hot 2023.
With Monday's early action, PDD stock has nearly retaken its 21-day moving average, according to MarketSmith charts. Shares are down just under 10% in 2024. Last year, PDD stock jumped nearly 80%.
