Temu, a Chinese marketplace, has made a dynamic and aggressive foray into Western markets, characterized by extremely low prices, an engaging app experience, and heavy investment in digital advertising. Smec has gathered data from over 800 Google Ads ecommerce accounts and, quarter by quarter, tracked the percentage of advertisers facing Temu as an account-wide competitor. For comparison, Smec held Temu against two of the biggest advertisers we've ever seen: Amazon and Wish.
Let's unpack the insights:
đ Market Leader: Since Q4 2018, Amazon has been the top advertiser in Europe.
đŻ Consistent Competition: Competes with 70-80% of Google Ad Accounts.
đ§ Brief Hiccup: The only dip was a short advertising pause during the pandemic.
đ Initial Tests: Wish began testing Google Ads in 2019, then expanded massively in 2020.
đĽ Rapid Decline: After reaching Amazon's competition level, Wish imploded in 2021.Temu's Rapid Rise
⥠Sudden Impact: Since Q2 2023, Temu has made a significant entrance without a visible testing period.đ Quick Equalizer: Reached the same competitive level as Amazon within two quarters.
đ Early Indications: Like Wish, Temu has started to show signs of slipping in Q1.
đ§ Strategic Adjustments: Even though it could look like Wish trajectory, as Temu model is different it is rather that Temu is testing higher marketing efficiency, operating with a modest budget, narrowing their product range, or pausing before a new push.
đĄď¸ Sturdy Model: Unlike Wish, Temu is supported by PDD Holdings, suggesting potential for sustained aggression due to large PDD coin coffins. Temu model comparing to Wish allows for more control in Pricing and control over inventory without risk of unsold items (as it is return to supplier)
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