Temu’s D-Day: The story behind its Super Bowl appearance

This article was originally published in Chinese by Runze Dai of Leiphone, translated and republished with permission. 

You can also refer to Momentum Works’ “Who is Temu” report for structured analysis and insights about this company. You can also read our book “Seeing the unseen: behind Chinese tech giants’ global venturing” for more case studies, analyses, and reflections. 

 

“Should we also make an appearance at the Super Bowl? Rihanna is making a comeback this year!”

On a cold winter day in January 2023, a group of people was passionately discussing products in Temu’s U.S. office. This not-so-loud suggestion instantly grabbed everyone’s attention. People stopped their tasks and engaged in the discussion about putting up an ad during the Super Bowl, covering every aspect ranging from the pros and cons to the nitty-gritty details.

When this unplanned project proposal reached Temu headquarters, the entire company was thrown into a frenzy. 

A Chinese internet company appearing at the American-equivalent version of the Chinese Spring Festival Gala (“美国春晚”) was a groundbreaking event that was unprecedented in the industry.

After intense internal debates, Temu ultimately made its debut at the Super Bowl. 

Following this, Temu experienced a surge in downloads and daily active users as if it had unlocked some hidden potential.

In just a short year, Temu’s has proved itself to the entire industry through its achievements. Its fully-managed consignment model even attracted emulation from industry giants like Amazon.

And all of this originated from a “spur-of-the-moment” stroke of genius.

 

1. An impromptu idea that came out of the blue

After 2022’s Black Friday, there was no air of victory in Temu’s office. 

Since its launch in September of the previous year, Temu’s expansion in the United States has been progressing moderately. Pinduoduo’s successful “social contagion” (社交裂变) strategy in China (a strategy that encourages individuals to share a brand’s content within their social networks, leading to rapid and organic spread like a viral phenomenon) seemed to be ineffective on American soil. The industry’s attitude towards Temu changed from mere observation and a mixture of disbelief and scepticism to mockery.

With ambitious plans from the get-go, Temu created its own fully-managed consignment model and launched the platform offering products across all categories. 

Drawing inspiration from Pinduoduo’s success in China, Temu promoted itself on social platforms such as Facebook, Instagram, Snapchat, Google, etc., with the aim of spreading its name through “social contagion” (社交裂变). The hope was that American users would recommend friends and family to download the app.

The short-term effects were impressive. In September 2022, Temu topped the daily download chart on the U.S. Google Play Store; in October, it ranked first on the App Store’s top free apps chart, and by November, it was among the top three downloaded apps on US App Store.

However, this model did not sustain its effectiveness. Although initially favoured by the first wave of America-based Chinese users, mainstream American users showed a more cautious attitude towards recommending the app to friends and family. Data revealed that the average number of successful downloads through referrals shared with friends and family by U.S. users was only 2, compared to 10 in China. Conversely, American users were more inclined to share about the app with strangers on social media like Twitter.

It seemed that Pinduoduo’s original strategy which was successful in China was not suitable for the U.S. market. The U.S. market was more receptive to promotional videos for low-priced products.

Temu had to adjust its existing model; otherwise, it would disappear from the industry in the blink of an eye.

Starting from January 2023, Temu targeted the various platforms of Meta and ran about 8,900 advertisements. The growth effect after the adjustment was very prominent. In that month, Temu’s total visits reached 74.52 million people, and the transaction volume reached US$ 200 million.

To capitalize on this success, Temu needed to find a platform with a larger traffic pool. It was a pure stroke of luck that the Super Bowl broadcast happened to coincide with Temu’s need for a platform.

Internet companies relying on top TV shows (for marketing) is not a new concept. Emerging internet companies were already advertising during the Super Bowl 20 years ago. In the Chinese market, Tencent introduced the WeChat Shake campaign (微信摇一摇) during the CCTV Spring Festival Gala (春晚) in 2015. Since then, for eight consecutive years, giants like Baidu, Alipay, TikTok, and Kuaishou competed to dominate the screens during the CCTV Spring Festival Gala.

The Super Bowl is hailed as the American version of the Chinese Spring Festival Gala, possessing extremely high commercial value. It not only attracts hundreds of millions of viewers but is also considered the “most important day in the entire American advertising industry”.

Thus, the idea of advertising during the Super Bowl, which was initially just a spur-of-the-moment inspiration, ended up as a proposal that was submitted to Temu headquarters.

However, Temu, at this point, had only been in existence for less than five months, with all processes still in the refining stage. Could it really handle the potential that will be brought by this super traffic pool?

 

2. A million-dollar advertising idea

Even though appearing at the Super Bowl at this moment is a golden opportunity, there are no precedents in the industry that Temu could draw upon. When the proposal reached the company, it sparked intense debates across various departments.

Supporters argued that advertising during the Super Bowl was a must while the opposition felt that this proposal was outside the scope of the business plan. With less than a month left until the programme aired, it seemed unrealistic to complete business communications, secure suitable advertising slots, plan content, and ensure promotional effectiveness in such a short time.

Moreover, with the tightening of U.S. regulatory policies on internet companies, Temu’s high-profile move might attract unnecessary policy troubles, taking examples from the experiences of companies like TikTok in the United States.

Seeing that both sides couldn’t convince each other, the decision was ultimately escalated to the senior management.

The proposal emphasized that, regardless of uncontrollable factors, the 2023 Super Bowl presented a tremendous traffic pool. The Super Bowl finals featured teams like the Philadelphia Eagles and the Kansas City Chiefs, with Rihanna making a comeback during the halftime show. Major American enterprises were competing for advertising slots; for instance, Apple spent $50 million, taking the halftime show’s naming rights from Pepsi. The ad prices for the Super Bowl set a historic record, hitting a price tag of $7 million for every 30 seconds.

This clearly indicated the incalculable commercial value of the 2023 Super Bowl.

What’s more, the audience for the Super Bowl highly overlapped with Temu’s target audience. Temu sells everyday products on its platform, and the Super Bowl audience, regardless of their income, age, or gender, falls within the scope of Temu’s user profile as long as they have shopping needs. Additionally, as an ecommerce company, Temu’s appearance at the Super Bowl would bring a fresh perspective to American users.

Moreover, given Pinduoduo’s good revenue situation in China, why not give it a try?

Perhaps being moved by everyone’s enthusiasm, the senior management immediately held a meeting with multiple teams after a short period of contemplation. The final decision was that Temu would appear at the 2023 Super Bowl, with full support from the company.

After this meeting, an ad hoc Super Bowl project team was immediately formed. In terms of execution, after breaking down the goals, the marketing team collaborated with local American advertising agencies to design advertising plans. The team in charge of user traffic worked in coordination with the domestic technical team to prepare for traffic responses on the day of the Super Bowl while the fulfilment team actively stocked up to ensure the ability to meet a large volume of order demands. 

The technical team in China followed the American team’s working hours, starting work in the afternoon and ending in the early morning. To ensure the progress of the project, some employees even slept directly at their workstations. This high-intensity work mode persisted from Temu’s launch up till its warehouse overstock (爆仓) incident in March 2023.

To draft a suitable advertising plan, the Temu team sought help from the well-known advertising agency Saatchi & Saatchi. The company is highly renowned in the industry and is a subsidiary of the world’s fourth-largest advertising communication group, Publicis Groupe.

After further discussions, both parties reached a unanimous decision: to create a persuasive and viral video that integrates the characteristics of Temu and Pinduoduo. The goal was to target the users’ innermost desires in a very short time and prompt them to download the app. Thus, the classic advertising slogan “Shop like a billionaire” was born. Rumours in the industry claim that this slogan is worth a million dollars.

However, after the completion of the advertising video, the team realized there was a disconnection between the content and the platform. In the video, Temu presented itself as a platform selling fashionable women’s clothing, but in reality, Temu products are mainly daily necessities. This would to some extent lower the user’s expectations and consequently impact user retention.

At this juncture, it was too late to modify the video. The team decided to temporarily set the issue aside and adjust their subsequent actions based on actual results after the programme aired.

 

3. From benchmarking against the predecessors to being emulated by the entire industry 

On 12 February 2023, Temu successfully debuted at the Super Bowl.

Its impact exceeded everyone’s expectations. Not only did it change Temu’s destiny but also quietly altered the entire industry landscape.

In March 2023, Temu experienced a warehouse overstock incident in China, leading to a series of operational issues. In addition to appeasing international logistics partners, there was also a need to balance the relationship between the fully-managed consignment model and the surge in SKU (Stock Keeping Units). 

Fortunately, the initial users brought in by the Super Bowl advertisement allowed Temu to make flexible and dynamic adjustments to both its marketing and fulfilment operations.

After the Super Bowl advertisement, the Temu team, through in-depth retrospective analysis, decided to increase marketing investment to achieve economies of scale.

In March this year, Temu sent a signal to the market by investing ¥20 billion (US$ 2.7 billion), with the aim of surpassing SHEIN’s North American GMV by 1st September. This information spread throughout the entire industry, attracting significant attention.

In terms of marketing investment, Temu went from benchmarking against SHEIN to “no upper limits”. Starting in July this year, Temu’s daily advertising expenses on Facebook and Google surpassed tens of millions of dollars. Such an astonishing investment has directly changed the entire landscape of cross-border ecommerce.

As the number one competitor to Temu, SHEIN has also invested aggressively in marketing. In August, SHEIN’s daily advertising expenditure on Facebook and Google reached US$ 8 million. Some suggested that SHEIN was learning Temu’s strategy, conducting large-scale strategic adjustments every two months, and improving its marketing strategy through analysis and retrospective results.

SHEIN even moved its user growth centre to Shanghai, where Pinduoduo is based, and set up an office directly opposite Temu’s, apparently for the convenience of recruiting Temu’s talent.

“When the giants fight, the industry suffers”. Many cross-border DTC (Direct-to-Consumer) companies found that advertising and marketing expenses increased sharply since May this year (2023). Temu and SHEIN also took up a large amount of cross-border logistics capacity, causing a surge in cross-border logistics fees.

Temu took only a few months to transition from imitating industry predecessors to being emulated by the industry.

In terms of results, Temu’s strategy of aggressive expansion proved effective.

Returning back to the broadcast of the Super Bowl, that night, Temu’s download volume increased by 45%, daily active users grew by 20%, and there were no issues such as lagging or crashes. The sustained popularity has also allowed Temu’s app downloads to surpass those of major U.S. retail giants like Target in early February.

Insiders revealed that Temu brought in approximately 20 million new users gradually, with an average cost of 7 RMB (US$ 0.96) per new user. In contrast, the costs of user acquisition by relying on online internet platforms were usually US$21 or higher. Temu also released a public statement, stating that the performance of the Super Bowl ad was ten times better than the average ad.

In May of this year, US consumer spending on Temu exceeded 20% of SHEIN’s. In August, Temu’s daily GMV reached a staggering $50 million. This seems to indirectly verify that when an ecommerce platform reaches a certain scale, its business economics begins to operate positively.

From this perspective, advertising during the Super Bowl is a very profitable venture for Temu.

Temu seems to have smoothly completed the first stage of its journey into the international market.

 

Conclusion

Temu’s debut at the Super Bowl is hailed as one of the classic marketing cases of 2023. 

Behind its success, there is a significant element of luck. If Temu had not adjusted its marketing and product selection strategies at the end of 2022, even encountering the opportunity of the Super Bowl would have been challenging to respond to immediately, let alone achieving the subsequent scale of impact.

At the same time, the success is also closely tied to Temu’s flat organizational structure and extremely high efficiency. From the first day of its launch, Temu presented a complete shopping experience on the front end, while the back end continuously expanded with the growth of traffic. This planned preparation and coordinated work allowed Temu to adapt to multiple adjustments and ensure the smooth progress of the project.

This is highly related to Temu’s powerful IT capabilities and the organization’s high density of IT talents. Currently, the Temu team has a total of 4,000 staff, with over 1,000 IT professionals, accounting for 25% of the employee pool. Such a high density of talent is very rare in the industry. This is also a reason why Temu had the confidence to boldly use Microsoft Cloud right from the start. From a technical perspective, Temu has already patiently awaited the arrival of high growth from the moment the company was initiated.

Temu has also demonstrated strategic diligence, precise execution, bold financial investment, and rapid iteration of the industry. The combination of multiple factors has propelled Temu like a juggernaut on its journey to globalization.