China's expansion overseas is leading to the revival of Meta Platforms? Reports indicate that Temu invested $2 billion in Meta Platforms last year, making it one of the top five advertisers alongside Alphabet-C.

On March 7th, media reports cited insiders as saying that Temu spent over $2 billion on Meta Platforms' advertising last year, making it the fifth largest advertising client of Alphabet-C based on expenditures.

While a Temu spokesperson disputed the $2 billion figure, they did not disclose the exact amount spent on advertising on Meta Platforms.

Since entering the US market in 2022, Temu's high advertising expenditures have caught Meta Platforms and Alphabet-C executives off guard.

During a recent earnings call after Meta Platforms' latest quarterly report, Zuckerberg bluntly stated that with the support of Chinese advertisers, Meta Platforms delivered its strongest financial report ever. Meta Platforms' CFO Susan Li stated that the significant revenue growth in the fourth quarter was due to the high spending by Chinese companies and AI-recommended video content. In simpler terms, Meta Platforms' revenue growth benefited from Temu's substantial advertising investments. Under the strong influence of the stellar earnings report, Meta Platforms witnessed a long-awaited surge, with its stock soaring by over 20% at the opening, propelling its market value to skyrocket by $200 billion overnight, setting a new record in the history of the U.S. stock market.

Goldman Sachs analysts previously pointed out that in 2023 alone, Temu spent approximately $1.2 billion on advertising within Meta Platforms, with some analyses indicating that the annual advertising expenditure could reach $3 billion.

As mentioned by Wall Street News earlier, data shows that in 2023, Temu became the second-largest advertiser after Amazon, and in the last few months of 2023, Temu's advertising spending even surpassed the long-established U.S. e-commerce giant Amazon.

Data from Sensor Tower also reveals that the substantial advertising spending on Temu is reflected in its user engagement metrics. In the fourth quarter of last year, Temu users spent an average of 23 minutes per week on the platform, surpassing Amazon and Walmart with 18 minutes and 14 minutes, respectively, establishing itself as the "king of user engagement."

Moving into 2024, the financially robust Temu shows no signs of slowing down its advertising spending, continuing to splurge extravagantly. Not only did it bombard viewers with brainwashing ads like "shop like a billionaire" six times before and during the Super Bowl, but it also offered giveaways worth $10 million.

Temu's Overseas Expansion Myth

Since entering the U.S. market in September 2022, Temu has shown astonishing growth, to the extent that other e-commerce platforms have expressed feeling pressured by its presence. According to HSBC's estimation, Temu is expected to gain a market share of 3-6% in developed markets in the United States, Europe, and Asia. In 2023, Temu is projected to contribute 23% of PDD's total revenue, with this number expected to rise to 43% in 2024 and surpass 50% in 2025.

HSBC's report points out that with its full-line low-price strategy ranging from clothing to children's toys and active marketing methods, Temu is expected to grow at the fastest rate compared to Alibaba, Shein, and Tiktok. By 2027, it is estimated to achieve a GMV of $140 billion. Temu's aggressive and efficient marketing activities, along with its strong execution capabilities, are the driving forces behind its robust growth:

"Despite only starting operations in September 2022, Temu has maintained exponential growth. In just one year, it has expanded from the United States to 49 countries, becoming the most downloaded shopping app globally.

We expect it to achieve a global GMV of $16.5 billion in 2023. Our estimates indicate that after just one year of operation, it has already gained a 1% market share in the United States."