Tariffs lead Temu and Shein to cut digital advertising spending in the U.S., impacting American companies like Meta
Due to the United States terminating the tax exemption for small packages from China, Temu and Shein are significantly reducing their digital advertising spending in the U.S., impacting tech companies like Meta and Alphabet. According to data from Sensor Tower, Temu's daily advertising spending on social media has decreased by 31%, while Shein's has dropped by 19%. Both companies plan to raise product prices to cope with increased costs
Reuters New York, April 16 - Industry data shows that Temu, a subsidiary of Chinese e-commerce platform PDD, and fast-fashion retailer Shein, the two largest advertisers on U.S. social media, are significantly cutting their digital advertising spending in the U.S., which is a blow to tech companies like Meta's Facebook and Alphabet's YouTube.
Both online retailers sell low-priced goods made in China directly to U.S. shoppers and have recently been heavily advertising, targeting younger and more budget-conscious consumers through digital media. Due to the U.S. ending the tax exemption on small packages from China, which will increase costs for the companies, Temu and Shein plan to raise product prices next week.
According to two digital marketing firms that measure advertising spending, Temu and Shein are also cutting ad spending on most platforms.
Sensor Tower, which tracks such spending, estimates that from March 31 to April 13, Temu's average daily advertising spending in the U.S. on Facebook, Instagram, TikTok, Snap, X, and YouTube decreased by an average of 31% compared to the previous 30 days. During the same period, Shein's average daily advertising spending in the U.S. on Facebook, Instagram, TikTok, YouTube, and Pinterest decreased by an average of 19%.
Meta declined to comment. Google, Shein, and Temu did not immediately respond to requests for comment.
Mark Ballard, Director of Digital Marketing Research at Tinuiti, said that Temu has significantly reduced its advertising on Google Shopping since April 12
