Temu Pulling Back from U.S. Market

Controversial shopping app TEMU is reportedly reducing its U.S. advertising efforts after seizing 17% of the U.S. market share through strategic ad tactics across Meta, Google and a memorable Super Bowl commercial spot. Industry pros estimate that Temu’s ad spend reached somewhere around $2 billion with Meta in 2023 alone.

This level of success has made them a lot of enemies including Amazon, Dollar Tree, and countless small businesses. The one they are most afraid of is the U.S. government. In light of the recent crackdown on TikTok, Temu’s parent company PDD is pulling back on its aggressive activity in the U.S. market.

The Wall Street Journal cited anonymous sources that said 60% of Temu’s sales came from the U.S. market in 2023. They expect to drop to 30% this year along with a substantially reduced advertising budget.

Why Is Temu Being Timid?

TikTok is a totally different business model than Temu so why would the shopping app pull back? The same data privacy concerns. Temu was name-checked by US lawmakers last year, calling it a “data risk,” as well as highlighting the alleged presence of forced labor in their supply chains.

Digital security professionals have long been raising the alarm around Temu, claiming the app exploits certain parts of mobile device operating systems that give it access to sensitive data including biometric information. PDD Holdings also operated the Pinduoduo shopping app that was pulled from app stores after it was alleged to contain harmful malware. 

If the U.S. government wanted to send a message with the TikTok ban bill then consider that message received. Temu and similar businesses like Shein would rather enjoy a smaller market share in the states if it means avoiding a total ban. 

The Upside?

Temu pulling back potentially means less competition when it comes to Meta and Google ads. This means lower prices for smaller businesses making these platforms more attractive and accessible for lower budgets.