If one Super Bowl ad is enough to generate buzz, are five ads even better? If you’re Temu, the answer is unequivocal: More is better.
Unless you’ve been shielding yourself with an ad blocker over the past year, you’ve likely seen dozens (or thousands) of ads for Temu hawking products for suspiciously low prices. But even though the ads are helping acquire new customers, the discount shopping app is losing boatloads of money, an estimated $30 per order, to attract new customers and ship them products directly from China. Temu’s bet is that consumers will sidestep Amazon for the orange app’s low prices and shipping guarantees.
But the math doesn’t quite add up. Even people outside the ad business don’t get it; “Is Temu legit?” or “Is Temu safe?” are among the top fill-in-the-black searches for the retailer. And if you scan social media, jokes about Temu’s product quality are rampant. Could Temu be Wish 2.0? After spending more than $1 billion in advertising in 2021, the site faded and its stock cratered. Wish’s bad business practices, often motivated by a desire to acquire customers, compromised its ability to keep customers long term.
Temu’s data privacy practices are concerning, too. If Temu says, “Our privacy practices are in line with industry standards,” but it’s caught misusing customer data, it risks polluting the ad ecosystem. In 2018, the Cambridge Analytica scandal not only tarnished the reputation of Facebook but the rest of the ad industry by association.
Like TikTok, which is also owned by a Chinese parent company, legislators are already raising questions about the company’s data practices. A class-action lawsuit in Illinois over its data practices is pending. In March 2023, Google suspended the Pinduoduo app from its Google Play app store after finding issues with malware in the app. Because Temu is a money-losing operation, there’s open speculation that consumer data is the true prize.
Only time will tell Temu’s fate. Meanwhile, we’ll be tracking the plays of the orange app like the Big Game – even if we aren’t sure what the company considers its end zone.
Update: Temu responded to say it does care about privacy and security, with the following statement: “Temu considers privacy and security to be core functions of our platform. Earning and keeping the trust of our users is our top priority, so we hold ourselves to the highest privacy and security standards.”
