Temu, owned by Chinese e-commerce giant PDD Holdings, has had a huge online advertising campaign in recent years to attract American shoppers to its website. With a large amount of spending on TV and Facebook advertising, the company has advertised clothes, jewelry, household appliances and electronics at bargaining prices.
This strategy is so effective that Temu has topped Apple's list of most downloaded free apps in the US over the past two years. According to data from SimilarWeb, a digital analytics and data company, Apple's Temu App Store downloads have fallen 62% in recent days.
Meanwhile, the 50-cent eyebrow advertisement and the 5-dollar T-shirt that once covered Google and Facebook have completely disappeared.
The tariffs from the Donald Trump administration have disrupted Temu's business model, along with the company's advertising strategy. Packages shipped from China are currently subject to a 145% tax rate, while one of the old terms, which allows shipments worth less than $800 to be exempt from tax to the country, will expire on May 2, 2025.
Temu and Shein, a fast fashion brand with Chinese relations, plan to increase prices to cope with tariffs. Both companies have posted announcements on their websites in recent days warning that they will increase prices next weekend.
The Temu app is currently ranked 69th in the list of leading free apps in the US, after continuously being ranked in the top 10, according to data from Sensor Tower.
A separate analysis by SimilarWeb shows that Temu's paid traffic, or search, display and social media advertising that drives traffic to the company's website, has fallen 77% since April 11.
Marketing firm Tinuiti found that 20% of US Google Shopping ad views were purchased by Temu on April 5. A week later, that number dropped to 0.
As of April 16, Temu is running six ads on Meta platforms in the US. In addition, Temu is running about 27,000 ads on Meta websites and apps globally, especially in Europe and the UK.
If Temu cuts online advertising, it will be at a disadvantage for Meta, as Meta's $7/132 billion in advertising revenue in 2023 will come from China.
E-commerce analyst Juozas Kaziukenas said he hopes Temu will advertise strongly in the US at some point, but for now, the company appears to be moving money to other markets.
