Temu's market focus will shift! US advertising revenue will drop to 38%

In order to protect its rights, TikTok filed a lawsuit against the United States last week. The lawsuit has not yet been settled, but it seems to have shocked Temu and PDD.

Recently, it was reported that Temu's strategic focus is shifting from the United States to Europe and other markets. According to the staff of market intelligence company Sensor Tower, Temu's current advertising expenses are gradually shifting to Europe and other markets; as of April, Temu's advertising expenses in the United States accounted for only 38%, while it was as high as 63% in the fourth quarter of last year.

As the world's largest e-commerce market, the United States has always been valued by all sellers and platforms, and Temu is no exception. It is reported that the US market accounted for 60% of Temu's sales in 2024, and Temu has become one of the most popular e-commerce platforms in the local area.

Although the US market is important, with the downward trend of the US economy in recent years, US local protectionism has become increasingly serious - adjusting the "small exemption" policy and imposing various tariffs on Chinese products have made Chinese companies going overseas walk on thin ice.

Of course, there is more than one reason for a company to change its business strategy. Another important reason for Temu's shift in focus is that the growth of its US business has begun to slow down .

According to Sensor Tower data, the number of people in the United States who used Temu at least once a month in the first quarter of this year fell to 50 million, a 10% drop from the peak of 55.6 million in the third quarter of last year. At the same time, monthly users in other regions surged by 128%. There are also reports that sales in the US market are expected to account for less than one-third of Temu's total sales this year. Therefore, it is not surprising that Temu is looking to other markets to reduce its dependence on the US market.

Europe is another important destination for Chinese companies to expand overseas, so it is almost natural for Temu to make it a strategic focus.

According to the survey data released by the European agency Cross-Border Commerce Europe, the transaction volume of the European online cross-border market will reach 237 billion euros in 2023, an increase of 32% over the previous year; the cross-border turnover of online stores will reach 107 billion euros, and the online turnover of European B2C products will increase by 13% to 741 billion euros. From this point, it can be seen that Europe is a good choice.

Temu is also developing strongly in Europe. For example, in the UK and France, Temu has become one of the top five online retailers, with more than 11 million monthly visitors; in Germany and Italy, Temu is also in the top five, with millions of visitors per month; in Hungary, Temu has more than 1.2 million users, and the number of orders in the first quarter of this year reached 1.58 million.

However, Temu's "European journey" was not smooth sailing. For example, the European market already has mature e-commerce platforms with stable customer bases, such as Amazon, eBay, and Zalando; at the same time, there are various cultural differences between European countries, so the company also needs to make different adjustments in promotion and operation strategies; there are also complex local regulations and policies, such as the EU's stricter supervision of super-large online platforms (45 million monthly active users) - Temu currently has 75 million monthly active users in Europe.

However, the emphasis on other markets does not mean that Temu no longer attaches importance to the U.S. A Temu spokesperson said that although the company is expanding into other regions, it does not mean that the U.S. market is unimportant; it is a mistake to confuse global growth with the decline in the importance of the United States, and it is also a misunderstanding of the company's strategy.

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