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Temu Sales Triumph over Shein in US, with Daily GMV said to Hit $80 Millionge

According to media reports, Q3 Temu’s sales in 2023 have exceeded $5 billion. Especially in September, on the first anniversary of its launch, the single-day GMV even reached $80 million.

At this rate, with the arrival of "Black Friday" and Christmas, Temu may be able to exceed the annual GMV target of 15 billion U.S. dollars. According to CICC's prediction, this number can even reach $18 billion, which is equivalent to SHEIN in 2022. 60% of GMV.

About 9% of Americans shopped at Temu in the past year. In the world's largest consumer market, Temu's September GMV has approached SHEIN, which has been operating for more than ten years.

In one year, Temu was launched in 47 countries around the world. The app was downloaded 200 million times and 120 million people opened it in September, half of which were from outside the United States.

The development of TEMU from $Pinduoduo Inc.(PDD)$ also has long tail affects to $Meta Platforms, Inc.(META)$ & $Alphabet(GOOG)$

What is Temu, the app that asks users to 'shop like a billionaire'? - National | Globalnews.ca

Below a is some highlight on How much did the China e-commerce players (mostly Temu from $PDD) spend on META?

Based on some analysis, It is said that the $TEMU’s annual ads spend on $Meta Platforms, Inc.(META)$ is ~$4.5B.

$Meta Platforms, Inc.(META)$ 's financial disclosure:

Looking into Revenue Breakdown by Customer Location, most of the growth this year was driven by APAC (i.e. $TEMU).

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The disparity btw Customers and Users in North America and APAC began to expand notably in 4Q22 (coinciding with the onset of $TEMU's campaign!). Historically, this gap averaged around $1B per quarter (avg. $1.2B from 1Q21 to 3Q22), but has now surged to an all-time high of $2.9B in 3Q23.

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Assuming all the incremental was TEMU: then TEMU YTD ads spend on $Meta Platforms, Inc.(META)$ is $2.8B (of which $1.7B was spent in 3Q23 alone).

$Meta Platforms, Inc.(META)$ 's commentary points to a similar number: China ads rev in Q3 is ~$2.5-3B. Just TEMU alone is ~$1.8B. "In North America, we saw acceleration by 7 pt due primarily to strong demand from China advertisers".

• Assuming that’s 100% TEMU = $850M rev "In the EU, we saw that accelerate 21 pts. …demand from China advertisers and some benefit from currency tailwinds."

• Assuming that’s 90% TEMU = $1B rev "RoW accelerated 20 pts. Brazil was a strong contributor…increased advertisers' demand from China advertisers"

• Assuming that’s mostly Shein = $600M rev. "(Overall ads rev) even excl. China, advertisers revenue growth has accelerated nicely." Assuming that “nicely” = at least another 1pt of growth over the 12% growth last Q, so implied China rev = $2.9B in Q3

Putting it all together: TEMU est. annual ads spend on $Meta Platforms, Inc.(META)$ for 2023 is ~$4.5B (assuming Q4=Q3). This is wayyy higher than all the sellside estimates for TEMU ads spend of $1.5B.

TEMU also spends on $Amazon.com(AMZN)$ $Alphabet(GOOGL)$ and other platforms, so the total ads spend can be…$6B+? Such level of ads spend is unprecedented!

If we look at $Shein's speculated $2.5B yearly ad spend (with a GMV of $40B vs. TEMU's $20B run rate) or $Shopify(SHOP)$ 's peak e-commerce S&M of $2.5B (with a GMV of $75B), TEMU's outlay is staggering.

China's combined incremental ads spend on $Meta Platforms, Inc.(META)$ for 2023 is likely in the ballpark of $5-6B. While this might seem insignificant compared to $Meta Platforms, Inc.(META)$ 's anticipated ad revenue of $131B (a mere 4%), the potential influence on $Meta Platforms, Inc.(META)$ 's CPM cannot be overlooked.

Chinese advertisers, known for their aggressive campaigns, could inflate CPMs disproportionately. A 50% reduction of that $6B spend next year would account for 2% of growth, out of consensus 14% ad revenue growth.

Source: https://twitter.com/FredaDuan/status/1717673935448485955