Chinese e-commerce giants are navigating a challenging landscape as they balance discounts and profitability amid a cautious consumer spending environment in China due to economic slowdowns. Specifically, Alibaba and JD.com have responded to consumer demand for lower-cost shopping options, which may lead to reduced profit margins. Concurrently, Temu, a Chinese-owned bargain app popular in the U.S., is shifting its business focus from the American market to Europe and other regions. This strategic pivot is influenced by slowing growth in the U.S. and increased scrutiny akin to that faced by TikTok. According to Seema Shah from market-intelligence firm Sensor Tower, Temu has significantly adjusted its advertising expenditures, reducing its U.S. ad spend from 63% in the fourth quarter of 2023 to 38% by April 2024, as it seeks to diversify its user base and reduce reliance on American consumers.
Alibaba has a fight on its hands. Temu and Shein have outspent it on logistics and marketing abroad, especially in America. A big push there could rack up losses and upset jittery investors. In China, the online economy is slowing https://t.co/OGHGwq510n 👇
"Chinese consumers are seeking discounts and lower-cost shopping bc of their cautious attitude toward spending after covid amid lower economic growth & slowdown in property. BABA and JD have responded to this trend but they risk lower margins by doing so." https://t.co/QYmYbe6oug
🇺🇸 Temu cools on the US after shelling out billions: App looks to reduce reliance on American shoppers as growth slows and scrutiny of TikTok grows https://t.co/15snwSb9FG
Sources: after shelling out billions to acquire US users, Temu is now focusing more on acquiring users in Europe and elsewhere, following TikTok's US issues (Wall Street Journal) https://t.co/YUno0mz5kt 📫 Subscribe: https://t.co/OyWeKSRpIM https://t.co/2nX3IC4VFZ
“Temu has pivoted more of its ad spending to Europe and other markets this year, said Seema Shah at market-intelligence firm Sensor Tower. By April, the U.S. made up 38% of its total ad dollars, compared with 63% in the fourth quarter in 2023, she said” https://t.co/rHIvKk4PcE
Chinese-owned bargain app Temu, which has gained spectacular popularity with American consumers, is shifting business priorities beyond the U.S., people close to the company said https://t.co/sMCQsQT2eE via @WSJ
"Temu Cools on the U.S. After Shelling Out Billions—App looks to reduce reliance on American shoppers as growth slows and scrutiny of TikTok grows" @raffaelehuang @shenlulushen https://t.co/rIJJihXP8Z https://t.co/rIJJihXP8Z
Chinese-owned bargain app Temu, which has gained spectacular popularity with American consumers, is shifting business priorities beyond the U.S., people close to the company said https://t.co/HCYm9bcJEY
Chinese e-commerce giants face delicate balance between discounts, profit https://t.co/VDaRccFb1x