New strategy from Shein and Temu: Digital investment in Europe and Brazil
High customs tariffs and legal pressures in the US have pushed Chinese e-commerce giants Shein and Temu to reshape their digital advertising strategies. Having long pursued aggressive growth strategies in the US market, these two companies have shifted their focus to key European markets, namely the UK and France, as well as Brazil, the rising star of Latin America, following recent developments.
Facing rising customs duties in the United States, Chinese-based e-commerce platforms Shein and Temu have reshaped their marketing strategies.
Shifting their advertising investments to alternative markets such as the UK and France in Europe and Brazil in Latin America, the two companies began reducing their digital advertising visibility in the US as of April. According to data shared by Sensor Tower, this trend is reflected in a significant increase in digital advertising spending in Europe.
NEW TARGET: UK AND FRANCE
While Shein increased its digital advertising spending in France and the UK by 35 percent, Temu's spending in the same markets rose by 40 percent and 20 percent, respectively. This increase is noted to have occurred following steps taken by former US President Donald Trump to eliminate the "de minimis" exemption. This regulation, which allowed products under 800 dollars to enter the US tax-free, had been a fundamental factor in the rapid growth of Shein and Temu in the American market.
REDUCED ADVERTISING SPENDING IN THE US
Just before the removal of the 'de minimis' exemption, Shein and Temu made significant cuts to their digital advertising budgets in America. According to Sensor Tower's analysis, between March 31 and April 13, Temu's average daily advertising spending on Facebook, Instagram, TikTok, Snap, X, and YouTube platforms decreased by 31 percent compared to the previous 30 days.
During the same time frame, a 19 percent average drop was also observed in Shein's advertising spending on Facebook, Instagram, TikTok, YouTube, and Pinterest.
EYES ON BRAZIL
According to Sensor Tower analyst Kara Lee, Shein, which maintains production activities in Brazil, increased its digital advertising investments by 140 percent compared to last year before Temu's entry into the country. Temu, meanwhile, drew attention with an 800-fold increase in advertising spending in April 2024 compared to a year earlier. Lee states that this approach bears a great resemblance to the strategy Shein followed when it entered the US market in September 2022, and adds: 'They are likely applying the same tactic in Brazil as well.'
News Source: 12punto
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