The trade relationship between China and the United States has been fraught with conflict, but Chinese start-ups are finding success in the West by spending billions on ads on Silicon Valley’s tech platforms. Temu, an arm of Pinduoduo, is flooding Google with ads for low-cost goods, while Shein is bombarding Instagram with ads for affordable fashion. Chinese video streaming and gaming apps are investing in ads on Facebook and YouTube to attract users.
Meta, the parent company of Facebook and Instagram, reported that Chinese advertisers contributed significantly to its revenue, with Temu placing 1.4 million ads on Google and over 26,000 ads on Meta. This surge in spending highlights the strong ties between China and the US, with Chinese companies reaching global audiences and Silicon Valley firms profiting from this market even if they are not active in China.
Chinese start-ups are seeking international expansion as growth in China slows, and government regulations restrict their operations. The crackdown on companies like Alibaba and Didi has emphasized the importance of complying with the Chinese Communist Party’s rules. By advertising on platforms like Google and Meta, Chinese firms are tapping into a global audience, despite the challenges of doing business in China.
The ad blitz by companies like Temu and Shein has driven up digital advertising costs, as they compete for attention in the US market. Temu, in particular, has spent billions on marketing and attracted millions of daily users in the US. Shein, founded in China, relies on Chinese sellers and supply chains but has seen success in the US market through aggressive marketing efforts.
While advertising on platforms like Facebook may not guarantee success, companies like Temu and Shein are leveraging Meta’s vast user data to target ads effectively. In addition to retailers, Chinese game developers are also investing heavily in advertising on platforms like Meta to reach global audiences. The game industry faces challenges in China, prompting developers to focus on international markets where they can access a wider customer base.
Overall, Chinese start-ups are capitalizing on global opportunities despite challenges in their home market. As they invest in advertising on platforms like Meta, they are able to reach consumers outside of China and drive their businesses forward in the competitive global market.
