Temu and Shein’s online marketing campaigns are causing significant difficulties for competing retailers and brands, especially during the Black Friday period. The two fast-growing e-commerce platforms spend huge amounts of money on search marketing, making it more expensive and difficult for other companies to reach customers. According to a Reuters report, Temu and Shein are also targeting competitors’ brand names when bidding on keywords, which increases their cost-per-click (CPC) – the article in Pénzcentrum points out.
According to data from the online marketing platform Semrush, Temu is bidding on keywords such as “Walmart Black Friday deals” and “Kohls Black Friday”, while Shein is targeting search terms such as “Zara jeans” and “Walmart clothes”. Such strategies can further increase advertising costs during the holiday season, when search traffic increases, making it a challenge for smaller brands. A Temu spokesperson, however, stressed that the company is trying to ensure fair competition by using a “negative keyword list” to exclude ads that directly target brand names.
Rising costs and new strategies
With marketing costs rising, more businesses are turning to other channels. Erin Brookes, a retail expert at Alvarez & Marsal, says many brands are rethinking whether a broad search marketing campaign is actually reaching the right customers. Many are now focusing on more targeted strategies and loyalty programs to attract repeat, higher-margin customers.
For example, Asos, the British online fast-fashion retailer, recently launched a new loyalty program and is trying to reach its target audience through more emotional approaches, such as cinema ads and influencers, in addition to traditional search marketing.