Temu, a rapidly growing Chinese e-commerce platform, has recently encountered significant challenges in the U.S. market. According to Search Engine Land, increased tariffs imposed by the U.S. government on products imported from China led Temu to discontinue its Google Shopping ads campaign on April 9th. This decision resulted in a dramatic drop in App Store rankings—from third or fourth place to fifty-eighth within just three days.

Mike Ryan, director of insights at Smarter Ecommerce, shared this news on LinkedIn and observed that Temu’s display share (a measure of ad frequency relative to available slots) decreased sharply. By April 12th, the company was no longer appearing in advertiser auction data.

This event aligns with former President Trump's policy of imposing higher tariffs—up to 125%—on Chinese imports while maintaining a more accommodating approach towards other trading partners. Temu’s business model relies heavily on subsidies from its parent company, Pinduoduo, for market share growth; however, the platform currently operates at a loss per sale. The Trump administration's tariffs have significantly disrupted Temu’s direct procurement strategy with manufacturers.

Analysts believe this withdrawal reveals how precarious Temu’s position is in the U.S. market: without consistent ad spending, sustaining app performance becomes difficult. This rapid decline in App Store rankings underscores just how reliant Temu was on paid Google ads.

With Temu's aggressive advertising campaigns disappearing from auction platforms, digital advertising costs may temporarily decrease; CPM rates are expected to fall, potentially lowering the cost per click and conversion for other advertisers.

(Image source: Shutterstock)