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Big American Tech Profits From Chinese Ad Spending Spree

Big American Tech Profits From Chinese Ad Spending Spree

The trade relationship between China and the United States has plenty of friction. But at least one area is booming: Chinese start-ups looking to establish a presence in the West are spending billions of dollars for advertisements on services owned by some of Silicon Valley’s biggest technology companies.

Temu, the international arm of the Chinese e-commerce giant Pinduoduo, is flooding Google with ads for absurdly inexpensive goods. With an initial public offering looming, the fast-fashion merchant Shein is inundating Instagram with ads for clothes and accessories at rock-bottom prices. Developers of China’s video streaming and gaming apps are dumping marketing dollars into Facebook, X and YouTube to entice potential users.

Meta, the parent company of Facebook and Instagram, said on call with analysts that Chinese-based advertisers accounted for 10 percent of its revenue, almost double over two years ago. In the last year, Temu has placed about 1.4 million ads globally across Google services, and at least 26,000 different versions of ads on Meta, according to Meta’s Ad Library.

“What companies like Temu have done is really just open a fire hose of money that it is pouring into ads,” said Sky Canaves, senior analyst for retail at eMarketer. “You can’t escape their ads across Facebook, Instagram and Google Search.”

The surge in spending shows how interconnected China and the United States remain, despite vigorous efforts by each country to be more self-reliant. The Chinese companies are gaining access to vast audiences of consumers, and the Silicon Valley companies are making money off a market they are otherwise not doing business in.

The marketing blitz is fueled by the global ambitions of Chinese start-ups. At home, the economy is no longer growing by leaps and bounds as it had for years, and companies are subject to a thicket of government rules that have quashed their growth.

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