Hey there, great people of the D2C community who are building fantastic things! This is your host Berkay writing.
Take a 5-minute break and dive into D2C Digest for a quick overview of what’s happening in the D2C market worldwide!
😲 TEMU steps back from the US market
Well, this is shocking news!
You may remember our news from our previous weeks that Temu, the Chinese fast fashion brand, spent around $2 billion on ads last year alone, and most of this budget was spent on the US market.
But now, they decided to step back from the US market due to rising political tensions and regulatory challenges!
Once generating 60% of its revenue from the American market, Temu now expects less than a third of its sales to come from the USA. This move follows the difficulties faced by TikTok in the US and new legislation targeting Chinese-owned apps.
Legal issues also impact Temu, with allegations of forced labor and data security breaches. In response, the company is expanding its presence in Europe and other markets, redirecting a significant portion of its advertising budget away from the USA. In the first quarter of this year, only 38% of Temu's advertising spending targeted the USA, down from 63% in late 2023.
Despite these challenges tho, Temu continues to value the US market but is establishing a new fulfillment center in Mexico to reduce dependency.
👤 Google’s Visual Brand Profiles
Last week, Google announced a significant update for ecommerce brands: Visual Brand Profiles.
Google introduces Visual Brand Profiles to enhance branding in search results. This feature allows merchants to create profiles with key information, images, videos, customer reviews, promotions, and policies, showcased at the top of search results. It aims to improve brand visibility and reduce the impact of competitor bidding. Rollout begins in phases soon.
🤑 AI-powered Amazon Performance+ ads offer 30-90% lower CPAs
Amazon has launched Performance+, a new AI-driven advertising product designed to optimize campaigns and reduce cost-per-acquisition (CPA) by 30-90%. This tool uses machine learning to predict conversion rates and automate campaign management.
Key Points:
- Performance+ predicts user conversions and manages ads across Amazon and external sites.
- Advertisers set CPA goals; Amazon's algorithms handle the rest.
- Features include brand safety controls, custom reporting, and suitability for non-Amazon sellers.
Since its March launch, Performance+ has delivered significantly lower CPAs than traditional Amazon ads.
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