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Big American tech profits from Chinese ad spending spree

Economic Times · 8m

Chinese startups are spending billions of dollars on advertising with Silicon Valley's biggest technology companies to establish a presence in the West. Temu, the international arm of Pinduoduo, and fast-fashion merchant Shein are flooding Google and Instagram with ads for low-cost products. Chinese video streaming and gaming apps are also investing heavily in marketing on Facebook, X, and YouTube. Chinese-based advertisers now account for 10% of Meta's revenue. This surge in spending highlights the interconnectedness between China and the US and the global ambitions of Chinese startups. However, advertising costs have been driven up significantly, impacting companies like Etsy. Despite these efforts, success in the Western market is not guaranteed, as seen with previous examples like Wish. Additionally, Chinese short-form content providers are competing to export addictive dramas to platforms like Instagram, requiring a steady stream of users to sustain revenue. Overall, Chinese companies are leveraging the reach of Silicon Valley platforms to access global audiences, while these platforms make money from markets they cannot tap into in China.