During the Super Bowl on Sunday, two e-commerce platforms with very different visions for online shopping, Etsy and Temu, will run ads aimed at distinguishing themselves from the competition.
- Etsy’s ad will promote a new feature called “Gift Mode,” which uses AI to make it easier for customers to discover and send gifts on the platform’s vast handicraft marketplace.
- Temu’s official ads aren’t yet finalized, but the China-based company’s 2023 Super Bowl ad featured the tagline, “Shop like a billionaire.”
The two companies represent diametrically opposed views on what value means. Besides being two of the biggest e-commerce sites to run Super Bowl ads this year, at least one of the brands recently name-checked the other in an earnings call.
Etsy CEO Josh Silverman told investors in the fall that new Chinese competitors such as Temu and Shein are “having an impact in the market” and “taking share from many people.” He also stressed that Etsy is a very different company than Temu, in particular.
“If I had to think about what is the polar opposite of Etsy, I’d probably get pretty close to Temu,” he said. “I think the more people experience super cheap and super disposable, the more they crave something different and something better, and that’s us.”
The emergence of low-cost competitors has also pushed Etsy to invest more in TV marketing, according to Silverman, rather than paid marketing channels currently saturated by upstarts such as Temu. For comparison, Etsy spent $498 million on marketing for the first nine months of 2023, while Temu reportedly spent $3 billion on online advertising in 2023.
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Standing out: In light of this increased competition, Silverman said Etsy isn’t interested in a “race to the bottom”—and its Super Bowl ad appears to reflect that approach.
Brad Minor, Etsy’s head of brand, told Retail Brew ahead of the Super Bowl that “the goal should never be to fit into the competitive set. The goal should always be to stand out.”
In this case, that means highlighting gifts as a use case that it is uniquely suited to satisfy.
Minor explained that Etsy chose the Super Bowl to promote the Gift Mode feature because it wants to highlight its marketplace as a destination for non-holiday gift-giving, which he said accounts for 50% of items purchased as gifts on the platform. “The risk of doing it at this time is that no one’s talking about gifting. The reward is that no one’s talking about gifting.”
This strategic pivot comes at a difficult time for Etsy. In December, the company in December laid off 11% of its workforce, citing a “very challenging macro and competitive environment” and flat gross merchandise sales since 2021. Meanwhile, competitors like TikTok have also reportedly tried to poach sellers from the platform.
“We are obviously in tune with the competitive landscape,” Minor added. “I would just say on that front that we are very much focused on showing our differentiated advantage in this time. Consumers look to us for something unique, something special.”
Temu did not respond to Retail Brew’s request for an interview to discuss its Super Bowl marketing strategy.