Instagram stands to gain from TikTok ban; Shein, Temu cut Meta ads by 31%, 19% in April.

Instagram is poised to benefit significantly if TikTok is banned in the United States. This prospect was highlighted in a chart presented during Meta's FTC antitrust lawsuit as part of the opening statement by Meta's lawyer, Matt Hansen. The chart clearly shows a spike in Instagram user engagement when TikTok temporarily went offline due to server issues. During the weekend of January 18-19, 2023, TikTok experienced a 14-hour outage in the U.S., and Instagram saw an immediate and notable increase in per-hour user engagement. The chart indicates that as soon as TikTok was back up, Instagram's per-hour usage returned to its usual level. This data suggests that TikTok users quickly turn to Instagram when the former is unavailable, which could have significant implications if TikTok is banned. On April 4, 2024, former President Donald Trump signed an executive order giving TikTok 75 days to find a new owner that meets the legal requirements of a "divestment or ban." While the final decision is still pending, ByteDance must find a solution for TikTok's U.S. operations. If TikTok is banned, Meta's platforms, particularly Instagram and Facebook, could see a surge in user activity. Extended user engagement on these platforms would translate to more advertising revenue, providing a substantial economic boost for Meta. EMARKETER, a sibling company of Business Insider, estimates that a TikTok ban could increase Meta's advertising revenue by $2.46 billion to $3.38 billion. To capitalize on this potential shift, Instagram is set to launch a new video editing application called "Edits" in the coming weeks. This app will directly compete with ByteDance's CapCut, further solidifying Instagram's position in the short-form video market. The introduction of "Edits" is part of Meta's broader strategy to expand its offerings and attract more users in the face of increasing competition from TikTok. Industry experts note that the chart not only illustrates the direct user migration from TikTok to Instagram during outages but also underscores Meta's potential competitive edge in the short-form video space. With a robust user base and a well-established advertising network, Meta has been strategically positioning itself to counter TikTok's rise. If TikTok's U.S. operations are ultimately restricted or prohibited, Meta stands to gain even more. --- Sensor Tower data reveals a significant change in advertising strategies among Chinese e-commerce giants Temu and Shein. As of April 2023, both companies have reduced their ad spend on major platforms like Meta and X (formerly Twitter). Temu's advertising expenditure has averaged a 31% decrease, while Shein's has dropped by 19% compared to March 2023. This shift marks a notable pivot in their marketing approaches. Temu, a subsidiary of Pinduoduo, launched in September 2022 and quickly gained traction in the U.S. and other international markets with its low-price strategy and extensive advertising efforts. Shein, a renowned cross-border fast-fashion e-commerce platform, has consistently used social media platforms to promote its products, becoming a favorite among young consumers globally. The reduction in ad spend can be attributed to two main factors. First, both companies have achieved substantial brand recognition and user bases through their initial aggressive marketing campaigns, reducing the need for continued large-scale advertising. Second, the rising costs of ads and changes in platform algorithms have decreased the return on investment (ROI), leading to a more cautious approach to ad spending. Despite the reduction in advertising, Temu and Shein are not slowing down their overseas expansion. Instead, they are focusing on optimizing their supply chains, enhancing product quality, and improving user experiences. Temu also plans to introduce new features, such as live shopping, in the coming months to attract more users. As of March 2023, Temu had surpassed 27 million downloads, making it one of the fastest-growing shopping apps. Shein, meanwhile, continues to lead the fast-fashion market with a steady increase in monthly active users (MAUs). Analysts believe that Temu and Shein's strategic shift reflects the growing maturity and adaptability of Chinese e-commerce companies in international markets. Rather than relying heavily on ad campaigns, these companies are shifting towards a more cost-effective and sustainable growth model. This trend is likely to positively influence the broader e-commerce industry, encouraging other companies to prioritize user experience and supply chain efficiency. Pinduoduo and Shein Group, the parent companies of Temu and Shein, are leading players in the Chinese e-commerce sector, known for their strong supply chains and extensive user bases. As competition in global markets intensifies, the strategic adjustments made by these companies will continue to shape the international e-commerce landscape. Industry insiders agree that this mature and flexible approach will help these companies maintain their competitive edge in a highly dynamic market environment.