Finimize - 🤩 Temu is Big Tech's BFF

What’s going on here?

Chinese retailers made expensive bets on US-focused advertising, but Google and Meta should be wary about trusting their newfound hands.

What does this mean?

The head honchos in the US and China might be keeping their distance from each other, but Chinese retailers seem as keen as ever on stateside shoppers. Digital marketplace Temu, fast-fashion empire Shein, and video streaming and gaming platforms have been funneling cash into ads on Facebook, Youtube, and X (formerly Twitter). No wonder: China’s economic problems have convinced local shoppers to keep their money firmly in their wallets. So Temu alone spent nearly $2 billion on ads, determined to bring in customers from the land of the Red, White, and Blue – enough to become one of Google and Meta’s biggest advertisers. In fact, Meta said that 10% of its ad revenue comes from Chinese brands now, up from 6% just two years ago.

Why should I care?

Zooming out: It’s tough to run a small business.

Meta and Google have been struggling to bring in their usual buckets of ad money, with Apple’s tightening policies making it harder for them to target folk with MI5-level algorithms. This recent rush of Chinese business is just what they need, then. Plus, now that Meta and Google can afford to up their prices, smaller players like Etsy have to cough up more for the same coverage.

The bigger picture: Temu’s far from reliable.

Big Tech can’t relax yet, mind you, because Temu’s spending habit might not stick. They’ve seen that before: Wish – an American ecommerce company that sells cheap products made in China – used to line social media companies’ pockets, but then it suddenly cut back. Temu could do the same. The platform reportedly loses $7 on each order, compromising profit to make a name for itself, so it could feasibly switch into money-saving mode without a moment’s notice.

What’s going on here?

British home prices picked up for the fifth month in a row, news that could bring the house down among UK homeowners.

What does this mean?

UK house prices were 1.7% higher last month than the same time last year, with the average British home landing just £1,800 shy of the peak from June 2022. There’s reason to believe that the market can keep it up, too. The Bank of England is expected to take the head off interest rates this year, making mortgages more affordable. And in January, the number of mortgage approvals inched up for the fourth month in a row, reaching their highest point in over a year. Of course, though, an economic downturn or another spike in inflation could wipe the slate clean. That’s why the UK’s Office For Budget Responsibility still expects house prices to fall this year, albeit at a slower pace than it expected four months ago.

Why should I care?

For you: Brits need a step ladder to reach the property ladder.

Higher house prices would give existing homeowners a leg up, but it won’t do much for would-be ones. Even though mortgage rates are lower than their peak from last summer, the average two-year fixed mortgage still sits at a lofty 5.7%. That, plus the challenge of pulling together a deposit while the cost of living bites, means many hopeful homeowners are priced out of the market, especially first-time buyers and low-income families.

For markets: This is big – literally.

Residential real estate is the biggest asset class in the world, partly dictating the success of sectors like construction, furniture and interior stores, and banks that issue mortgages. Plus, the way homeowners feel about the value of their home influences their spending habits. In other words, when the housing market picks up, the economy does too – so it bodes well that house prices are moving in the right direction all around the globe.