Is Paid Traffic Worth It? Explore Temu’s 2025 and 2026 Case Study

In just over a year, Temu went from being a virtually unknown brand in Brazil to ranking first among the marketplaces and e-commerce platforms with the largest audiences in the country. Its growth was so fast that, in July 2025, the platform surpassed Mercado Livre and Shopee in traffic volume.

Behind those numbers, however, was an extremely aggressive user acquisition strategy that combined paid traffic, discounts, subsidized shipping, coupons, and a gamified shopping experience.

The initial result was impressive. However, just a few months after reaching the top, Temu recorded a sharp decline in audience and lost positions in the national ranking.

Does that mean paid traffic does not work? Quite the opposite. Temu’s case shows precisely how it can work too quickly when acquisition, retention, brand awareness, and organic channels do not evolve at the same pace.

More than discussing the success or failure of one specific company, the case helps explain why continuously increasing ad spend without monitoring CAC, LTV, repeat purchases, and retention can turn a growth strategy into an operation that is difficult to sustain.

How did Temu enter the Brazilian market?

Temu officially began operating in Brazil in June 2024. In its first month, it recorded approximately 9.8 million visits. Just five months later, in November, that figure had jumped to more than 107 million.

According to Conversion data reported by CNN Brasil, this growth happened even though the platform entered the country much later than competitors such as Shopee, Shein, and AliExpress.

In July 2025, this movement reached its most significant point. Temu recorded 409.7 million visits, compared with 393.2 million for Mercado Livre and 286 million for Shopee. Therefore, just over a year after entering Brazil, the company had become the traffic leader among the e-commerce platforms monitored by Conversion.

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These figures show the reach Temu achieved in a short period, but they do not necessarily represent leadership in revenue, number of sales, or profit. The data refers to traffic volume, which helps measure the strength of the brand in terms of audience, but does not reveal the financial performance of the operation on its own.

This distinction matters because a company can attract millions of visits and still struggle to turn that traffic into repeat customers and profitable sales. In Temu’s case, this analysis becomes even more relevant when growth is compared with factors such as acquisition cost, user retention, margins, and dependence on paid media.

How did Temu become so big in Brazil so quickly?

During Temu’s launch in the country, Sensor Tower identified that the company increased its digital advertising investment by more than five times from one month to the next. As a result, between June and August 2024, Temu became the most downloaded shopping app in Brazil during the period.

In addition to rapidly increasing brand awareness, this investment placed the platform in front of millions of consumers within just a few months. As a result, Temu was able to turn exposure into installs, visits, and new sales opportunities, which helps explain the unusual speed of its growth in the Brazilian market.

However, the acquisition data itself shows that much of this expansion was heavily supported by paid media. As a result, audience growth became dependent on paid traffic, making Temu’s operation unsustainable in the medium and long term. This is where an important lesson emerges: depending on paid traffic in isolation, without cross-channel communication, is not the best strategy for growth.

Paid traffic made Temu grow 5x faster than organic traffic!

In 2025, Similarweb identified an important sign of the difference between paid acquisition and organic growth. According to Ben Parkes, Team Manager of Advisory Services at Similarweb, Temu’s organic traffic in Brazil had nearly tripled in a short period. At the same time, paid search was growing at a rate five times faster than organic search.

This difference does not mean a company needs to receive more organic visits than paid visits to maintain a healthy operation. After all, many brands use performance media intensively while preserving healthy margins. However, when paid traffic starts generating far more sales than other channels, the company becomes dependent on constant investment to sustain the same growth rate.

In this scenario, the problem begins when the operation needs to buy an increasingly large share of its own audience. While SEO, direct traffic, branded search, CRM, and repeat business grow more slowly, any reduction in acquisition intensity can significantly affect total traffic volume.

Understand the problem with depending on paid traffic to sell

In addition to the rapid growth of paid media, retention data helps explain Temu’s case more clearly. According to Sensor Tower’s analysis of the Latin American market, users of the app had a churn rate nearly three times higher than that observed on more established platforms such as Mercado Livre and Shopee.

Churn represents the loss of users or customers over time: the higher the churn, the greater the loss of customers. Therefore, one of the main challenges for companies that invest heavily in paid traffic is retaining those customers and encouraging repeat purchases. In this context, the strategy begins to follow a cycle that demands increasingly more acquisition.

This is how dependence on paid traffic begins: the company invests to acquire a new user, generates the first visit or purchase, but then needs to return to the market to replace a significant share of the people who abandon the platform.

Ad investment → new user → first purchase → abandonment → new acquisition

Consequently, lower retention increases pressure on the media budget. Instead of using paid traffic primarily to expand its customer base, the company starts spending part of that budget simply to replace users who did not remain active.

In practice, the operation should work differently:

Ad investment and organic traffic → new user → first purchase → loyalty → repeat purchase

More investment does not mean proportional growth

Temu’s U.S. operation provides another important example of this relationship. In the six weeks before the 2024 Super Bowl, the company nearly doubled its advertising spending in the United States. Despite the significant increase in investment, daily active users did not follow the same trajectory.

According to Sensor Tower, Temu’s daily active users declined by an average of around 1% per week during that period. By comparison, during a similar campaign the previous year, those users had grown by approximately 10% per week.

This behavior helps explain a common phenomenon in campaigns that reach significant scale: diminishing marginal returns. Initially, the company can reach consumers who are most likely to discover, try, or buy the product. As investment grows, however, the media must reach progressively broader audiences that are less likely to convert.

Therefore, simply doubling the budget does not mean doubling sales, customers, or active users. As campaigns mature, companies need to monitor how much each additional increase in spending actually contributes to results.

Temu’s global investment shows the scale of the strategy

The international scale of Temu’s investment helps put the intensity of this strategy into context. According to the Wall Street Journal, Temu became Meta’s largest advertiser in 2023, spending nearly US$2 billion, while also ranking among Google’s five largest advertisers that year.

Therefore, aggressive acquisition was not limited to a one-off launch campaign in Brazil. The strategy was part of an international expansion movement in which Temu used media and incentives to gain brand awareness and market share at remarkable speed.

This model produced a result that few marketing strategies could achieve within the same timeframe. In a short period, the brand began competing for attention with companies that had operated in their respective markets for many years.

In this sense, paid traffic fulfilled its role of accelerating growth very effectively. However, the main challenge comes after this first stage: turning the acquired audience into a base that continues generating demand without relying on the same level of investment.

The audience decline shows the scale of the volatility

After reaching 409.7 million visits in July 2025, Temu’s trajectory in Brazil changed quickly. According to Conversion’s August 2025 E-commerce Sectors Report, the platform had grown by approximately 70% during the month and reached the top of Brazil’s ranking, surpassing Mercado Livre and Shopee in traffic volume.

The figure was also reported by E-Commerce Brasil, which recorded 409.7 million visits for Temu, compared with 393.2 million for Mercado Livre and 286 million for Shopee.

However, only two months later, the scenario changed significantly. According to Conversion’s report published in October 2025, Temu recorded a 56% decline in monthly visits in September, lost approximately 191 million visits compared with August, and returned to fourth place in the national ranking.

The earlier evolution also helps illustrate the speed of this growth. A CNN Brasil article based on Conversion data showed that Temu went from 9.8 million visits in June 2024 to 107.2 million in November of the same year, even though it entered the country after competitors such as Shopee, Shein, and AliExpress.

At the same time, the same Conversion report that recorded Temu’s decline brought another relevant figure to this analysis: organic search reached 29.5% of total Brazilian e-commerce traffic, the highest percentage recorded since the measurement began.

Although these two movements do not prove a direct cause-and-effect relationship, the contrast reinforces the importance of diversifying acquisition sources. While a company’s audience can fluctuate rapidly, organic channels, direct traffic, CRM, and branded searches can help reduce dependence on a single source of traffic.

Did Temu stop investing in paid traffic?

No. At least, there is no public evidence that Temu stopped investing in paid traffic in Brazil. In 2025, Similarweb was still identifying strong growth in the brand’s paid media in the country, with paid search growing at a rate five times faster than organic search.

What the data shows is a change in the pace of audience growth, not the end of the paid media strategy. Therefore, the subsequent decline in traffic cannot simply be explained by the idea that Temu “stopped advertising.”

In practice, the case reveals another problem: even with an aggressive acquisition strategy, maintaining hundreds of millions of visits requires retention, repeat purchases, and owned channels capable of sustaining part of that audience. When these factors do not grow at the same pace as media investment, spending needs to remain high to preserve results.

What does Temu’s case teach us about paid traffic?

The first lesson is that paid traffic can work extremely well to accelerate growth. Temu demonstrated this by going from a relatively small presence in Brazil to competing for the largest audience with some of the country’s biggest e-commerce companies in just over a year.

The evolution becomes even clearer when the figures are compared side by side. According to CNN Brasil, Temu had 9.8 million visits in its first month of operation, in June 2024. By July 2025, E-Commerce Brasil reported 409.7 million visits.

However, precisely because paid media can accelerate acquisition so quickly, it also requires constant efficiency monitoring. Growth stops being healthy when a company needs to buy increasingly more traffic just to preserve previous results.

Therefore, the problem does not lie in using advertising, but in becoming excessively dependent on it. A sustainable strategy uses media to acquire new consumers while also developing mechanisms that encourage some of those people to return through other channels.

Paid traffic needs to strengthen other channels

A balanced acquisition strategy does not end the relationship with the consumer after the first click. On the contrary, paid media can serve as the entry point to a relationship that continues through the shopping experience, content, CRM, SEO, relationship building, and brand development.

In this model, paid traffic initially acquires the consumer, while other channels work to increase retention and repeat purchases. As a result, some users no longer depend on new ads to return to the website or make another purchase.

The flow can follow this logic:

Paid traffic → first visit → first purchase → good experience → CRM, content, and SEO → new purchase → branded search → referrals and repeat purchases

In this way, each acquired customer can generate results beyond the initial conversion. At the same time, the company starts building owned assets that continue influencing demand even when the media budget changes.

Paid and organic traffic need to work together

Turning Temu’s case into a competition between paid media and SEO would also be a limited interpretation. The two channels serve different purposes and can complement each other within the same strategy.

While paid traffic provides speed, targeting, and the ability to test offers quickly, organic traffic builds presence gradually and can attract users who already demonstrate an intention to search for a particular product, service, or piece of information.

In addition, Brazilian market data itself reinforces the relevance of organic traffic. In September 2025, Conversion recorded a 29.5% share for organic search in total e-commerce traffic, the highest level since measurements began.

Therefore, mature companies do not need to choose between one channel and another. In practice, paid traffic can accelerate acquisition and distribution, while SEO, content, CRM, branding, and retention help reduce the need to repeatedly pay for every interaction with the consumer.

The danger of increasing paid traffic without control

When a campaign delivers good results, increasing the budget may seem like a natural decision. However, a campaign that performs efficiently with R$10,000 will not necessarily maintain the same efficiency with R$100,000 or R$1 million.

Temu’s U.S. case illustrates this difference well. As Sensor Tower showed in its analysis of the 2024 Super Bowl campaign, the company doubled its advertising investment in the six weeks before the event, yet daily active users declined by an average of 1% per week.

As spending grows, the company may begin reaching less qualified audiences, increasing ad frequency, and competing in more expensive auctions. In addition, some of the sales attributed to campaigns may come from consumers who would have purchased from the brand through other channels anyway.

Therefore, budget expansion needs to consider indicators such as:

• marginal CAC;
• conversion rate;
• ad frequency;
• audience saturation;
• contribution margin;
• repeat purchase rate;
• churn;
• LTV;
• payback period;
• sales incrementality.

When these metrics do not keep pace with media growth, sales and revenue may continue rising while financial efficiency declines. In this scenario, the company appears to be growing but needs to spend an increasingly large share of its revenue to sustain the same movement.

Growing revenue can hide an unsustainable operation

Revenue also needs to be analyzed carefully because higher sales do not necessarily mean a more profitable operation. Two companies can present very different results even when one of them generates significantly more revenue.

Consider this hypothetical example:

Although Company B generates twice the revenue, it needs to invest six times more in acquisition and finishes the period with a lower margin. In addition, its low retention indicates that the operation will likely remain dependent on new investment to sustain sales.

This example shows why metrics such as revenue, traffic volume, and number of customers should not be analyzed in isolation. Growth becomes more sustainable when a company can increase results without raising acquisition costs at the same rate.

When does paid traffic start to become a risk?

Dependence on media can develop gradually, especially while the company continues to grow in terms of revenue and sales volume. Therefore, certain indicators can help identify when the strategy begins to require more attention.

The main warning signs include:

1. CAC rises continuously as the company increases its budget;
2. revenue grows, but margins decline;
3. a large share of sales depends on discounts and promotions;
4. few acquired customers make a second purchase;
5. traffic falls sharply when campaigns are reduced;
6. SEO, CRM, direct traffic, and branded search remain underdeveloped;
7. the company needs to offer increasingly large incentives to convert;
8. LTV growth does not keep pace with CAC.

None of these indicators, when analyzed individually, automatically means that the strategy is wrong. However, when several appear at the same time, increasing the budget may fail to solve the problem and, in some cases, make it even more expensive.

Paid traffic needs to be treated as an investment

Temu’s case should not be interpreted as an argument against Google Ads, Meta Ads, or other media platforms. On the contrary, the speed of the company’s own growth demonstrates the potential of these tools when used at scale.

The international scale of this investment helps illustrate that potential. According to the Wall Street Journal, Temu spent close to US$2 billion on Meta ads in 2023 and ranked among Google’s five largest advertisers.

However, investment needs to match the financial capacity of the operation and the value generated by acquired customers. Instead of looking only at how much a company can spend, the strategy should determine how much it makes sense to invest without compromising margins or becoming excessively dependent on new campaigns.

Therefore, before increasing the budget, a company needs to understand how much it costs to acquire a customer, how long it takes to recover that investment, and how many buyers return after their first conversion. In addition, it is necessary to monitor how much growth comes from media and how much is already generated by SEO, branding, CRM, referrals, and direct traffic.

With this information, the decision to increase investment no longer depends only on sales volume and starts to consider the efficiency of growth.

The biggest lesson from Temu’s case

Temu’s case shows, above all, that buying traffic can be much faster than building preference. In a short period, the company reached hundreds of millions of monthly visits in Brazil and achieved the largest audience among the major e-commerce platforms being monitored.

At the same time, Similarweb data showed that Temu’s paid search traffic in Brazil was growing five times faster than organic search. Meanwhile, Sensor Tower identified churn nearly three times higher than that of Mercado Livre and Shopee in Latin America. Later, Conversion recorded a 56% decline in Temu’s Brazilian visits in September 2025.

These figures do not allow us to conclude that the strategy failed or that paid media alone caused the decline in traffic. However, they show why companies need to carefully evaluate the speed at which they increase acquisition investments.

In this sense, paid traffic works better as an accelerator than as the only source responsible for keeping a business moving. When media acquires the first customer and other channels manage to keep that person close to the brand, the investment can generate effects that continue after the campaign.

On the other hand, when the company repeatedly needs to pay to recover every visit, every sale, and every lost consumer, growth becomes progressively more expensive. Therefore, SEO, retention, relationship building, customer experience, CRM, and branding need to advance alongside the advertising budget.

As a result, the most important question is no longer simply how much a company can invest in paid traffic. The real point of attention is understanding how much of that growth will continue to exist when the company decides, or needs, to reduce its investment.