Chinese e-commerce giant Pinduoduo (PDD) — the parent company of Temu — made a splash at Super Bowl LVIII with a total of four ads for its heavily-discounted marketplace. The campaign for Temu, whose slogan is "Shop Like a Billionaire," signals Pinduoduo's ambition to grow its US user base and position itself as a budget-friendly alternative to Amazon (AMZN).

Yahoo Finance's Reporter Madison Mills breaks down the details.

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Editor's note: This article was written by Angel Smith

Video Transcript

BRAD SMITH: Let's take a look at today's stock to watch. We're watching shares of Temu's parent company, Pinduoduo, after doubling down on another Super Bowl ad. "Yahoo Finance's" Madison Mills is on the floor of the New York Stock Exchange with more. Hey, Maddie?

MADISON MILLS: Hey, Brad. So the tune of four ads for Temu last night leading to some positive action in the pre-market here. It's up over 1%. And as a reminder, as you mentioned, the parent company here is Pinduoduo. This is a Chinese-based e-commerce platform.

And the big takeaway for me is that this is part of their $3 billion marketing budget, just for this year. Putting a lot of that money into the Super Bowl with those four ads last night. Are those ads going to lead to Temu being able to take up some market share from, of course, the big competitor in the room, Amazon?

And it was interesting to me that the tagline for the ad was, "shop like a billionaire." And it showcased someone buying all of these products. A lot of consumption there. The idea being that you can have it all when you're shopping on Temu's platform, because the prices are just so competitive.

And even with Amazon really rewarding those sellers on the platform who are able to keep their prices as competitive as possible, Temu is still beating them when it comes to the competitive pricing. And that is because of the Chinese manufacturing that keeps the costs down for producing those goods. It's just really hard for anyone to compete.

Now, having said, that some negative news for the stock coming in the month of January. Morgan Stanley downgrading PDD saying that they feel like it's hit a crest, hit a tipping point when it comes to adoption of the platform.

At my Super Bowl party last night, some folks had not heard of Temu just yet. So my big question moving forward, is this marketing budget that they have going to allow Temu to get that adoption for users in the United States? And is that going to allow them to continue to have a strong footing against the likes of Amazon?

I also want to mention that this name did have a downgrade from Moody's in December. So there is still some question marks remaining for Pinduoduo here.

BRAD SMITH: Yeah. A bold strategy, indeed, especially, as at the same conversation point last night for myself. A lot of people asking, what is Temu? So a lot of our friend groups might overlap, Maddie. We'll see.