After several successes in gaming and e-commerce, Colin Huang fell ill and retired. At one point, the young entrepreneur stayed at home for a year, thinking about his next move.
The former Google engineer eventually founded Pinduoduo in 2015, an e-commerce platform known for selling ultra-cheap products and massive promotions. He quickly rose to the ranks of the world’s richest people, with a net worth of $71.5 billion in early 2021. dollar peak.
Like many so-called COVID-19 billionaires, his wealth plummeted as quickly as it was created, plunging 87% in about a year. Huang’s decline was particularly pronounced as the global pandemic slowed, coinciding with China’s sudden crackdown on the private sector.
Then something surprising happened: Huang’s PDD Holdings made a comeback. Although the scale is not as large as before, it remains stable, and expansion outside China under the Temu brand will help offset the continued weakness of the domestic economy.
As a result, Huang, 44, becomes China’s richest man, according to the Bloomberg Billionaires Index. With a fortune of $48.6 billion, he replaced China’s bottled water king Zhong Shanshan, who had held the top spot since April 2021.
Huang’s remarkable rise has been fueled by changes in China’s shopping habits after the country’s real estate crisis turned into a prolonged economic slowdown. He is also the first tech tycoon to top the wealth rankings in more than three years after government pressure on private companies left rivals such as Jack Ma’s Alibaba Group Holding Ltd in trouble. Lowering prices led to protests from suppliers and the formulation of a series of policies.
Brock Silvers, managing director of private equity firm Kaiyuan Capital, said: “Jack Ma and Jeff Bezos have always been corporate leaders in their era, but times have changed, and Jen-Hsun Huang has A different, less dramatic approach was a huge success.
Representatives for PDD did not respond to requests for comment.
math prodigy
Unlike Jack Ma, the English teacher-turned-Alibaba founder, Huang represents a new generation of Chinese tech entrepreneurs who began their careers with global opportunities.
At the age of 12, his prodigious talent for mathematics earned him a place at the elite Hangzhou Foreign Languages School, where he became classmates with the children of China’s political and social elite. After graduating from Zhejiang University in computer science, he left China in 2002 to pursue a master’s degree at the University of Wisconsin.
Two years after graduation, he returned to China to help found Google China. He founded his first company in 2007, then sold it in 2010 to start a new company that helped businesses market themselves on sites such as Alibaba-owned Taobao or JD.com. He came up with the idea for Pinduoduo in 2013 when he retired due to an ear infection.
Huang told Caijing magazine in 2018 that Pinduoduo “is not trying to make Shanghai people feel like they are living a Parisian life, but to make sure Anhui people have kitchen paper and fresh fruit.” “Our goal is not to be cheap, but to make users feel like they’re getting a good deal.”
past time
Huang has largely stayed out of the spotlight since resigning as Pinduoduo’s chief executive in 2020 and chairman in 2021 as Beijing began cracking down on China’s tech giants. (He said he was pursuing a personal interest in studying food and life sciences, according to a shareholder letter.)
Around that time, PDD and his net worth began to plummet.
But Pinduoduo’s launch of Temu outside China boosted the company’s revenue and underpinned its rebound. It soared to the top of U.S. app stores after launching in September 2022, targeting inflation-weary Americans with cheap, unbranded products shipped directly from China. Pinduoduo’s revenue last year was approximately 248 billion yuan ($35 billion), a 90% increase from 2022.
Neil Saunders, retail analyst at GlobalData Retail, said: “In the current economic climate, people are obviously looking for value for money, low price products. “So for a value retailer like Temu, this is a Time to shine.”
All this, coupled with China’s abandonment of its zero-COVID-19 policy in December 2022, has driven Pinduoduo’s valuation to soar. In November, the company surpassed Alibaba for the first time to become China’s second-largest online company, and the two rivals have been neck-and-neck ever since.
penalty time
Still, the rapid growth has attracted close attention at home and abroad. Even after an investigation into working conditions following the death of an employee in 2021, the PDD still required employees to work from 11 a.m. to 11 p.m., six days a week, with overtime. It’s a variation on the industry’s “996” culture, which companies such as ByteDance Ltd. and Alibaba Group Holding Ltd. have shunned in the wake of regulatory scrutiny from Beijing.
Temu’s ultra-cheap products have also fueled growing dissatisfaction among some merchants and third-party sellers, who believe the e-commerce giant is increasingly squeezing their revenue. Matters came to a head during a series of public rallies this summer, including one when hundreds of small suppliers chanted slogans outside Temu’s outpost in Guangzhou to protest what they called unfair penalties imposed by the company.
Elsewhere, U.S. small businesses are taking note of Temu’s rapid growth. The company is currently using a trade loophole to ship goods worth up to $800 into the U.S. duty-free, sending small packages to U.S. individuals from its warehouses in China. Lobbyists are pushing to lower the threshold to $10.
Still, PDD launched an aggressive promotional campaign, including spending millions on a 30-second Super Bowl spot for Temu. The company’s Temu website also features eye-catching banners that read: “Shop like a billionaire.”
“Temu’s focus right now is growth,” Sanders said. “Get people to the site, get them to shop. And then if they become more addicted, if we push the prices up a little bit, they might start to become more tolerant. So I think for Temu, we’re in a land right now. Age of plunder.
