After several moderately successful ventures in gaming and e-commerce, Colin Huang got sick and retired. At one point, the young entrepreneur stayed home for a year thinking about his next move.
The former Google engineer eventually started Pinduoduo, an e-commerce platform known for selling dirt-cheap products with massive promotions, in 2015. He quickly ascended the ranks of the world’s richest people, with his net worth peaking at $71.5 billion in early 2021.
Like many so-called Covid billionaires, his fortune collapsed just as fast as it was made, tumbling 87% in the span of about a year. Huang’s decline was especially stark as the slowing global pandemic coincided with China’s abrupt crackdown on the country’s private sector.
Then something surprising happened: Huang’s PDD Holdings Inc. staged a comeback. Not as big as before, but steady, with its expansion outside of China under the Temu brand name helping counteract a persistently weak domestic economy.
As a result, Huang, now 44, has become China’s richest person, according to the Bloomberg Billionaires Index. With a $48.6 billion fortune, he displaces Zhong Shanshan, the country’s bottled-water king who has held the top spot since April 2021.
Huang’s remarkable ascent has been fueled by China’s changing shopping habits after the nation’s real estate crisis morphed into a prolonged slowdown. He’s also the first tech tycoon to top the wealth rankings in more than three years, after government pressure on private businesses ensnared rivals like Jack Ma’s Alibaba Group Holding Ltd. Along the way, Huang has also drawn protests from suppliers for driving down prices and set a punishing work schedule for his own employees.
“Ma and Jeff Bezos have been corporate leaders in their moments, but the times have changed and Huang is seeing great success with a different, less visible approach,” said Brock Silvers, managing director at private equity firm Kaiyuan Capital.
Representatives for PDD didn’t respond to requests for comment.
Math Prodigy
Unlike Ma, the English teacher-turned-founder of Alibaba, Huang represents a new generation of Chinese tech entrepreneurs who started their careers with global opportunities.
At 12, his prodigious math talent earned him a place at the elite Hangzhou Foreign Languages School, where he was classmates with the children of China’s political and social elite. After graduating with a computer science degree from Zhejiang University, he left China in 2002 to pursue a master’s degree at the University of Wisconsin.
Two years after graduating, he moved back to help set up Google China. He founded his first company in 2007, then sold it in 2010 to start a new one that helped companies market themselves on websites like Alibaba’s Taobao or JD.com. When an ear infection led him to retire in 2013, he hatched the idea for Pinduoduo.
PDD “is not about letting people in Shanghai feel like they are living a Parisian life, but making sure that people in Anhui have kitchen paper and fresh fruits,” Huang said in 2018 interview with Caijing magazine. “The goal is not to be cheap, but to make users feel like they got a good deal.”
Temu Time
Huang has mainly stayed out of the limelight after he stepped down as PDD’s chief executive in 2020 and left the board as chairman in 2021, as Beijing began cracking down on China’s tech giants. (He said he was pursuing personal interests researching food and life sciences, according to a shareholder letter.)
It was around that time that PDD—and his net worth—started to tumble.
But Temu, PDD’s offering outside of China, bolstered the company’s top line and underpinned its rebound. It surged to the top of US app stores upon launching in September 2022, targeting inflation-weary Americans with cheap, unbranded products shipped directly from China. PDD reported about 248 billion yuan ($35 billion) in revenue last year, a 90% jump from 2022.
“In this economic environment, obviously people are looking for great value for their money, people are looking for low prices,” said Neil Saunders, a retail analyst at GlobalData Retail. “So this is a time to shine for value retailers like Temu.”
All that, along with China dropping its Covid-Zero policy in December 2022, has driven a surge in PDD’s valuation. In November, the company surpassed Alibaba for the first time to become China’s second-largest internet firm and the two rivals have been neck-and-neck since.
Punishing Hours
Still, the breakneck growth has drawn scrutiny at home and abroad. Even after a probe into working conditions following the death of an employee in 2021, PDD continues to demand that employees work from 11 a.m. to 11 p.m., six days a week, plus overtime. It’s a variation of the industry’s “996” culture which companies like ByteDance Ltd. and Alibaba steered away from after Beijing’s regulatory scrutiny.
Temu’s ultra-cheap offerings also led to growing frustration among some merchants and third-party sellers, who feel the e-commerce giant is increasingly squeezing them for revenue. Things came to a head in a series of public rallies this summer, when, in one case, hundreds of small suppliers yelled slogans outside a Temu office outpost in Guangzhou to protest against what they called unfair penalties the company is levying.
Elsewhere, US small businesses have also noted Temu’s rapid growth. The company currently takes advantage of a trade loophole that allows for duty-free shipments up to $800 into the US, by sending small packages from its warehouse in China to individual Americans. Lobbyists are pushing for the threshold to be lowered to $10.
Still, PDD has engaged in aggressive promotion campaigns, including spending millions on a 30-second Super Bowl advertisement for Temu. It also has catchy banners on its Temu website, including, among others: “Shop Like a Billionaire.”
“Temu at the moment is all about growth,” Saunders said. “Attract people to the site, get them shopping. Then if they become more addicted, maybe then they start to be more tolerant if we push prices up a little bit. So I think for Temu it’s in a land grab era.”
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