SINGAPORE – Chinese Chinese e-commerce company Pinduoduo Inc.’s
PDD -10.27%
founder and chairman Colin Huang stepped down from the company on Wednesday, even as the five-year-old company overtook Alibaba Group Holding Ltd.
BABY 2.15%
to become the country’s largest e-commerce business through annual active buyers.
Mr. Huang, 41, resigned as China’s powerful Internet sector came under increasing government scrutiny. His resignation follows another departure from a major company in the sector: Simon Hu, CEO of financial technology giant Ant Group Co., retired earlier this month.
In a letter to shareholders, Mr. Huang said he is retiring to pursue personal interests in life sciences. A person familiar with the matter is in talks with Chinese universities to set up research laboratories on biotechnology. For his next step, he will study biotechnology in these laboratories, the person said.
Mr. Huang said in a letter to shareholders that the board on Wednesday approved his resignation as chairman. CEO Chen Lei will take on the additional role of chair of the Nasdaq-listed company.
In 2020, Pinduoduo had 788.4 million active buyers annually, users who bought at least one item last year, 35% higher than a year earlier. It was the first time that Pinduoduo, which is based in Shanghai, exceeded the 779 million active buyers of Alibaba.
The company announced its October-December results on Wednesday. Pinduoduo’s quarterly revenue rose 146% year-on-year to about $ 4 billion.
Mr. Huang, who stepped down as CEO of Pinduoduo in July, is still the largest shareholder in the company. According to the letter, he undertook to extend the lock-in period for his shares by another three years.
The voting rights attached to his shares were removed when he relinquished executive responsibilities, and Mr. Huang said he would entrust the voting rights of these shares to the board.
Mr. Huang said in the letter that the pandemic accelerated Pinduoduo’s improvements to its operations and helped nurture a new generation of leaders. “It’s time for them to form the Pinduoduo they want to build,” he said.
In recent months, Beijing has enchanted the powerful Internet sector in China, including e-commerce enterprises. Among the hardest hit is Alibaba, which is under antitrust investigations; its fintech subsidiary Ant, whose initial public offering was canceled in November; and its founder Jack Ma.
After Jack Ma criticized Chinese regulators, Beijing scrapped the initial public offering of its fintech giant Ant and he largely disappeared from the public eye. WSJ watches recent videos of the billionaire to show how he got himself in trouble.
This month, Chinese regulators fined Pinduoduo along with several other e-commerce companies, claiming they are not competitive.
Mr. Huang, a former Google engineer, founded the company in Shanghai in 2015. The company is backed by social media giant Tencent Holdings. Ltd.
and venture capitalist Sequoia Capital China.
A person familiar with the matter has moved away from Pinduoduo’s day-to-day operations since he left the CEO position.
Mr. Chen, a computer scientist studying at the University of Wisconsin-Madison, was now closely involved in strategic and operational decisions as a member of the founding team.
China’s Internet sector under pressure
Write to Keith Zhai by [email protected]
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