Bloomberg
China’s third richest person gives up control over electronic commerce phenomenon
(Bloomberg) – The billionaire chairman of Pinduoduo Inc. resigned from the board and relinquished control of China’s fastest growing e-commerce business the same day it announced its user base Alibaba Group Holding Ltd. Exceeded. Huang will be replaced by Lei Chen, who retains his CEO, the company said in a statement on Wednesday. Huang’s withdrawal from the corporation helped him become the third richest man in China, after taking over the role of CEO last year. He sets up his co-founder Chen with the task of maintaining extraordinary growth. Sales in the December quarter rose 146% to 26.5 billion yuan ($ 4.1 billion), averaging 19.3 billion yuan. This is more than the pace of e-commerce competitors Alibaba and JD.com Inc., fueled by rising demand for groceries, and as more shopping in less developed cities dares to do so. “The departure was inevitable in light of Huang’s resignation as CEO in July last year,” Bernstein analyst Robin Zhu wrote in a research note. “But the timing was surprising, and skeptics note that the Chinese internet sector is 0-for-1 when iconic founders leave the building.” The stock slipped more than 7% in New York, giving up a fraction of its 370. increase in% over the past year, after Citigroup analysts pointed out that growth in e-commerce volumes lagged behind expectations. The gross trade value climbed by 66% in 2020, indicating a quarterly growth of 57%, wrote Alicia Yap, Citi. Read more: Its wealth increased by $ 25 billion. Then Jack Ma’s rival QuitPinduoduo wants to become the largest grocery store in the world, Chen said. To achieve the target, the company plans to invest in an agricultural-oriented logistics infrastructure platform over the next few years. After stepping down from the role of chairman, Huang will relinquish the 1:10 super vote right on his shares in Pinduoduo. . According to a statement from the company, he also promised to extend the lock-in period for his shares by another three years. His departure covers an increase in meteorite, even by Chinese Internet industry standards, creating a personal fortune of $ 57 billion and a US dollar of $ 180 billion. listed company in a span of about six years using heavy advertising. Pinduoduo’s share more than quadrupled last year, reaching a record high on February 17, although the stock has since retreated to greater technological sales and China’s investigation into its Internet companies. Huang, a former Google engineer, will focus more on longer-term initiatives, including research in food and life sciences, the company said. In 2017, the billionaire said he probably would not spend the rest of his life at PDD, and in a letter to employees said he wanted to give more responsibility to younger colleagues to keep his entrepreneurial spirit alive. “I hope that as the Chairman of the Board I will help these young people to independent maturity,” Huang said in a letter to shareholders, referring to PDD. “Although I can no longer be a true scientist myself, I will feel very happy and blessed if I have the chance to become a research assistant for a future, possibly great scientist.” Pinduduo’s annual active consumers rose to 788 million in December. surpasses the 779 million users in Alibaba’s online markets. According to researcher QuestMobile, the daily users of Pinduoduo briefly outperformed competitors of the Taobao app, underscoring how the company narrowed the gap with its larger competitor. billion yuan from 1.75 billion a year earlier, Pinduoduo said in a statement on Wednesday before the US market opened. The gross trade value in the twelve months ended December increased by 66% to 1.67 billion yuan. Bloomberg Intelligence says sales growth in Pinduoduo could remain strong as it increases the monetization of its significant customer and dealer base. The rapid expansion of sales can help reduce operating losses in the medium term. The company’s growing store ecosystem may become increasingly attractive to retailers who want to advertise. Despite heavy marketing costs, the Pinduoduo market model can maintain a high gross margin and can make a profit as turnover increases. – Vey-Sern Ling and Tiffany Tam, analysts Click here for the report However, growth has come at a price. The company faced an online setback earlier this year after an employee died in her early 20s after walking home at 1:30 a.m. and another committed suicide. The deaths have renewed criticism of the long hours typically worked by China’s tech giants – a 996-to-9-hour 996-hour office, six days a week, plus overtime – and prompted authorities to investigate the to start working conditions at Pinduoduo. more: Pinduoduo Worker’s Death Spurs Investigation, Online Furore The online grocery business has also been scrutinized by antitrust regulators. Earlier this month, according to the State Administration for Market Regulation, a fine was imposed on four foreign companies for excessive subsidies from Pinduoduo in the second half of 2020, a step that disrupted the market order. visit us at bloomberg.com. Sign up now to stay ahead of the most trusted business resource. © 2021 Bloomberg LP