Colin Huang, founder and CEO of the online group discounter Pinduoduo, speaks during the company’s stock trading debut at the Nasdaq Stock Market in New York, during an event in Shanghai, China July 26, 2018. Photo by Yin Liqin/CNS via Reuters
Colin Huang, the founder of Chinese e-commerce giant PDD Holdings, experienced a $5.7 billion drop in his wealth overnight as the company’s Nasdaq-listed shares crashed on Tuesday due to lackluster quarterly earnings.
The 45-year-old’s net worth, tied to his stake in PDD despite stepping down as chairman in 2021, now stands at $36.3 billion, according to Forbes.
Once China’s richest billionaire in August 2024, the former Google employee has fallen to the sixth-wealthiest in the country.
PDD, the operator of the Pinduoduo e-commerce platform which used to boast triple-digit revenue and profit growth quarterly, saw its shares dropped 13.6% in the U.S. on Tuesday.
Revenue grew 10% year-on-year to CNY95.7 billion (US$13.2 billion), while net income attributable to shareholders plunged 47% year-on-year to CNY14.7 billion.
PDD executives have outlined several challenges. Higher tariffs have impacted its international Temu platform, and domestic competition is intensifying.
“In our global business, radical change in [the] external policy environment such as tariffs has created significant pressure for our merchants,” PDD Chairman and co-CEO Chen Lei stated in a call transcript, noting that merchants “often lack the capability to adapt quickly and effectively,” Forbes reported.
To address this, PDD has reduced merchant fees and increased support, including marketing assistance. In April, the company pledged CNY100 billion over three years to bolster merchant support initiatives, which are expected to dent profitability.
Analysts say that intense competition among Chinese e-commerce firms also add to the difficulties.
Eric Wen, head of research at Blue Lotus Capital Advisors in Hong Kong, highlighted that PDD faces fierce domestic competition from Alibaba and JD.com. These e-commerce giants are investing in “instant retail,” aiming to deliver online orders in an hour or less to capture market share.
Huang established Pinduoduo in 2015 and described in its IPO prospectus as “a combination of Costco and Disneyland,” reflecting its “gamified” shopping app nature with fun features to encourage daily visits.
