The Rise, Fall and Upheaval
Photo: Reuters
After several successful ventures in gaming and e-commerce, Colin Huang fell ill and retired temporarily. The young businessman stayed home for a year thinking about his next move.
A former Google engineer eventually launched Pinduoduo, an e-commerce platform known for selling cheap products with great deals, in 2015. He quickly rose to the ranks of the world's richest people, with his fortune reaching $71.5 billion. dollars in early 2021.
Like many “Covid billionaires,” as they are often called, he saw his fortune dissipate as quickly as it was built, losing 87% of its value in about a year.
Huang's decline has been steep as the slowdown in the global pandemic has coincided with a sharp downturn in China's private sector.
Then something amazing happened: Huang’s PDD Holdings began to recover. Not spectacularly, but at a steady pace and with its expansion outside China under the Temu brand helping its founder to overcome the weaknesses of the Chinese market.
As a result, the 44-year-old Huang has now become the richest man of China, according to the Bloomberg Billionaires Index. With a fortune of $48.6 billion, it displaced bottled water king Zhong Shanshan, who held the top spot as of April 2021.
Huang's remarkable rise has been fueled by changing Chinese market conditions, such as a housing crisis that turned into a prolonged slowdown. He is also the first tech tycoon to top the wealth list in more than three years.
Meanwhile, his company has been blamed by suppliers for price pressure as well as tough labor practices. conditions.
Unlike Ma, the English teacher-turned-Alibaba founder, Huang represents a new generation of Chinese tech entrepreneurs who began their careers by seizing opportunities across national borders in the global marketplace.
Math genius
At the age of 12, his mathematical genius earned him a place at the Hangzhou School, where he was classed with the children of China's political and economic elite. After graduating with a computer science degree from Zhejiang University, he left his country in 2002 to pursue a master's degree at the University of Wisconsin.
Two years after graduation, he returned to help create Google. China. He founded his first company in 2007 and then sold it in 2010 to start a new one that helped companies promote on sites like Alibaba's Taobao or JD.com. Due to an infection, he retired in 2013. It was then that he conceived the idea for the development of Pinduoduo.
Explaining PDD's philosophy in an interview with Caijing magazine in 2018, he said: “We don't offer people in Shanghai the feeling of living a Parisian life, but we offer people in Anhui paper towels and fresh fruit.” “The goal is not to be cheap, but to make users feel like they got a good deal,” he added.
Temu time
Huang stayed out of the public eye after stepping down as CEO of PDD in 2020 and stepping down as chairman of the company's board in 2021 as Beijing began cracking down on China's tech giants. He had then expressed an interest in food and life sciences research. It was around this time that PDD – and her net worth – began to fall.
But Temu, a kind of global PDD, supported the company's recovery. It shot to the top of US app stores in September 2022, catering to inflation-weary Americans with cheap, unbranded products shipped directly from China. PDD had revenue of 248 billion yuan ($35 billion) last year, a 90% jump from 2022.
All this, combined with the fact that China abandoned its Covid-Zero policy in December 2022, led to a rise in PDD's valuation. In November, the company overtook Alibaba for the first time to become China's second-largest internet company.
Grunting hours
However, despite its breakneck growth, the company did not improve its practices. Even after investigating the working conditions that led to a worker's death in 2021, PDD continues to require workers to work from 11 a.m. to 11 p.m., six days a week, plus overtime.
Temu's ultra-cheap deals are also causing a financial drain on merchants and third-party sellers, who point out that the e-commerce giant is increasingly putting pressure on the market. Protest rallies by small suppliers chanting slogans outside Temu's offices in Guangzhou have been held this summer over what they say are the company's “unfair” practices.
Meanwhile, the company is taking advantage of the trade gap for shipments worth up to $800 in the US, which remain tax-free. It is thus able to send small parcels of goods to private Americans from its warehouse in China.
In addition, it displays attractive messages on its website, such as: “Shop like a billionaire.”
Currently, according to analysts' estimates, Temu remains in the acquisition phase. Then, when consumers are more addicted, maybe then they will start to accept small increases in its prices. So Temu is in a phase of expanding its market share.
