The billionaire founder and chairman of Pinduoduo, Colin Huang, has stepped down as board chairman and handed responsibilities to company chief executive officer Chen Lei just as the e-commerce giant overtook its rival Alibaba as China’s largest online selling platform.
Why it matters: Chinese workplace culture is to a great extent influenced and shaped by founders’ personalities and management styles. The departure of a leader as notoriously driven as Huang is expected to prompt a significant shift at Pinduoduo.
- The company’s share prices slumped 7.1% Wednesday on the news.
- Huang’s resignation comes at a time when the company faces criticism for its grueling overtime culture, brought to light after the highly publicized deaths of two employees and complaints from others.
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Details: Colin Huang said in a letter sent to shareholders on Wednesday that he had resigned as the company’s chairman. Chen Lei will take over while continuing in his existing role as CEO.
- Huang’s voting rights were passed to the board, but the 1:10 super voting rights attached to his shares will no longer apply. He pledged to hold his 29.4% share of Pinduoduo for the next three years.
- Huang said he is embarking on a new journey exploring food and life sciences.
- Along with shareholder letter, Pinduoduo reported fourth quarter revenue of RMB 26.5 billion ($4.1 billion), climbing 146% year on year from RMB 10.8 billion in the same quarter of 2019. The growth was primarily driven by an increase in ad revenue and contribution from merchandise sales, the company said. Pinduoduo’s revenue beat the high end of analyst estimates compiled by Yahoo Finance.
- The company’s active buyers in jumped 35% year on year to 788.4 million from 585.2 million in 2019, overtaking rival Alibaba, which reported 779 million annual active users during the same period.
- The e-commerce platform is repositioning itself as China’s largest agriculture platform, according to CEO Chen Lei’s comments during the earnings call held Wednesday evening, as it shifts toward selling agricultural products and offering services to farmers.
- Chen said Pinduoduo’s gross merchandise volume (GMV) for agricultural products doubled on an annual basis to more than RMB 270 billion in 2020, though it remained a modest share compared with the company’s total GMV of RMB 1.7 trillion for the year.
Context: Serial entrepreneur Huang, 41, has stepped away from the company he founded five years ago to devote himself to the research of food and life science. The areas have significant overlap with Pinduoduo’s new business focus—agriculture. Agritech was mentioned in the 14th Five-Year Plan an important industry for China, which seeks to shore up agricultural efficiency and innovation.