Pinduoduo Founder Colin Huang Loses $14 Billion as Stock Plummets
Colin Huang, the former chairman and founder of Chinese e-commerce giant PDD Holdings, saw his net worth drop by approximately $14 billion on Monday as the company’s stock took a hit of almost 30% following disappointing second-quarter revenues. Huang, who had recently become the richest person in China, now has an estimated net worth of $35.3 billion, a decrease of over 28%. This drop pushed him down the Forbes real-time billionaires list to No. 50 globally and No. 4 in China, behind other prominent figures like Zhong Shanshan, Zhang Yiming, and Ma Huateng.
PDD’s stock plummeted to $97.35 on Monday, its lowest price of the year, marking a drop of more than 30%. The company owns the popular online marketplace Temu, which has seen its stock rise by almost 22% over the past year. The significant decrease in stock value on Monday followed the company’s report of missed earnings and revenue estimates for the second quarter. Despite operating profit more than doubling from the same quarter last year, PDD’s sales of 97.06 billion yuan fell short of analysts’ expectations of 100.17 billion yuan. Jun Liu, vice president of finance at PDD, cited intensified competition and external challenges as reasons for the slowed revenue growth.
The economic downturn in China has affected various online marketplaces, including PDD, Alibaba, and JD.com. Alibaba reported a 28.77% decrease in net income in June, while JD.com missed its revenue projection in the same month. The country is currently experiencing high unemployment rates and falling household income, leading to changes in consumer behavior. CNBC reported on a viral social media trend called “revenge saving,” where young consumers are saving more due to the country’s weakening economy. PDD CEO Lei Chen stated that the company is willing to make short-term sacrifices as it invests in the business to address the challenges.
Colin Huang founded Pinduoduo, now known as PDD Holdings, in 2015 and has seen significant fluctuations in his net worth over the years. From an estimated $13.5 billion in 2019, his net worth peaked at $55.3 billion in 2021 and has averaged around $38.9 billion so far this year. Huang, who served as chairman of the company until 2021, remains a major shareholder. PDD’s launch of Temu, an online budget marketplace, in 2022 has positioned it against competitors like Shein. Huang has also founded other ventures, including online games company Xinyoudi and e-commerce platform Ouku.com.
In response to the challenges faced by PDD and other online marketplaces, companies are strategizing to navigate the evolving economic landscape in China. PDD’s steep decline in stock value and the subsequent impact on Colin Huang’s net worth reflect the volatility of the market and the competitive pressures faced by e-commerce firms in the country. As Huang and PDD adapt to the changing market dynamics, the future outlook for the company and its founder remains uncertain amid broader economic challenges in China.
