Colin Huang, chief executive and founder of Pinduoduo, will speak at the company’s listing ceremony at Shanghai Tower on July 26, 2018 in Shanghai, China.
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Colin Huang, founder of the fast-growing Chinese e-commerce giant Pinduoduo, has resigned as chairman.
In a shocking move, the company announced Wednesday that Huang is stepping down from the board of directors to examine future growth ideas.
Pinduoduo was listed on the technology-focused Nasdaq stock exchange in New York in July 2018, just three years after its founding. At the time of the first public offering, its shares were priced at $ 24.6. Today they trade at $ 160.9 and are worth $ 197 billion.
The Shanghai company’s share price was down 7.6% in pre-market trading on Wednesday off the news.
In a letter to shareholders, Huang said Pinduoduo has “become a youth entering adolescence.”
“Keeping track of his transformation and rapid growth, I am both happy and anxious. Pinduoduo will have his own growth journey whether I am anxious, enthusiastic or scared as a defender,” he wrote. e. “I hope that my role as chair of the board will help this young man to become an independent adult. “
Pinduoduo said Huang will “pursue research in the food and life sciences, areas where developments could disrupt China’s largest agricultural platform.”
Chen Lei, who replaced Huang as Pinduoduo CEO in July last year, will now be chairman of the company.
Huang has trusted the board to exercise its voting rights as a shareholder and has vowed not to sell its shares for three years. Pinduoduo said the 1:10 voting rights attached to Huang shares have been removed.
Competing with Alibaba and JD
With more than 788 million users, Pinduoduo is a major competitor to e-commerce giants such as Alibaba and JD.com. Its success is partly due to a “social shopping model” that encourages consumers to share links with items they buy with friends and to participate in group shopping.
The company said agriculture on Pinduoduo more than doubled to 270 billion Yuan ($ 42 billion) in 2020 due to Covid’s restrictions forcing people to shop online.
“Improved efficiency in distribution and sales still does not fundamentally add value to agricultural products, or significantly improve our health,” Huang wrote in his letter to shareholders.
He said: “What can we do if we go a step further and go beyond efficiency improvements?”
As the company’s founder, Huang said he may be “the most appropriate person to undertake this task by stepping out of the industry and comfort zone to embark on a study tour.”
Huang noted that the trip would be “much better” if it was in his personal interests.