SINGAPORE: Chinese e-commerce company Pinduoduo Inc
PDD -10.42%
founder and president Colin Huang left the company on Wednesday, even when the five-year-old company overtook Alibaba Group Holding Ltd.
BABA 2.37%
to become the largest e-commerce company in the country by annual active buyers.
Huang, 41, is resigning because China’s powerful Internet sector is under increasing government control. His resignation came after another departure from a major company in the sector: Simon Hu, the chief executive of financial technology giant Simon Hu, resigned earlier this month.
In a letter to shareholders, Mr. Huang said he was giving up pursuing personal interests in life sciences. He is in talks with Chinese universities to set up biotechnology research labs, said one person familiar with the matter. For his next step, he will study biotechnology in these labs, the person said.
Huang said in a letter to shareholders that the board approved resigning as chairman. CEO Chen Lei will take on the additional role of chairman of the Nasdaq-listed company.
In 2020, Pinduoduo had 788.4 million active buyers annually, users who bought at least one item last year, 35% more than the previous year. It was the first time that Shanghai-based Pinduoduo surpassed Alibaba’s 779 million active annual buyers.
The company released its results from October to December on Wednesday. Pinduoduo’s quarterly revenue rose 146% year-over-year to $ 4 billion.
Huang, who left the position of CEO of Pinduoduo in July, remains the company’s largest shareholder. According to the letter, it undertook to extend the closing period of its shares by a further three years.
The oversight rights attached to his shares were abolished when he relinquished executive responsibilities and Mr Huang said he would entrust the voting rights of those shares to the board.
Huang, in the letter, said the pandemic has accelerated Pinduoduo’s improvements in its operations and helped prepare a new generation of leaders. “It’s time to let them shape the Pinduoduo they aspire to build,” he said.
Beijing, in recent months, has been controlling China’s powerful Internet sector, including e-commerce companies. Among those most affected was Alibaba, which is under antitrust probe; its fintech subsidiary Ant, whose initial public offering was canceled in November; and its founder Jack Ma.
After Jack Ma criticized Chinese regulators, Beijing rejected the initial public offering of its fintech giant Ant and largely disappeared from public view. WSJ watches recent videos of the billionaire to show how he got into trouble.
This month, Chinese regulators fined Pinduoduo, along with several other e-commerce companies, alleging anti-competitive practices.
Huang, a former Google engineer, founded the Shanghai-based company in 2015. The company has the support of social media giant Tencent Holdings Ltd.
and venture capitalist Sequoia Capital China.
Since leaving the post of CEO, Huang had moved away from Pinduoduo’s day-to-day operations, said a person familiar with the matter.
Chen, a data scientist who studied at the University of Wisconsin-Madison, has been closely involved in strategic and operational decisions as a member of the founding team.
China’s Internet sector under pressure
Write to Keith Zhai to [email protected]
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