SINGAPORE – Chinese e-commerce company Pinduoduo Inc.’s
PDD -10.85%
founder and president, Colin Huang, left the company on Wednesday, even when the five-year-old company overtook Alibaba Group Holding Ltd.
BABYSITTER 2.61%
to become the country’s largest e-commerce company in active annual buyers.
Huang, 41, is stepping down at a time when China’s powerful internet sector is under increasing government scrutiny. His resignation follows another departure from a major company in the industry: Simon Hu, chief executive of financial technology giant Ant Group Co., stepped down earlier this month.
In a letter to shareholders, Huang said he was stepping down to pursue personal interests in the biological sciences. He is in talks with Chinese universities to set up biotechnology research labs, said a person familiar with the matter. For his next step, he will study biotechnology in these laboratories, the person said.
Huang said in a letter to shareholders that the board approved his resignation as chairman on Wednesday. CEO Chen Lei will take on the additional role of chairman of the Nasdaq-listed company.
In 2020, Pinduoduo had 788.4 million active annual buyers, users who bought at least one item last year, an increase of 35% over the previous year. It was the first time that Shanghai-based Pinduoduo has exceeded Alibaba’s 779 million active annual buyers.
The company released its October-December results on Wednesday. Pinduoduo’s quarterly revenue increased 146% year-over-year, to about $ 4 billion.
Huang, who stepped down as CEO of Pinduoduo in July, remains the company’s largest shareholder. He promised to extend the blocking period for his shares for another three years, according to the letter.
The supervoting rights attached to his shares were removed when he relinquished executive responsibilities, and Huang said he would entrust the voting rights of those shares to the board.
Mr. Huang, in the letter, said that the pandemic accelerated Pinduoduo’s improvements in its operations and helped to form a new generation of leaders. “It’s time to let them shape the Pinduoduo they want to build,” he said.
In recent months, Beijing has struggled to control China’s powerful internet sector, including e-commerce companies. Among the hardest hit is Alibaba, which is under antitrust investigation; its fintech affiliate 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 he practically disappeared from public view. WSJ watches recent videos of the billionaire to show how he got himself into trouble.
This month, Chinese regulators fined Pinduoduo, along with several other e-commerce companies, alleging anti-competitive practices.
Mr. Huang, a former Google engineer, founded the Shanghai-based company in 2015. The company is supported by social media giant Tencent Holdings Ltd.
and venture capitalist Sequoia Capital China.
Ever since he stepped down as CEO, Huang has moved away from Pinduoduo’s daily operations, said a person familiar with the matter.
Mr. Chen, a data scientist who studied at the University of Wisconsin-Madison, was closely involved in strategic and operational decisions as a member of the founding team.
China’s Internet sector under pressure
Write to Keith Zhai at [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8