Colin Huang, the 44-year-old founder of Temu, has risen to the position of China’s richest man, dethroning Zhong Shanshan, the bottled-water tycoon and founder of Nongfu Spring, who had held the title since April 2021.
According to the Bloomberg Billionaire Index, Huang, a serial entrepreneur, now boasts a net worth of $48.7 billion (€44.50 billion). Known for his knack for building successful online ventures, the 44-year-old’s wealth primarily stems from his 25% stake in Pinduoduo, a leading Chinese e-commerce platform.
Pinduoduo, or PDD, which is headquartered in Shanghai, reported 751 million monthly active users as of May 2022. Huang’s shares are held through two British Virgin Islands-based entities, Walnut Street Investment and Walnut Street Management, as detailed in Pinduoduo’s 2023 annual report.
In July 2020, Huang announced a reduction in his shareholding and his decision to step down as CEO. In a letter published on the company’s website, he outlined the donation of a 2.4% stake in Pinduoduo to an irrevocable charitable trust and the transfer of a 7.7% stake to the Pinduoduo Partnership to support scientific research. Additionally, a 2.7% stake was transferred to an early investor.
What we know
Colin Huang, raised in Hangzhou, China, demonstrated academic excellence from an early age, attending the esteemed Hangzhou Foreign Language School at 12. He later pursued his studies at Zhejiang University, followed by a master’s degree in computer science from the University of Wisconsin.
Huang began his career at Google’s headquarters in 2004, serving as a software engineer and project manager. In 2006, he relocated to China, contributing to the establishment of Google China. In 2007, Huang founded Ouku.com, an e-commerce platform specializing in consumer electronics, which he sold in 2010. Subsequently, he launched Leqi, a marketing platform for companies on major Chinese e-commerce sites, and ventured into gaming with role-playing games on WeChat.
In 2013, health concerns prompted Huang to retire temporarily. During this period, he conceived the idea for Pinduoduo (PDD), inspired by the strategies of Alibaba and Tencent. Huang secured $8 million in initial funding and launched PDD in 2015, focusing on collaborative group buying. By 2016, PDD raised $100 million, fueling its rapid expansion. The company went public in the U.S. in 2018.
Huang stepped down as CEO in 2020 and as chairman in 2021 to pursue research in food and life sciences.
What to know
This diverse background places him among a new wave of Chinese billionaires who have made their fortunes in the tech industry, known for their willingness to take risks and innovate.
Temu, launched in 2022 by Huang’s PPD Holdings, has become the cornerstone of his wealth. The platform offers a wide range of heavily discounted products, leveraging China’s low manufacturing costs and direct-to-consumer shipping to maintain competitive prices. Temu has quickly gained popularity in both the United States and the United Kingdom, thriving in an economic environment where consumers are increasingly seeking value for money.
Despite its rapid growth, Temu has not been without challenges. The company has faced supplier protests in China, particularly in Guangzhou, over what suppliers claim are disproportionately high fines for issues such as poor customer service, incorrect product descriptions, and late deliveries. These fines can be as steep as five times the product’s wholesale price, leading to significant dissatisfaction among suppliers.
Additionally, there have been reports of Temu withholding payments for products sold, and concerns over PPD Holdings’ demanding work schedules, described as “11 am to 11 pm plus overtime.”
Further complicating matters, the European Union is reportedly considering new import taxes on packages from Chinese online discount retailers like Temu, Shein, and AliExpress. This move is aimed at protecting European businesses from the price pressures exerted by these low-cost competitors and could impact Temu’s ability to maintain its current pricing strategy in Europe. (Nairametrics)
