A Chinese entrepreneur born in the 1980s has amassed an eye-popping US$12.8 billion virtually overnight, after last week’s Nasdaq debut of his Pinduoduo shot him into the nation’s billionaire club.
Colin Huang, 37, who shares eastern Zhejiang provincial roots with the founder of e-marketplace juggernaut Alibaba, is now being touted as “little Jack Ma”.
Last Thursday, Huang’s Pinduoduo debuted on Nasdaq with a 44 per cent initial gain. Even though the share price of his company, hailed as the Groupon of China, later retreated, the 37-year-old Huang still managed to break into the top 100 club on the Bloomberg Billionaire index.
His 50% stake in Pinduoduo is worth US$30 billion, putting him in 12th spot among the Chinese super-rich, above many more well-known business gurus like Liu Qiangdong, founder of Alibaba rival JD.com.
Huang was admitted into the prestigious Zhejiang University as a child prodigy and graduated with a degree in computer science. After leaving the University of Wisconsin-Madison in 2002, he spent three years working for Google.
Upon his return to China, the young entrepreneur dabbled in the nation’s emerging e-commerce sector with the founding of a small gaming and online buying website. It was the making of his first fortune.
This first triumphant sortie into business convinced Netease chairman Ding Lei, SF Express founder Wang Wei and former video hosting platform Toubou chief executive Sun Yuyu to pour money into Pinduoduo in late 2015 when Huang looked to replicate the Groupon model in China.
In only three years, Pinduoduo has established itself as China’s third largest e-commerce portal behind Alibaba’s Taobao and JD.com. Gross sales in the last 12 months reached US$15 billion, thanks to unbeatable prices on the group buying platform as well as its seamless integration with Tencent’s ubiquitous social networking app WeChat.
Tencent now owns an 18.5% stake in Pinduoduo.
A packet of 12 toilet rolls, for instance, is sold for as little as 2 yuan (US$ 0.29) on Pinduoduo, or one-fifth of the price at bricks-and-mortar stores.
iPhone knock-offs and pirated goods also abound on the platform, where wireless bluetooth earbuds that are close replicas of Apple Inc’s AirPods (official price in the USA: US$159) sell for 100 yuan (US$14.65).
Pinduoduo’s business model is based on the factory-to-consumer model which eliminates multiple layers of middle men between suppliers and buyers to ensure the best prices.
The app, which now boasts a user base of 300 million, also specializes in the novel grower-to-consumer model that delivers fresh produce direct from farms to tables.