BEIJING: Pinduoduo Inc's founder Colin Huang Zheng stepped down as chairman on Wednesday, even as the firm overtook rival Alibaba to become China's largest e-commerce platform by users.
The Shanghai-based company reported 788.4 million annual active buyers for the 12 months to the end of 2020, overtaking rival Alibaba Group to become China's largest e-commerce platform by users. Alibaba recorded 779 million annual active buyers during the same period.
But shares in US-listed Pinduoduo fell 8% on Wednesday, after founder Colin Huang Zheng told shareholders he would step down as chairman.
The 41-year-old Huang, who owns about 30% of Pinduoduo, will also give up his super voting rights.
Current chief executive Chen Lei succeeded Huang as chairman. “We are proud that we have become the world’s largest e-commerce platform by user number,“ Chen said on a call with analysts on Wednesday.
Lu Zhenwang, an independent e-commerce expert and chief executive officer of Shanghai-based Wanqing Consultancy, said the resignation of Huang triggered the fall. “It’s a natual reaction though I think the investors over-reacted.”
“After nearly six years of super-fast growth, the strategy of Pinduoduo won’t be significantly changed whoever the Chairman is,“ he added.
Managing director of Haitong International Natalie Wu called Huang's stepping down a vote of confidence showing Pinduoduo can go from strength to strengh without him.
“We do not think this could pose as a significant change to company’s operation,“ Wu said.
Pinduoduo reported a 146% surge to 26.55 billion yuan (RM16.83 billion) in the fourth quarter ended Dec 31, topping analysts' estimates of 19.22 billion yuan, according to IBES data from Refinitiv.
Pinduoduo reported marketing expenses increased 59% year on year to 14.7 billion yuan due to advertising and marketing costs.
The company is investing in agriculture and launched Duo Duo Grocery, a next-day grocery pickup service in August last year.
A research report by China Renaissance said Duo Duo Grocery will benefit Pinduoduo's total gross merchandise value (GMV) growth over the long term. Last year, Pinduoduo doubled its agriculture-related GMV to 270 billion yuan from the year before. – Reuters
