Pinduoduo Inc.’s billionaire chairman has stepped down from the board, relinquishing control of China’s fastest-growing e-commerce company the same day it announced its user base had surpassed Alibaba Group Holding Ltd.’s.
Founder Colin Huang will be replaced by Lei Chen, who keeps his chief executive officer title, the company said in a statement Wednesday. The move cements Huang’s retreat from the corporation that has helped him become China’s third-richest man, after he handed over the role of CEO last year.
Huang is leaving as its growth sets records. Sales in the December quarter climbed 146% to 26.5 billion yuan ($4.1 billion), beating the average 19.3 billion yuan forecast of analysts. Its revenue is growing at several-fold the pace of e-commerce rivals Alibaba and JD.com Inc., fueled by surging demand for online groceries and as more shoppers in less-developed cities venture online.
Pinduoduo is aiming to become the world’s largest grocer, Chen said. To achieve that target, the company intends to invest in an agriculture-focused logistics infrastructure platform over the next few years.
After stepping down from the role of chairman, Huang will give up the 1:10 super voting rights attached to his shares in Pinduoduo. He’s also pledged to extend the lock-up period for his shares by another three years, according to a statement by the company. The stock slid more than 5% in pre-market trading in New York.
His departure caps a rise meteoric even by Chinese internet industry standards, creating a $57 billion personal fortune and a $200 billion U.S.-listed company in a span of about six years with the help of heavy advertising. Pinduoduo’s stock rose more than fourfold last year and reached a record on Feb. 17, though the shares have since retraced after a wider technology selloff and China’s scrutiny of its internet companies.
Huang, a former Google engineer, will focus more on longer-term initiatives, including research in food and life sciences, the company said. In 2017, the billionaire said he was unlikely to spend the rest of his life at PDD, saying in a letter to employees he wanted to delegate more responsibility to younger colleagues to keep its entrepreneurial spirit alive.
Pinduduo’s annual active consumers climbed to 788 million in December, surpassing the 779 million users at Alibaba’s online marketplaces. During the recent Spring Festival holiday, daily users at Pinduoduo briefly surpassed those on the Taobao mobile app, according to researcher QuestMobile, underlining how the company has narrowed the gap with its larger rival.