SINGAPORE – Chinese e-commerce company Pinduoduo Inc.’s
PDD -12.31%
founder and chairman, Colin Huang, stepped down from the company on Wednesday, even as the five-year company caught up with Alibaba Group Holding Ltd.
BABA 2.22%
by becoming the nation’s largest e-commerce company by annual active buyers.
Mr. Huang, 41, resigns as China’s powerful Internet sector is coming under increasing government control. His resignation follows another departure from a major industry company: Simon Hu, the Chief Executive of finance tech giant Ant Group Co., stepped down earlier this month.
In a letter to shareholders, Mr. Huang said he was stepping down to pursue personal interests in the life sciences. He is in talks with Chinese universities to set up biotechnology research laboratories, a person familiar with the matter said. For his next step, he will study biotechnology in these labs, the person said.
Mr. Huang said in a letter to shareholders that the board approved his resignation as chairman on Wednesday. Chief Executive Officer Chen Lei will assume the additional role of Chairman of the Nasdaq-listed company.
In 2020, Pinduoduo had 788.4 million active buyers annually, users who bought at least one item last year, 35% more than a year earlier. It was the first time that Shanghai-based Pinduoduo exceeded Alibaba’s 779 million annual active buyers.
The company released its October-December results on Wednesday. Pinduoduo’s quarterly sales increased 146% year over year to approximately $ 4 billion.
Mr. Huang, who stepped down as CEO of Pinduoduo in July, remains the company’s largest shareholder. According to the letter, he promised to extend the lock-up period for his shares by another three years.
The supervisory rights attached to his shares were removed when he relinquished executive responsibilities, and Mr. Huang said he would entrust the voting rights of these shares to the board.
Mr. Huang said in the letter that the pandemic has accelerated Pinduoduo’s improvements in its operations and helped nurture a new generation of leaders. “It’s time to let them form the Pinduoduo they want to build,” he said.
Beijing has spent the past few months trying to rein in China’s powerful internet sector, including e-commerce companies. One of the worst blows was Alibaba, which is under antitrust investigation; its fintech affiliate Ant, whose IPO was canceled in November; and its founder Jack Ma.
After Jack Ma criticized the Chinese regulators, Beijing sank the IPO of its fintech giant Ant and largely disappeared from public view. WSJ is watching recent videos of the billionaire to show how he got into trouble.
This month, Chinese regulators fined Pinduoduo, along with several other e-commerce companies, for alleged anti-competitive practices.
Mr. Huang, a former Google engineer, founded the Shanghai-based company in 2015. The company is backed by social media giant Tencent Holdings Ltd.
and venture investor Sequoia Capital China.
Since leaving the position of CEO, Mr. Huang had distanced himself from Pinduoduo’s day-to-day operations, a person familiar with the matter said.
Mr. Chen, a data scientist who studied at the University of Wisconsin-Madison, has been deeply involved in strategic and operational decisions as a member of the founding team.
China’s internet sector is under pressure
Write to Keith Zhai at [email protected]
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