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Business Leader of the Week: Meet Colin Huang, Billionaire founder of Pinduoduo

IFM_Pinduoduo Founder Colin Huang
In 2020, Colin Huang ranked second in the Huron Global Young Zhuang Sect Self-Made Rich List

Pinduoduo, also known as PDD, is a well-known Chinese e-commerce platform that rose to prominence quickly after its launch in 2015. Pinduoduo has grown to be one of the biggest e-commerce players in China and a significant global tech player thanks to its distinctive business model and emphasis on social commerce.

Pinduoduo sets itself apart from established e-commerce behemoths like Alibaba and JD.com by incorporating social components. In order to receive discounts on products, Pinduoduo’s ‘team purchase’ model encourages users to form groups with family and friends. This fosters a sense of neighbourhood and social engagement while shopping.

The business initially established itself in smaller, less developed cities and rural areas, effectively serving markets that were underserved by competing e-commerce platforms. Its quick expansion was significantly facilitated by this tactic. The Pinduoduo app offers a variety of items at affordable prices, including electronics, apparel, fresh produce, and more.

The inventive way that Pinduoduo approaches agriculture is another important factor in its success. By putting farmers and consumers in direct contact, the platform helps cut down on waste and guarantees more equitable prices for agricultural goods. This has benefited rural farmers in China.

Pinduoduo raised a substantial amount of money and raised its profile in international markets when it went public on the NASDAQ in 2018. The company became one of the most valuable tech start-ups globally as its market capitalization rose to remarkable heights very quickly.

Pinduoduo has faced several difficulties along the way, such as issues with intellectual property rights and counterfeit goods. The business has worked to resolve these problems and improve the standard and legitimacy of the goods available in its marketplace.

Pinduoduo is a significant participant in the Chinese e-commerce market and is renowned for its cutting-edge social commerce model, emphasis on affordability, and support of rural development. In the global tech landscape, it is a notable company due to its rapid growth and market presence.

The brain behind this successful venture is 43-year-old Chinese businessman, investor, and philanthropist Colin Huang. He is the founder and former CEO of the company.

Who is Colin Huang?

  • Colin Huang was born in 1980 in the outskirts of Hangzhou, Zhejiang, China. His parents were middle-class factory workers
  • He began studying computer science at age 18 at Chu Kochen Honors College of Zhejiang University, and completed his master’s degree from the University of Wisconsin in 2004
  • After completing his master’s degree, Colin Huang interned at Google and Microsoft, and in 2004 he joined Google as a full-time employee
  • In 2006, he returned to China with Kaai-fu Lee to expand Google services in China
  • After resigning from Google in 2007, Colin Huang started the e-commerce site Oku, and sold it for USD 2.2 million in 2010
  • In 2015, he founded and led the Shanghai-based company Pinduoduo, which earned a revenue of 1.4 billion yuan (USD 280 million) in 2017
  • In 2019, the company generated revenue of USD 4.33 billion (30.14 billion renminbi) and became publicly traded following an initial public offering in the United States in July 2018, raising USD 1.6 billion in investment backing capital.
  • After the public offering was floated on NASDAQ, Colin Huang’s 47% stake in Pinduoduo was valued at USD 14 billion, making him the thirteenth richest person in China
  • In 2020, he was ranked second in the Huron Global Young Zhuang Sect Self-Made Rich List
  • The same year, Colin Huang stepped down as CEO of Pinduoduo but retained his titular position as the company’s chairman
  • Colin Huang and the Pinduoduo founding team have donated USD 100 million to the Starry Night Charitable Trust to ‘support fundamental research in biomedical science, agriculture, and food’
  • According to Bloomberg, as of February 2023, Colin Huang’s net worth is around USD 38.6 Billion

Temu, PDD’s E-commerce Platform Charges Sevice Fee Of 0.5%

A new contract known as the ‘Customer Service Outsourcing Service Agreement’ has recently been made available to sellers on Temu, a cross-border e-commerce platform operated by Pinduoduo.

The public interprets the agreement’s reference to a service fee rate of 0.5% as a sign that the platform will begin levying commissions.

The new agreement grants Party A (Temu) the authority to assess a service fee equal to 0.5% of the actual payment amount made by customers in accordance with store orders.

If an order is refunded, no further service fee will be assessed at the time of the refund, however, any service fees already paid will not be reimbursed.

Likewise, Party B hereby authorizes the platform to deduct the relevant service fee directly from the sales proceeds, unconditionally and irrevocably.

Any seller who opens a store in Temu is required to sign this agreement right away. There’s just one way to confirm: read and click ‘Accept.’ If not, the store’s operations cannot continue and the effectiveness and quality of its services cannot be guaranteed.

From the platform’s point of view, Temu’s front end is quickly growing throughout different nations and areas.

It is standard business procedure to use customer service outsourcing to handle excessive workloads, resulting in a 0.5% fee that falls under the category of third-party service fees.

Nonetheless, from the sellers’ point of view, any costs incurred during platform operations are readily interpreted as an indication of commission fees.

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