Just In! China's richest person, leadership change!

After many years, the title of China's richest person has changed hands!

On August 9th, according to the Bloomberg Billionaires Index, 44-year-old Pinduoduo founder Huang Zheng surpassed "Bottled Water King" Zhong Shanshan with a net worth of $48.6 billion, becoming the new richest person in China.

Huang Zheng is also the first tech company founder to top the China Rich List in nearly three years. He founded Pinduoduo in 2015, and the e-commerce giant grew rapidly thereafter. Huang resigned as CEO in 2020 and as chairman in 2021. His personal net worth peaked in early 2021 at $71.5 billion.

Huang Zheng Becomes China's Richest Person

On the afternoon of August 9th, the Bloomberg Billionaires Index showed that Pinduoduo founder Huang Zheng had become the richest person in China. With a net worth of $48.6 billion, he replaced Nongfu Spring founder Zhong Shanshan, who had held the top spot since April 2021, as the wealthiest person in China.

On the global rankings, Huang Zheng is currently ranked 25th, closely followed by Zhong Shanshan at 26th with a net worth of $47.4 billion. Additionally, Tencent founder Ma Huateng and ByteDance founder Zhang Yiming are ranked 32nd and 33rd globally, with net worths of $42.4 billion and $42.2 billion, respectively.

Huang Zheng was born in Hangzhou, Zhejiang in 1980. He graduated from Hangzhou Foreign Language School in 1998 and was admitted to Zhejiang University's Chu Kochen College with a major in computer science. After graduating in 2002, he was admitted to the University of Wisconsin-Madison in the United States. After obtaining a master's degree in computer science in 2004, Huang Zheng chose to join the then-emerging Google. In 2006, along with Li Kaifu, he was sent to China to expand business and establish Google's China office. In 2007, Huang Zheng left Google and started his own business, founding mobile e-commerce, e-commerce operations, and gaming companies.

In 2014, due to illness, Huang Zheng rested at home for 9 months. During his recovery, he discovered significant development opportunities in the mobile social field: people spent 40% of their phone usage time on mobile social apps, but the achieved e-commerce sales accounted for less than 1% of total e-commerce sales. Continuously improving along the new social + e-commerce model, the predecessor of Pinduoduo, "Pinghaoguo," was born. In April 2015, Pinghaoguo went online, establishing a new social e-commerce model. In September of the same year, the internally incubated "Pinduoduo" was merged with "Pinghaoguo," and Huang Zheng became the chairman of the new company.

Since its founding in 2015, Pinduoduo has grown rapidly. With huge discounts and a wide variety of products, Pinduoduo has attracted consumers and sometimes offered astonishingly low prices in the fiercely competitive field. Within a few years, Pinduoduo has developed into one of China's most successful e-commerce empires, comparable to Jack Ma's Alibaba In March 2018, Pinduoduo completed the latest pre-IPO round of financing with a valuation of $15 billion and raised $3 billion, with Tencent as the leading investor. On July 26, 2018, Pinduoduo officially landed on the NASDAQ in the United States. On July 1, 2020, Huang Zheng announced his resignation as CEO of Pinduoduo, and Chen Lei took over.

Pinduoduo's 2020 financial report shows that the cumulative number of new active buyers exceeded 200 million that year. By the end of 2020, Pinduoduo had 788.4 million annual active buyers, while Alibaba had 779 million and JD.com had 472 million. This also means that in terms of active buyers, Pinduoduo has surpassed Alibaba and become the largest e-commerce platform in China in terms of user scale.

In early 2021, Huang Zheng's personal net worth reached its peak at $71.5 billion (approximately RMB 513.2 billion). On March 17, 2021, Huang Zheng announced in his annual shareholder letter that he would resign as chairman, with current CEO Chen Lei taking over. Huang Zheng stated that after stepping down as chairman, he would focus more on combining his lifelong interests and dedicate himself to research in the fields of food science and life science. Even if he cannot become a scientist, perhaps there is an opportunity to become the assistant of a great scientist, which would also be a very happy thing.

Pinduoduo's Strong Performance

Since stepping down as CEO of Pinduoduo in 2020 and resigning from the board in 2021, Huang Zheng has remained relatively low-key.

However, in the e-commerce sector, Pinduoduo is thriving. In mid-May this year, Pinduoduo's financial report showed that in the first quarter of 2024, Pinduoduo achieved revenue of 86.8 billion yuan, a year-on-year increase of 131%. This was mainly due to factors such as GDP growth recovering to above 5% in the first quarter, seasonal factors such as Spring Festival consumption, and favorable policies such as trade-in programs; Non-GAAP adjusted net profit increased by 202.2% to 30.602 billion yuan, far exceeding market expectations; Non-GAAP net profit margin was 35.3%, mainly due to effective cost control and improved operational efficiency.

TF Securities pointed out that Pinduoduo has a solid low-price mindset, a continuously improving product supply chain, and is expected to drive an increase in user shopping frequency. The overall GMV growth rate may exceed the industry average; at the same time, with the increase in the penetration rate of promoted merchants across the platform and the steady increase in the proportion of billion-yuan subsidies, the overall monetization rate is expected to increase. The company adheres to a high-quality development strategy, mainly reflected in: 1) high-quality consumption, continuously strengthening the ability of "more affordable + good service"; 2) high-quality supply, delving into manufacturing and agricultural industrial belts, optimizing supply chain efficiency; 3) high-quality ecology, establishing a billion-yuan ecological special fund, tilting platform resources towards high-quality merchants and products, vigorously supporting high-quality merchants, small and medium-sized enterprises, and farmers, and enhancing platform governance capabilities. With the continuous strengthening of the company's supply chain and operational capabilities, the platform's ecological construction is becoming more perfect, and the per capita GMV may increase, with the company still expected to gain market share First Shanghai stated that currently PDD's main site maintains a leading position in the industry. Due to the large number of players and homogenized competition, this year remains a challenging year for domestic e-commerce. The advertising expenditure of merchants depends on the efficiency of the e-commerce platform, and PDD still has certain advantages compared to its peers. With the competition in the grocery shopping business gradually easing, in the first quarter, Duo Duo Mai Cai was driven by both customer unit price and profit. The target price of PDD has been raised to $211.80, maintaining a buy rating.

Recently, there have been reports in the media that Douyin e-commerce has adjusted its operational priorities, no longer prioritizing "price competitiveness," and will focus on GMV growth in the second half of the year. Previously, Alibaba also advanced the GMV assessment and weakened the emphasis on price competitiveness. Zheshang Securities believes that Alibaba and Douyin have successively raised the priority of GMV assessment and reduced the emphasis on "price competitiveness," which is beneficial for alleviating domestic e-commerce price competition, overall benefiting the competitive environment of domestic e-commerce, especially PDD. Zheshang Securities stated that the improvement in domestic e-commerce competition, the rapid development of Temu (PDD's "overseas version"), PDD's undervaluation and high growth, maintain a buy rating.

In addition, on August 5th, the Fortune Global 500 list was released. The total revenue of the Fortune Global 500 companies this year is about $41 trillion, equivalent to one-third of the global GDP, slightly increasing by about 0.1% compared to last year. Leading Chinese technology companies include Foxconn, JD.com, China Mobile, Alibaba, Huawei, etc. Large companies in the internet sector have generally risen, among the five Chinese internet giants, JD.com, Tencent, and Meituan have all improved their rankings, while PDD made its debut on the list.

Original author: Chen Ming, Source: Securities China, Original title: "Just now! China's richest man, change of guard!"