Colin Huang’s reign as China’s richest person only lasted about two weeks.
A slump Monday in shares of PDD Holdings Inc., the parent company of e-commerce giant Temu, sent Huang’s fortune tumbling by $14.1 billion, his biggest one-day loss ever. Huang is now the fourth-wealthiest person in China with a net worth of $35.2 billion, according to the Bloomberg Billionaires Index.
It’s a dramatic drop for the founder of PDD, who on Aug. 8 became the first tech tycoon to top China’s wealth rankings in more than three years, displacing bottled-water billionaire Zhong Shanshan. Zhong retook the No. 1 spot on Monday with a fortune of $50 billion.
PDD reported quarterly revenue that missed analyst estimates and warned that sales growth will slow. Chief Executive Officer Chen Lei repeatedly told analysts in a call after the earnings release that the firm’s current trajectory wasn’t sustainable, at a time when competitors such as ByteDance’s TikTok and Alibaba Group Holding Ltd. Are vying for budget-conscious shoppers. The company’s US-listed shares fell 29%, the most ever.
Management also dampened expectations for potential dividend payouts and share buybacks in the next few years.
“We are facing intense competition on different fronts and also uncertainties from external factors,” Chen said. “Therefore, our management team and I unanimously believe that it is not an appropriate time for share repurchases or dividends. And in the foreseeable years ahead, we also do not see such a need.”
Huang founded PDD in 2015 after launching a few gaming and e-commerce ventures. The former Google engineer quickly ascended the ranks of the world’s richest people, with his net worth peaking at $71.5 billion in early 2021. He stepped down as PDD’s chief executive in 2020 and left the board as chairman in 2021, as Beijing began cracking down on China’s tech giants.
The e-commerce platform is known for selling dirt-cheap products with massive promotions, which attracted budget-conscious consumers as global inflation surged. It expanded outside of China under the Temu brand name and quickly become one of the most downloaded US apps after a splashy debut in 2022. It’s since begun to challenge fellow Chinese online shopping giant Shein and even Amazon.com Inc. In certain segments.
But the company has faced frustration from suppliers, employees and governments. Hundreds of small merchants staged a rally at PDD offices in southern China this summer to protest what they called unfair penalties levied by the company. Meanwhile, the European Union is working on a proposal to close an import tax loophole for cheap goods bought online, while US lobbyists are pushing for a $10 threshold for duty-free shipments, down from $800 currently.