Founder of Chinese E-Commerce Giant PDD Holdings Sees Net Worth Plummet by $14 Billion in Market Rout
Colin Huang, the founder and former chairman of Chinese e-commerce firm PDD Holdings, experienced a significant drop in his net worth on Monday as the company’s stock plummeted nearly 30% following disappointing second-quarter revenues. Huang, who recently became the richest person in China, saw his estimated net worth fall by more than 28% to $35.3 billion, pushing him down Forbes’ real-time billionaires list.
The sharp decline in PDD’s stock price to $97.35 on Monday marks its lowest point of the year and has caused Huang to drop to No. 50 on the global billionaires list and No. 4 in China, behind Zhong Shanshan, Zhang Yiming, and Ma Huateng. PDD, the owner of popular online marketplace Temu, has seen its stock rise by almost 22% over the past year, but Monday’s plunge follows the company’s report of missed earnings and revenue estimates for the second quarter.
In the quarter ending June 30, PDD Holdings reported diluted earnings of 23.24 yuan ($3.20) per share and sales of 97.06 billion yuan ($13.64 billion), falling short of analysts’ expectations. Operating profit more than doubled from the same quarter last year, reaching $4.4 billion. Jun Liu, the vice president of finance at PDD, acknowledged that the company’s revenue growth rate has slowed due to intensified competition and external challenges, but CEO Lei Chen expressed a willingness to make short-term sacrifices to invest in the business.
The economic downturn in China has impacted other online marketplaces as well, with companies like Alibaba and JD.com reporting missed expectations in recent months. High unemployment rates and falling household incomes have led to a trend of “revenge saving” among young consumers, who are saving more in response to the weakening economy. Despite challenges in the market, Huang’s entrepreneurial ventures have been successful, with PDD Holdings experiencing significant growth since its founding in 2015.
Huang, who also founded Xinyoudi, an online games company, and e-commerce platform Ouku.com, has seen his net worth fluctuate over the years, reaching a peak of $55.3 billion in 2021. While Monday’s market rout may have impacted his standing on the billionaires list, his continued involvement as a major shareholder in PDD Holdings suggests a long-term commitment to the company and its growth potential. The future success of PDD and its online marketplace Temu will depend on its ability to navigate competitive pressures and external challenges in the rapidly evolving e-commerce landscape.
