Pinduoduo’s founder and chairman is set to relinquish control of the company as it surpasses Alibaba to become China’s largest ecommerce marketplace.
Colin Huang, a former Google engineer, will step down from Pinduoduo’s board and relinquish his dominant voting rights, which gave him nearly complete control of the company.
It comes as Pinduoduo continued its pandemic-fuelled meteoric rise to prominence in China, seeing it overtake Alibaba in annual shopper numbers for the first-time last year, surpassing the previous market leader by around 10 million.
He will hand control to the current chief executive Lei Chen, who will be tasked with maintaining this staggering level of growth, seeing revenues over the December quarter skyrocket 146 per cent thanks to surging demand for online groceries from shoppers in less developed cities throughout China.
However, this will be no easy task as Pinduoduo is still heavily in the red, posting a loss of RMB1.4 billion (£160 million) over the same quarter.
“It is about the right time to explore what’s next if we want the same quality and pace of growth in 10 years. As the founder of this company, I am probably the most suitable person to take on this task by stepping out of the business and the comfort zone to embark on a journey of exploration,” Huanf said in a letter to shareholders.
The news sent Pinduoduo’s shares dropping nearly eight per cent in pre-market trading.
“The departure had an air of inevitability about it in light of Huang’s resignation as CEO last July,” Bernstein analyst Robin Zhu wrote in a research note.
“But the timing came as a surprise, and skeptics will note that the China internet sector is 0-for-1 when iconic founders leave the building.”