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

On August 9, the Bloomberg Billionaires Index showed that Huang Zheng, the 44-year-old founder of Pinduoduo, surpassed the "King of Bottled Water" Zhong Shanshan with a net worth of US$48.6 billion to become China's richest man.

Huang Zheng is also the first tech company founder to top the Chinese wealth list in the past three years. Huang Zheng founded Pinduoduo in 2015, and the e-commerce giant has grown rapidly since then. Huang Zheng resigned as CEO in 2020 and chairman in 2021. Huang Zheng's personal net worth peaked in early 2021, when his net worth reached $71.5 billion.

Huang Zheng becomes China's richest man

On the afternoon of August 9, the Bloomberg Billionaires Index showed that Pinduoduo founder Huang Zheng has topped the list of China's richest man. With a net worth of US$48.6 billion, he replaced Nongfu Spring founder Zhong Shanshan, who had topped the list since April 2021, and became China's richest man.

Huang Zheng currently ranks 25th in the global rankings, followed by Zhong Shanshan, who ranks 26th in the world with a net worth of $47.4 billion. In addition, Tencent founder Ma Huateng and ByteDance founder Zhang Yiming ranked 32nd and 33rd in the world, respectively, with net worths of $42.4 billion and $42.2 billion.

Huang Zheng was born in Hangzhou, Zhejiang in 1980. He graduated from Hangzhou Foreign Languages ​​School in 1998 and was admitted to Zhejiang University's Chu Kezhen College, majoring in computer science. In 2002, after graduating from college, Huang Zheng successfully applied to the University of Wisconsin-Madison. In 2004, after obtaining a master's degree in computer science, Huang Zheng chose to join the then rising Google. In 2006, Huang Zheng and Kai-Fu Lee were sent to China to expand business and establish the Google China office. In 2007, Huang Zheng resigned from Google and started his own business, and successively founded mobile e-commerce, e-commerce agency operations and game companies.

In 2014, Huang Zheng rested at home for 9 months due to illness. During his recovery, he found that there was huge room for development in the field of mobile social networking: people spend 40% of their mobile phone usage time on mobile social apps every day, but the e-commerce sales achieved are less than 1% of the total e-commerce sales. Following the new idea of ​​social + e-commerce, Pinduoduo's predecessor "Pinhaohuo" came into being. In April 2015, Pinhaohuo went online, creating a new model of social e-commerce. In September of the same year, Xunmeng Games incubated "Pinduoduo" internally and merged it with "Pinhaohuo". Huang Zheng served as the chairman of the new company.

Pinduoduo has grown rapidly since its founding in 2015, luring consumers with deep discounts and a wide variety of products, sometimes offering shockingly low prices in a crowded field. In a few years, Pinduoduo has become one of China's most successful e-commerce empires, rivaling Jack Ma's Alibaba.

In March 2018, Pinduoduo completed its latest round of pre-IPO financing of US$3 billion with a valuation of US$15 billion, with Tencent becoming the lead 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 his successor was Chen Lei.

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

At the beginning of 2021, Huang Zheng's personal net worth peaked at US$71.5 billion (currently about RMB 513.2 billion). On March 17, 2021, Huang Zheng announced his resignation as chairman in his 2021 letter to shareholders, and was succeeded by current CEO Chen Lei. Huang Zheng said that after resigning as chairman, he would devote more efforts to research in the fields of food science and life sciences in combination with his personal lifelong interests. Even if you can't become a scientist, you may have the opportunity to become an assistant to a great scientist, which is also a very happy thing.

Pinduoduo's performance soared

Since stepping down as Pinduoduo's CEO in 2020 and resigning from the board of directors in 2021, Huang Zheng has largely kept a low profile.

However, in the field of e-commerce, Pinduoduo is in the limelight. In mid-May this year, Pinduoduo released a financial report showing that in the first quarter of 2024, Pinduoduo achieved revenue of 86.8 billion yuan, a year-on-year increase of 131%, mainly benefiting from the recovery of GDP growth to more than 5% in the first quarter, seasonal factors such as Spring Festival consumption, and favorable policies such as old-for-new exchange; Non-GAAP adjusted net profit increased by 202.2% year-on-year to 30.602 billion yuan, significantly exceeding market expectations; Non-GAAP net profit margin was 35.3%, mainly due to effective control of rates and improvement of operating efficiency.

Tianfeng Securities pointed out that Pinduoduo's low-price mentality is solid, and the commodity supply chain continues to improve, which is expected to drive users to increase their shopping frequency, and the overall main site GMV growth rate may exceed the industry average; at the same time, with the increase in the penetration rate of merchants promoted throughout the site and the steady increase in the proportion of 10 billion subsidies, it is expected to drive the overall monetization rate. The company adheres to the strategy of high-quality development, which is mainly reflected in: 1) high-quality consumption, continuously strengthening the ability of "more benefits + good services"; 2) high-quality supply, deepening the manufacturing and agricultural industrial belts, and optimizing supply chain efficiency; 3) high-quality ecology, establishing a 10 billion ecological special project, tilting platform resources to high-quality merchants and commodities, vigorously supporting high-quality merchants, small and medium-sized enterprises and farmers, and improving platform governance capabilities. As the company's supply chain and operational capabilities continue to strengthen, the platform ecology construction is becoming more and more perfect, and the per capita GMV may increase, the company is still expected to gain market share.

First Shanghai said that the current Pinduoduo main site maintains the leading level in the industry. Due to the large number of players and homogeneous competition, this year is still a challenging year for domestic e-commerce. Merchants' advertising expenditures depend on the delivery efficiency of e-commerce platforms, and Pinduoduo still has certain advantages over its peers. As the competition landscape of grocery shopping business gradually eases, Duoduo grocery shopping is driven by both customer unit price and profit in the first quarter. Raise Pinduoduo's target price to US$211.80 and maintain a buy rating.

Recently, some media reported that Douyin e-commerce has recently adjusted the priority of its business objectives, no longer putting "price power" first, and will focus on pursuing GMV growth in the second half of the year. Previously, Alibaba also brought forward the GMV assessment and weakened the five-star price power. Zheshang Securities believes that Alibaba and Douyin have successively raised the priority of GMV assessment and reduced the assessment intensity of "price power", which will help ease the price competition of domestic e-commerce and overall benefit Pinduoduo's domestic e-commerce competition environment. Zheshang Securities said that with the improvement of domestic e-commerce competition and the rapid development of Temu (Pinduoduo's "overseas version"), Pinduoduo has a low valuation and high growth, and maintains a buy rating.

In addition, on August 5, the Fortune Global 500 list was released. The total operating income of the companies on this year's Fortune Global 500 list is about 41 trillion US dollars, equivalent to one-third of the global GDP, a slight increase of about 0.1% over last year. The top Chinese technology companies include Hon Hai Precision, JD.com, China Mobile, Alibaba, Huawei, etc. The overall ranking of large companies in the Internet field has risen. Among the five Chinese Internet giants, JD.com, Tencent and Meituan have all improved their rankings, and Pinduoduo has made the list for the first time. (Securities Times)