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before pinduoduo released its 2024 interim report, nongfu spring's zhong shanshan had been on the list of "the world's most miserable rich people". after pinduoduo released its interim report, the 30% drop in its stock price caused huang zheng's wealth to shrink rapidly. currently, zhong shanshan and huang zheng rank first and second on the list of the world's richest people with the most shrinking wealth, with a gap of only us$400 million.

text｜han xiang

the two introverted, low-key and practical entrepreneurs did not expect to "compete" on this kind of list.

on the global real-time rich list, nongfu spring founder zhong shanshan and pinduoduo founder huang zheng have become the two worst-off billionaires so far in 2024. real-time data shows that since 2024, zhong shanshan's net worth has shrunk by us$18.2 billion (about rmb 129.8 billion), and huang zheng's net worth has shrunk by us$17.8 billion (about rmb 127 billion), with a difference of only us$400 million between the two.

huang zheng's wealth shrank overnight. pinduoduo's us stock price plummeted by more than 30% on august 26, and huang zheng's wealth shrank by $14 billion that day.

before this day, he was still the richest man in china. huang zheng replaced zhong shanshan of nongfu spring on august 8, 2024, becoming the first technology tycoon to top the rich list in more than three years, but he only sat in this position for 18 days.

after the big drop, huang zheng's net worth has fallen back to $33.8 billion, ranking 48th in the world. from the perspective of china's richest people ranking, he has retreated to fourth place, behind zhong shanshan, bytedance founder zhang yiming, and tencent group founder ma huateng, and is $300 million ahead of fifth-placed jack ma.

unlike huang zheng's sharp decline, zhong shanshan's wealth has been shrinking since 2024. especially after the death of wahaha founder zong qinghou on february 25, 2024, zhong shanshan, who had had interactions and confrontations with him in the market, gradually fell into the whirlpool of public opinion of "cyber violence". it is reported that the daily sales of nongfu spring's official flagship store have fallen by more than 90% since february 28.

subsequently, nongfu spring launched a cheaper green bottle of pure water in may. in july, nongfu spring was involved in a public opinion storm with the hong kong consumer protection committee. nongfu spring was very busy throughout the first half of the year, but the report card handed in recently was shocking. the revenue of its mainstay packaged water business fell by 18% year-on-year in the first half of the year. the performance was directly reflected in the capital market. nongfu spring's stock price fell by 10% in a single day, creating a historical low since its listing in 2020.

since 2024, the share price of nongfu spring has fallen by nearly 40%. the two low-key and pragmatic entrepreneurs did not expect to be compared in "misery" today. so much so that social media spread that "the two richest men took turns to dump the market, neither of them wanted to be the richest man. after a round of dumping, they found that they were still the richest, but their wealth had shrunk a lot. this is involution". jokes aside, these two companies in the free shipping area have their own troubles.

pinduoduo is incomprehensible

although it is an e-commerce platform, many investors and industry insiders say they don’t understand pinduoduo. duan yongping, a well-known investor and “chinese warren buffett”, said on social media, “i still don’t understand pinduoduo’s business model very well, and i can’t see what it will be like in 10 years, but i am still impressed by their strong profitability.”

there are many articles reporting on pinduoduo, but "digital intelligence research society" found that only this paragraph clearly explains pinduoduo's logic. "the reason why pinduoduo rose to prominence is that it built a high-frequency consumer goods exchange with limited supply around people early on, which collected transaction taxes and avoided homogeneous competition with giants.

as my country's consumer goods market has entered the toc era where consumers have the final say, from the tob marketing-driven era, the giants that originally pursued gmv and territory have begun to face up to their own innovator's dilemma and have returned to users and low prices. "

guided by this core logic, pinduoduo's market value has increased from one-tenth of alibaba's four years ago to surpassing alibaba and becoming china's largest e-commerce platform. this watershed is the third quarter report released by pinduoduo in 2023. in four years, pinduoduo has surpassed alibaba and promoted the arrival of a new watershed in the global e-commerce and retail industry with practical actions.

in the 2024 interim report, pinduoduo once again demonstrated with its actions what a real "cut" means. in fact, from the perspective of the interim report itself, pinduoduo is still very good. especially compared with alibaba and jd.com, it is still very eye-catching. in the second quarter, pinduoduo's revenue was 97.06 billion yuan, a year-on-year increase of 86%; net profit attributable to the parent was 32.01 billion yuan, a year-on-year increase of 144%. during the same period, the revenue growth rates of jd.com and alibaba slowed down to 4% and 1.2% respectively. jd.com's net profit attributable to the parent increased by 69% year-on-year, and alibaba's net profit decreased by 27% year-on-year.

the bomb that triggered the stock price plunge was dropped by pinduoduo's executive director and co-ceo zhao jiazhen at the earnings conference. zhao jiazhen said that pinduoduo's future revenue growth will slow down, profits will gradually decline, and pinduoduo will not consider dividends or repurchases in the foreseeable future.

as for the reasons for the slowdown in revenue, zhao jiazhen said that pinduoduo's current business is facing fierce competition and the impact of external environmental factors. in the short term, profits cannot be ruled out to fluctuate, but the general trend of gradually declining profits is inevitable.

as soon as this statement came out, the capital market directly hit pinduoduo investors with a blow. this is why huang zheng "abdicated" after 18 days of being the richest man in china.

the water business is not doing well.

before the "cyberbullying" incident, zhong shanshan had been china's richest man for four consecutive years. although his holding company includes nongfu spring and another biotech company called wantai biological, the bulk of his wealth is basically in the nongfu spring water business.

in an interview with cctv, zhong shanshan also said frankly, "i am selling water. i am more watery, because if i am not watery, then this water is not water."

before the "cyberbullying" public opinion storm, zhong shanshan's selling nongfu spring was still a good business. according to the 2023 china packaged drinking water report released by zhushi consulting, nongfu spring, yibibao, wahaha and master kong will have market shares of 23.6%, 18.4%, 5.6% and 4.9% respectively in 2023.

judging from the data, nongfu spring's top position is still stable for the time being. in addition, there are high requirements for extracting natural drinking water in my country. for example, it usually takes several years to obtain the extraction qualification, and then you have to bid for the annual water extraction license from the ministry of finance, and 4% of the annual revenue must be paid to the state as compensation for water resource utilization.

as the country pays more and more attention to environmental protection, the entry threshold for water resource exploitation is getting higher and higher. several players in the drinking water market already have natural barriers, and competition seems to be possible only among the above-mentioned companies.

but the death of zong qinghou changed the fate of nongfu spring. zhong shanshan was "cyberbullied", and nongfu spring's stock price plummeted. the decline has been close to 40% since 2024. the iron throne of the richest man, which had been firmly in place for four years, also changed hands briefly.

the death of zong qinghou has dragged zhong shanshan into a "cyberbullying" public opinion storm, but china resources everbright's ipo, wahaha's fierce terminal distribution blitz, and the hong kong consumer council's questioning of nongfu spring all indicate that the "selling water" business is not as easy as before.

when luck comes, heaven and earth are on your side; when luck is gone, heroes are helpless. as powerful as pinduoduo and nongfu spring are, they will have their moments of glory, but they will also have their lows and setbacks.