The founder of PDD Holdings, of which fast fashion e-commerce platforms Temu and Pinduoduo form part, has increased his wealth by nearly $14 billion in a single year. Colin Huang stepped down as CEO in 2020, five years after being at the helm of the fastest-growing cheap e-commerce platform.
The reason: Global inflation, economic crunch, and tight budgets drove consumers to cheap deals and discount e-commerce items on Temu and Pinduoduo.
According to the Hurun Rich List, Huang is now ranked third-richest man in China. His fortune has reached $37.2 billion.
Temu’s online popularity has been surging since its launch in September 2022.
Earlier this year, Temu was dragged to court by a similar e-commerce platform, Shein, accusing it of working with influencers to belittle Shein on social media.
What this means for e-commerce
Reuters is reporting that the billionaire’s fortune’s growth reflects how the e-commerce landscape is changing. This is not only in China and abroad. Consumer confidence remains low, even years after the COVID-19 pandemic.
ALSO READ: Top online shopping sites, Shein and Temu, at loggerheads
Hurun Report chairman Rupert Hoogewerf says, “Going global has been one of the key sources of growth this year.” Temu’s sales were more than double than Shein’s last month.
Wealth built on poverty?
Oxfam International found that a new billionaire was made every 30 hours during the pandemic. And just a year later, millions fell into extreme poverty at the same rate.
The report, Profiting from Pain, questioned how billionaires built their empires during the pandemic. “Decades of progress on extreme poverty are now in reverse, and millions of people are facing impossible rises in the cost of simply staying alive,” says Gabriela Bucher, an executive director at Oxfam International.
Business lessons
Locate2u CEO Steve Orenstein says what contributed to Temu’s rise to the e-commerce throne is its location. The fact that it’s based in China, where the country has a large economy and a vast population, is a winning combo.
“They’re selling inexpensive products. It’s really good in these economic times that people are looking for cheaper products. They are looking for bargains; they’re looking for ways to save money. Temu is in a great position to do well, particularly in that Chinese market,” says Orenstein.
Temu’s competitive advantage is that they “nailed delivery” in a challenging economic climate. “It’s fast in the areas they’re delivering into high-density places. They can get that product to their customers quickly,” says Orenstein.
There is also much to say about the online ordering experience that e-commerce businesses can learn from. “It is probably better in China than what it is in some of the Western countries. I think they’re doing a great job, providing a great experience for their customers,” notes Orenstein.
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Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
