Pinduoduo’s Chairman, New CEO Share U.S. Connections

Yesterday’s announcement that billionaire Colin Huang would step down as CEO of high-flying China e-commerce site Pinduoduo and make way for CTO Chen Lei was greeted with surprise. Its stock fell by 0.5% to $85.45 in Nasdaq trading. Under Huang’s leadership, Pinduoduo’s shares have quadrupled in the past year, turning the Shanghai denizen into China’s second-richest man with a fortune worth $43.2 billion in late June.

Though Chen isn’t as well known as Huang, the old and new CEOs have longstanding connections and blazed common trails. Huang, 40 and staying on as chairman, and Chen, also 40, both graduated from the University of Wisconsin at Madison. Huang holds a master’s degree in computer science and Chen holds a Ph.D. in computer science from the school that embraces “Bucky Badger” as its mascot.

Both worked in the U.S. at Google for a time – Huang an engineer and Chen as an intern. Huang, after his starting his first China startup Ouku – an online electronics products site, teamed up with Chen at his second, online game business Xinyoudi Studio, where Chen was CTO. Huang and Chen were both founders at Pinduoduo, where Chen been CTO since 2016, and Huang was both chairman and CEO until he gave up the CEO job yesterday.

Of the change in leadership, Huang said in a statement: “COVID-19 motivated us to think about a few things, including management transition. During the pandemic, we saw many young leaders in the company voluntarily taking up more responsibility. So the timing is ripe for the next generation to take the lead, and we feel more secure to hand over more responsibilities. The appointment of Chen Lei as the new CEO is part of our efforts to offer more opportunities and responsibilities to our team.”

For his part, Chen said: “Colin will spend more time on future drivers, while I will focus more on day-to-day operations, how to streamline and optimize internal processes, and how to make these operational decisions more efficient. Going forward, as our core businesses are on the right track, we will keep doing what we are good at – offering value-for-money products through an interactive and fun experience. I will focus more on growing our young business units, for example our logistics e-waybill system.”

Chen will have big shoes to fill. Though its business and valuation have exploded under Huang, it’s up against formidable rivals in Alibaba and JD.com. What’s more, Pinduoduo has been posting large losses even as it revenue grows.

Yet if Chen keeps the ship running while ambitious Huang – described in his official bio as a “serial entrepreneur” — can build those “future drivers,” these two badger geeks may yet write another chapter in Pinduoduo’s remarkable growth story.

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@rflannerychina