Colin Huang, the founder of Chinese e-commerce platform Pinduoduo has lost more wealth this year than anyone else in the world.
Mr Huang’s fortune has dropped by more than $27 billion, according to the Bloomberg Billionaires Index, after the company’s stock plunged as China cracked down on its big internet companies. That is the biggest decline among the 500 members of the index, much larger even than the approximately $16bn lost by China Evergrande Group chairman Hui Ka Yan, whose real estate empire is struggling under a pile of debt.
It is the starkest example yet of how the tide has turned for China’s billionaire class as President Xi Jinping calls for “common prosperity” and reins in the country’s private-sector companies. Shares of Pinduoduo, or PDD, have fallen more this year than either Alibaba Group or Tencent Holdings.
PDD is “more vulnerable to the crackdown compared to those peers with mature and profitable models” like Alibaba and Tencent, said Kenny Ng, a securities strategist at Everbright Sun Hung Kai in Hong Kong. “That’s the main reason for the stock performance lagging behind other tech companies.”
PDD did not respond to requests for comment.
Pinduoduo’s American depositary receipts have dropped 44 per cent this year, compared with a 33 per cent decline for Alibaba’s ADRs. Tencent’s shares have fallen 20 per cent this year in Hong Kong.
Mr Huang, who owns 28 per cent of PDD, founded the company in 2015 and quickly built it into an e-commerce giant by pioneering community buying. PDD’s annual active users climbed to 788 million in December, exceeding the 779 million users at Alibaba’s online marketplaces.
The company’s market value reached a peak of $178bn before falling to about $125bn. It reported its first quarterly net profit as a public company last month.
Mr Huang, who is now worth about $35bn, quit his role as chief executive last year and stepped down as chairman in March.
PDD is among the tech giants that have been pledging current and future corporate profits to invest in philanthropy projects in reaction to President Xi’s campaign to close China’s wealth gap. It said last month it would allocate $1.5bn in earnings to help the development of agriculture in the country. Before that, Mr Huang and PDD’s founding team gave $2.4bn in company shares to a charitable trust last year.
Of the 10 billionaires with the biggest net worth declines this year, six are from China, according to the Bloomberg index. They include Zhong Shanshan, the chairman of bottled water company Nongfu Spring, who has lost $18bn, Ka Yan of the besieged developer Evergrande, and Tencent’s Pony Ma, whose fortune has dropped by more than $10bn.
Jack Ma, the co-founder of Alibaba, has shed $6.9bn in wealth this year.