Temu Founder Colin Huang Is Now China’s Richest Man

Colin Huang, founder of Temu and the richest man in China today. Photo courtesy of Cheung Kong Graduate School of Business

Colin Huang, founder of Temu and Pinduoduo, is now China’s richest man, dethroning Alibaba’s Jack Ma as the king of e-commerce.

According to Bloomberg, Huang has surpassed bottled water and beverage tycoon Zhong Shanshan, owner of Nongfu Spring, as China’s richest billionaire with a net worth of $48.6 billion.

Colin Huang’s PDD Holdings Group, the parent company of low-cost goods platform Pinduoduo, has been in business since 2015.

Pinduoduo and its international commerce platform Temu have ended Jack Ma’s Alibaba’s dominance in global e-commerce.

Temu, a separate app from the group aimed at international trade, has enjoyed great success but has been criticised for its business practices in several countries, including France.

Colin Huang, 44, has an estimated fortune of $48.6 billion, according to Bloomberg.

The e-commerce tycoon was born in 1980 in Hangzhou, a city in eastern China. He showed an affinity for mathematics early on, and by his teens he had become a numbers whiz. His skills landed him an engineering position at Google in 2006, and he returned to China in 2007 to develop Google’s services in the country.

After leaving Google, the Chinese entrepreneur founded a series of online businesses, including e-commerce platform Oku, online gaming company Xinyoudi and Pinduoduo, a platform that sells traditional agricultural products at low prices.

Founded in 2015, Pinduoduo has quickly become one of China’s most successful e-commerce empires. Its strategy was (and still is) to lure consumers with huge discounts and a wide range of products, sometimes offering incredibly low prices in a highly competitive sector in China.

Temu’s business model relies on Chinese suppliers shipping directly to customers around the world, without any middlemen. China’s relatively low manufacturing costs, compared to most Western countries, allow Temu to maintain its margins. The company also invests heavily in social media marketing.

The platform’s product list quickly expanded, and Huang launched Temu’s overseas branch. Temu was launched in the United States in 2022. There, its low-cost product lineup made it instantly popular, gaining a loyal consumer base.

Inflation contributes to Temu’s surge

Temu appeared in the United States and Europe in 2022. It was at a time of energy crisis as the world recovered from the COVID-19 outbreak, the war against Ukraine raged, and the effects of the climate crisis became increasingly evident.

All this contributed to persistent inflation around the world, and a small percentage of the population found themselves plunged into poverty, while most went bargain hunting.

In business terms, Temu appeared in the right place at the right time. Its great success was mainly due to cost-conscious consumers, who needed to find products at very low prices to save money in order to pay for their essential needs such as food, mortgage, petrol and bills.

Temu was introduced to Europe in 2023. Despite being in the European market for such a short time, Colin Huang’s company claims to have an average of around 75 million monthly active users in the region.

However, according to Euronews, its huge success has sparked accusations of unfair business practices, lax safety standards and failure to adhere to proper customer service practices.

This year, consumer groups in Europe alleged that Temu manipulated consumers into spending more money and impaired their ability to make “free and informed decisions.” South Korea similarly investigated Temu for suspected false advertising and unfair practices.

In China, hundreds of traders protested in the southern city of Guangzhou, denouncing unfair treatment in the sale of their products on the platform.

Temu vs Alibaba

While Temu has eclipsed China’s other e-commerce giant, Alibaba, the latter is struggling to regain its place and luster in the global market.

Jack Ma, Alibaba’s billionaire co-founder, has been out of the limelight in recent years. However, since March 2023, the company has been working to regain not only its market share, but also its international prestige.

Still, management changes and new strategies haven’t brought Alibaba anywhere near Temu’s notoriety. Two-thirds of Alibaba’s customers are in China, while Temu, led by Colin Huang, has become a household name in the United States, where Alibaba remains relatively unknown.

Additionally, Alibaba’s platform is not very user-friendly, as the consumer is confused by the sheer number of sellers offering the same product, and product images and descriptions are often of poor quality.

But more importantly, Temu spends an incredible amount of money on marketing. The e-commerce platform is estimated to spend $3 billion on marketing in 2023.

As things stand, it remains to be seen whether Temu’s marketing strategy, consumer awareness, and sales will help it stay at the top of China’s international e-commerce platforms.