(Reuters) – Pinduoduo Inc’s founder Colin Huang Zheng stepped down as chairman on Wednesday, even as the firm overtook rival Alibaba to become China’s largest e-commerce platform by users.
The Shanghai-based company reported 788.4 million annual active buyers for the 12 months to the end of 2020, overtaking rival Alibaba Group to become China’s largest e-commerce platform by users. Alibaba recorded 779 million annual active buyers during the same period.
But shares in U.S.-listed Pinduoduo fell 8% on Wednesday, after founder Colin Huang Zheng told shareholders he would step down as chairman.
The 41-year-old Huang, who owns about 30% of Pinduoduo, will also give up his super voting rights.
Current chief executive Chen Lei succeeded Huang as chairman. “We are proud that we have become the world’s largest e-commerce platform by user number,” Chen said on a call with analysts on Wednesday.
Lu Zhenwang, an independent e-commerce expert and chief executive officer of Shanghai-based Wanqing Consultancy, said the resignation of Huang triggered the fall.
“It’s a natual reaction though I think the investors over-reacted.” Lu said.
“After nearly six years of super-fast growth, the strategy of Pinduoduo won’t be significantly changed whoever the Chairman is,” he added.
Managing director of Haitong International Natalie Wu called Huang’s stepping down a vote of confidence showing Pinduoduo can go from strength to strengh without him.
“We do not think this could pose as a significant change to company’s operation,” Wu said.
Pinduoduo reported a 146% surge to 26.55 billion yuan ($4.08 billion) in the fourth quarter ended Dec. 31, topping analysts’ estimates of 19.22 billion yuan, according to IBES data from Refinitiv.
Pinduoduo reported marketing expenses increased 59% year on year to 14.7 billion yuan due to advertising and marketing costs.
The company is investing in agriculture and launched Duo Duo Grocery, a next-day grocery pickup service in August last year.
A research report by China Renaissance said Duo Duo Grocery will benefit Pinduoduo’s total gross merchandise value (GMV)growth over the long term.
Last year, Pinduoduo doubled its agriculture-related GMV to 270 billion yuan ($41.51 billion) from the year before.
($1 = 6.5041 Chinese yuan renminbi)
(Reporting by Eva Mathews in Bengaluru and Sophie Yu in Beijing; Editing by Amy Caren Daniel and Louise Heavens)