2021 Letter to Shareholders

2021 Letter to Shareholders

Colin Huang
Colin Huang
Founder, Pinduoduo
March 17, 2021

This year’s shareholder letter comes slightly earlier than usual so that we can keep everyone updated on some new developments. At our Board meeting earlier today, the Board approved my resignation as the Chairman of the Board. Lei will takeover as Chairman with immediate effect while continuing in his existing role as CEO. As I step down from the Board and relinquish my executive responsibilities at Pinduoduo, the 1:10 super voting rights attached to my shares will be removed. I will further entrust the voting rights of these shares to the Board, which has been guiding Pinduoduo in the past 3 years. At the same time, I pledge these shares to another three years of lock-up; they will not be sold. 

I stepped down from the CEO position on July 1st last year, with the plan to fully transition the Chairman role to Lei one year from then. Two factors have prompted us to accelerate this transition.

First, the intensifying, and to a certain extent, distorted competition in some area has made me realize that the traditional approach of competing through scale and efficiency has its inevitable limitations. To change this, we must take action on deeper and more fundamental issues and seek answers from core technologies and the fundamental theories that underpin them. Although Pinduoduo is still a young company with a long runway for growth, it is about the right time to explore what’s next if we want the same quality and pace of growth in 10 years. As the founder of this company, I am probably the most suitable person to take on this task by stepping out of the business and the comfort zone to embark on a journey of exploration. It would be all the better if the journey is also aligned with my personal interests.

Second, the pandemic has caused dramatic changes externally, which accelerated the evolution of our operations and management team internally. Pinduoduo has transformed from a pure asset-light third-party model to becoming more asset-heavy, with new investments in warehouses, agriculture-focused logistics, and upstream sources of agriculture products. New businesses have sprouted and grown rapidly internally. Not only have these new developments stimulated Pinduoduo, they have also birthed and groomed a new generation of leaders and managers. It is time to let them shape the Pinduoduo they aspire to build.


So, what will Pinduoduo become in the future? I cannot say for sure, but I am happy to share my thoughts.  

First, Pinduoduo will always be a company that puts the interests of its consumers and societal value first. The  philosophy of “Benefit All”, “People First”, and “More Open” that we have practiced will be more distinctly acknowledged by the industry and the public. Pinduoduo, being a platform that serves the masses, will make every possible improvement – significant or invisible – prudently bit by bit and strive to create value for consumers and society. And because of this, it will increasingly be embraced by the public. The various obstacles it faces will slowly be broken and overcome, even if the journey may require sometime and may be bumpy. Nonetheless, “Benefit All”, “People First”, and “More Open” should be the direction, as they will bring new life and hope in this new era.

Next, Pinduoduo will be an imaginative and constantly innovating company. Our vision of “Costco+Disney” will be more distinctly and vividly presented to our users. Even though we are still at the very early stage of “More savings, More fun”, we have already sensed the subtle differences sparked by the multiplier effect of compounding “More savings” with “More fun” and felt the tremendous force behind this chemical reaction that makes 1+1>2. Our execution and experiences of “More savings, More fun” over the past few years have led us to believe that this vision is rewarding, fun, hopeful and worth pursuing.


Finally, Pinduoduo will endeavor to become a mature and global public organization. In our 2018 Shareholder Letter at the time of IPO, we said that, “We envision Pinduoduo to be an organization that reports to the public. It should create value for the public, rather than being a show-off trophy for a few or carrying too much personal color. We want it to be an independent organization that brings value to the society with its unique organizational structure and corporate culture. Most importantly, it should continue to strive to better itself.” At that time, Pinduoduo was still a child just starting elementary school. Even though it has only been three years since then, Pinduoduo has become a youth entering adolescence. Observing its rapid transformation and growth, I am both joyful and anxious. Pinduoduo will have its own growth journey regardless of whether I am nervous, excited, or frightened as its guardian. I hope that my stepping down as the Chairman of the Board will aid this young person into independent adulthood.


What will I be doing after stepping down? I want to work on research in the fields of food sciences and life sciences. Pinduoduo has its roots in agriculture. In the past years, Pinduoduo’s contribution in agriculture has been mainly in downstream distribution and improving midstream supply chain efficiency. We have created greater income for farmers and savings for consumers by streamlining the supply chain and matching supply and demand more efficiently. However, improved efficiency in distribution and sales still does not fundamentally add value to agricultural products, nor inherently improve our health significantly. What can we do if we were to take a step further and go beyond efficiency improvements?


For example, through managing the farming process, can we implement reliable and effective control of harmful heavy metal content in potatoes, sweet potatoes, tomatoes, etc, while improving their micronutrient content in a managed and standardized manner? If the tomato could be cultivated such that every single fruit is packed with the optimal amount of Vitamin C and other micronutrients our bodies need, would our quality of life be much improved?


Or, if we could better comprehend how our bodies would react to and be affected by the different plant and animal proteins we consume, and then incorporate these insights into the synthetic production of alternative meats, could we create a next generation of meat that is simultaneously healthier, greener, and more sustainably supplied?


Taking one step further, if we further research into the protein structures and their traits in the human body, could we build on the work of the 2016 Nobel Prize in Chemistry Laureates on molecular machines to produce protein-based molecular motor that can travel through the blood vessels in the brain and unclog them to prevent strokes?


When we are young, our teachers always ask us what we aspire to become when we grow up. Like many others, I declared that I wanted to be a scientist.  Alas, in the blink of an eye, I am already in my forties.  It is probably unlikely for me to become a true scientist. But if I work hard and combine the chemistry that I loved in high school, the computer science that I learnt in university, and the operation experiences I acquired at work, maybe I can still make something meaningful happen. Though I can no longer become a true scientist myself, I would feel very lucky and blessed if I have the chance to become a research assistant to a future, possibly great, scientist. 

Colin Zheng Huang
Mar 17, 2021

P.S. I attach the letter from our IPO. It is still the beginning, and our principles stay the same.


2018 Letter to Shareholders
(Reprinted from the IPO Prospectus)

Pinduoduo is not a conventional company. We founded Pinduoduo when the China market accepted the status quo of the existing e-commerce landscape and thought its formative phase had come to an end. Within three years, Pinduoduo has attracted over 300 million active buyers and over 1 million merchants through a new shopping format and experience. This exponential growth shows unlimited potential of our platform. As our three-year-old platform is still burgeoning, we know we face many obvious challenges and uncertainties ahead. Hence, why are we bringing Pinduoduo into the ebbs and flows of the capital markets so soon? We'd appreciate you hearing our thoughts in this letter.

  • We think the e-commerce business is closely tied with social impacts and responsibilities, and therefore its growth and value should be shared with the public;
  • We believe in the tremendous potential of our platform; therefore, if we take a long-term view, there is no difference for our listing in three years, five years or longer. On the contrary, with public scrutiny and regulatory supervision, we may grow better and stronger; and
  • We envision Pinduoduo to be an organization that reports to the public. It should create value for the public, rather than being a show-off trophy for a few or carrying too much personal color. We want it to be an independent organization that brings value to the society with its unique organizational structure and corporate culture. Most importantly, it should continue to strive to better itself.

Now as the founder, I would like to give you more color on my observation and vision for Pinduoduo so as to give you a more concrete understanding of the company you are investing into.

What does Pinduoduo do?

  • Pinduoduo dedicates itself to creating a commingled "space" between cyberspace and physical space, where users can find the most value-for-money merchandise that meet their different needs and derive happiness;
  • Pinduoduo leverages a platform and an ecosystem comprised of hundreds of millions of users, merchants, platform management personnel/operators and platform infrastructure/service providers; while each player is interdependent with one another, all of them evolve and improve as they constantly try to balance cost-effectiveness, efficiency, user experience and satisfaction;
  • Pinduoduo's survival depends on the value it creates for its users; I hope our team wakes up feeling anxious every day, never because of share price volatilities, but because of their constant fear of users departing if we are unable to anticipate and meet users' changing needs; and
  • Pinduoduo is dedicated to investing in the future and will always focus on the long term. It might appear too aggressive or too conservative at times. However, it always follows the basic and simple principle—growing its long term intrinsic value.

Company Value

Pinduoduo's core value is "本分" (Ben Fen). It is difficult to express it perfectly in English, but it essentially means to adhere firmly to one's own duties and principles. There are several layers of meaning here:

  • Be honest and trustworthy;
  • Discharge our own duties and responsibilities regardless of others' conduct; ;
  • Insulate our minds from outside pressures so that we can focus on the very simple basics of what we should be doing;
  • Never take advantage of others even when we are in a position to do so;
  • Self-reflect and take responsibilities when problems arise instead of blaming others.


Specifically for Pinduoduo, the management's 本分 (Ben Fen) is to relentlessly focus on value creation for our consumers. We may not always be understood, but we always do things out of goodwill and do no evil.

Going forward

In the past three years, Pinduoduo has established and promoted a new e-commerce concept and experience of "team purchase" (or "拼", "pin"). We can reasonably expect that it would evolve into a variety of "pin" formats. We also hope that other innovative formats for different user scenarios will be created just like how we have created "pin" today.

If you close your eyes and visualize the next stage for Pinduoduo, it would be an exemplification of a multi-dimensional space, seamlessly integrating cyberspace and the physical space. It would be a combination of "Costco" and "Disneyland" (value-for-money and entertainment combined), driven by a distributed network of intelligence agents (versus the popular super-brain-like centralized AI system). It not only matches information efficiently, but also constantly puts the social interactions of the universe into consideration to make the entire experience more enjoyable.

As part of the process to constantly meet users' needs, we are highly aligned to be the driving force to improve the efficiency and quality of the supply chain. One good example would be the agricultural industry. China has relatively less arable land per capita given its population and landscape. This is different from countries like the United States, where large-scale farms are prevalent, and the production and transportation of agricultural products could be highly industrialized. We find "pin" an effective solution to aggregate consumer demand, match them with batches of agricultural produce, and mobilize China's well-penetrated and affordable logistics capability to have perishable and fresh produce shipped directly from farms to users and bypass multiple layers of distribution. This not only enhances user experience, but more importantly, helps to turn small scale agriculture production of different quality, variety, and volume into a semi-customized batch processing mechanism. It lowers the unnecessary costs of agricultural consumption and potentially makes small scale customized services viable. The social impact and value to our society would far exceed our business success or the perceived valuation of the company. We are excited by the small impact we see today and think this would be a trend even beyond agriculture.

Appreciation for our investors

We are grateful to those who are willing to invest in Pinduoduo after reading through the utopian ideas above. It is not easy to take the leap of faith believing in such an unconventional company, which strives to meet both economic and social needs of users, and to make a positive impact to the society. The pursuit and focus of our long-term vision and intrinsic value may not always translate into near-term profits. Instead, we hope to show you the true colors of our company no matter how bumpy or rough the numbers may seem to be. We ask you to ride the journey with us for the long term. We believe it will be wonderful.

So, what should you expect from Pinduoduo as an investor?

First of all, you can reasonably believe that we are far from the best we could achieve. In fact, we are probably at our most rudimentary level of services now if we look forward in 10 years' time. Yet, many of our users have chosen to believe in us. We are encouraged and have every reason to believe that as we work hard day after day to improve our services, more and more users will stick with us, believe in us.

Secondly, you should expect a team with passion that is trustworthy and always focuses on serving users and our company's intrinsic value. We have the courage and the ability to invest in long-term opportunities.

Pinduoduo, as a growing organization, will always dedicate itself to do the right things, to create value for our society, and to make this world a better and happier place.

Colin Zheng Huang
On behalf of Pinduoduo
June 2018

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