YouTube/Bloomberg
Pinduoduo CEO Colin Huang.
In just three and half years, Chinese e-commerce platform Pinduoduo grew from a burgeoning direct-to-consumer delivery service into a multibillion-dollar company with a successful IPO under its belt. When the Shanghai-based startup went public in late July, its stock soared to nearly $27 a share - 41% higher than the company originally anticipated - making Pinduoduo worth nearly $24 billion.
Its remarkable growth is the result of a confluence of factors, says Ron Cao, partner of Shanghai-based venture firm Sky9 Capital. Cao has helped oversee much of Pinduoduo's growth since his firm led the e-commerce platform's Series B funding round in 2015.
Transform talent with learning that worksCapability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More At the time of Sky9's investment, Cao said Pinduoduo was a fast growing e-commerce platform primarily focused on selling affordable, perishable fruits.
But with a fresh cash injection of $110 million from a number of investors including Lightspeed, Sequoia, and Tencent, Pinduoduo rapidly expanded its purview: Now, the site sells nearly every product imaginable (breast enhancement cream, smartphones, mangoes, toilet paper, and men's loafers to name only a few) along with fashion goods, sports items, books, and electronics.
Pinduoduo's CEO, former Google engineer Colin Huang, has described his company as "a combination of Disneyland and Costco" that sells low-cost products to shoppers through bulk suppliers. Once a group of people opt in to buy an item, the platform ships it out directly from the supplier at a competitive price.
In an interview with Business Insider, Cao broke down how Pinduoduo became such an instant success: