Economy, Talking Point

A tale of two CEOs

The founders of Ping An and Pinduoduo are both stepping down


Aping the Alibaba model? Colin Huang showcases Pinduoduo’s leadership team

Many of the rags-to-riches stories of China’s tycoons make for inspirational reading. Often just as interesting are the accounts of how some of the most astute entrepreneurs failed to stay at the top or even opted to step away from the summit.

On July 1, two CEOs resigned on the same day from positions at nationally-prominent firms. What do their exits tell us about the succession planning at some of China’s fastest-growing companies?

Case one: “the highest paid CEO”

The first resignation came at Ping An, when the Chinese insurer announced last Wednesday that its board of directors had agreed to co-founder Ma Mingzhe’s “personal request” to resign as company CEO.

The 65 year-old will stay on as chairman, focusing on strategy, staff talent and corporate culture, Ping An said. Ma will also head a newly formed “core management team” that comprises Ping An’s three co-CEOs.

Analysts had been expecting Ma to step down from the chief executive role since Ping An appointed the three additional CEOs in December 2018. The model looks similar to that of Huawei, another Shenzhen-based giant, which has a rotating chairmanship.

Ma is relinquishing a role that he has held for more than three decades. His longevity and influence often sees him compared with Jack Ma and Pony Ma, the founders of internet giants Alibaba and Tencent (there is also the coincidence that they share the same surname).

Going by the English name of Peter, Ma was born in Guangdong. According to 21CN Business Herald, his father was a Red Army veteran who fought all the way from his native Jilin province (which borders Russia and North Korea) to China’s deep south, helping to “liberate” Guangdong. Ma junior then took a job as a driver after high school, ferrying explosives to construction sites. He was undeterred by the danger as he thought he would come across more opportunities driving around some of China’s most pro-reform cities. A key moment came in 1983, 21CN reported, when he was sent to work for Yuan Geng, also a Red Army veteran who became one of the Party officials tasked with promoting China’s earliest market-based policies in Shenzhen.

Reportedly Yuan was impressed by the intellect of the untalkative Ma, putting him in charge of the human resources department at a state-owned industrial park run by China Merchants Group.

Ma has never confirmed the reports that he once worked as a driver for Yuan (it was unusual for government officials to travel in private vehicles back then). But what’s recorded in Ping An’s corporate history is that Ma was chosen by Yuan to head a controversial pilot scheme to offer insurance services in Shekou, Shenzhen’s port district, in 1988.

With the 32 year-old Ma as boss and funded by China Merchants, the insurance unit started out with 13 staff and a bicycle. But from these meagre beginnings it has grown into today’s Ping An (literally, ‘Peaceful and Secure’), China’s largest insurer with a market value of more than Rmb1.5 trillion ($220 billion) as of this week.

On the way Ma has profited handsomely: in 2007 his remuneration topped Rmb66 million, making him “the highest paid CEO in China” at the time. Yet the title created problems as onlookers questioned whether Ping An was a private-sector company or just another state-owned financial firm. Ma’s annual salary was later cut to less than Rmb10 million but National Business Daily says he remained one of the best-paid CEOs, given that top officials at other state-owned heavyweights often make less than Rmb1 million a year.

Ping An said last week that Ma has opted to step down after a long career because its co-CEO system has matured, delivering a “division of responsibility” and a “collective decisionmaking” process.

Case two: “China’s 2nd richest man”

While the resignation of Ma, at 65, had a feeling of inevitability, the second departure caught most onlookers by surprise. Coming just a few hours after Ping An’s reshuffle, e-commerce firm Pinduoduo announced that its 40 year-old founder Colin Huang was leaving his position as company CEO. Similar to Ma’s move, Huang retains his chairman role.

Ping An is one of the fastest-growing insurers in the world – taking 30 years to grow from nothing to almost twice the size of the far older AIA. Shopping sensation Pinduoduo has expanded at an even more blistering pace: Huang only set the company up in 2015, when most commentators were adamant that China’s e-commerce sector was an impregnable duopoly, dominated by Alibaba and

But Pinduoduo was only 34 months-old when it became the youngest of the Chinese start-ups to go public in the United States in 2018 (a record that was broken by the two year-old Qutoutiao, a news aggregating platform, a few months later). And it has kept growing since then: at the end of March this year, it said the number of active shoppers on its app had grown to 628 million.

That compares with’s 387 million and is not too far behind Alibaba’s 726 million.

Investors have been impressed with Pinduoduo’s progress and largely undeterred by the accounting scandals miring other former unicorns from China, such as Luckin Coffee (see WiC490). In fact Pinduoduo’s share price has tripled over the past year in a rally that saw its market value surpass $100 billion. Thanks to a 43% stake in Pinduoduo, Huang’s personal worth had reached $45 billion last month, when Forbes reported that he had surpassed Jack Ma in its Real Time Billionaire Index. Only Tencent’s Pony Ma was ahead of him in the rankings.

Within two weeks Huang would give up his position in the index, stepping down as company CEO and pledging to donate a 2.37% stake in Pinduoduo to Starry Night, his new charitable foundation.

He has transferred another 7.74% of his shares to the Pinduoduo Partnership, a core group of managers, in a structural overhaul believed to be modelled on the Alibaba Partnership (see WiC424).

In effect, Huang is incentivising the next generation of Pinduoduo leaders. However, the share transfers have reduced his stake in Pinduoduo to 29.4% from 43%.

Based on the company’s latest market value Huang has given up nearly Rmb100 billion in net worth, according to China Entrepreneur magazine.

“I hope that through the management changes, we can gradually hand over more managerial duties and responsibilities to our younger colleagues, giving space and opportunity for the team to grow, and driving Pinduoduo to become a more mature company with continuous entrepreneurial spirit,” he said in a letter to employees.

Why is Huang stepping down as company CEO at such a young age?

“Huang seems determined to make the point that he is not interested in becoming China’s richest man,” China Entrepreneur remarked, with a number of tech news portals coming to a similar conclusion.

Some of this interpretation seems to stem from Chinese proverbs that advise the rich to hide their wealth and avoid others’ jealousy. The sayings have added an meaning today, when a number of the country’s wealthiest people have fallen victim to “the curse of Forbes” (see WiC270) and disgraced themselves (Gome’s Huang Guangyu – once China’s richest man – was released from a decade in jail last month; see WiC502).

One view is that Huang still harbours the ambition of seeing Pinduoduo outgrow the likes of Alibaba and Tencent but that he wants to avoid the distractions created by holding the media moniker as one of China’s richest people.

In this perspective Huang could also be heeding the advice of his long-term mentor Duan Yongping, the low-key tycoon behind smartphone brands such as OPPO and Vivo. Many believe that Duan is near the top of the wealth leagues (see WiC409) but he was also 40 when he started to withdraw from the media limelight and moved to the US, according to Leiphone, a tech news site.

Prior to his relocation Duan also set up a charitable foundation, making a large donation to Zhejiang University (also the alma mater of Colin Huang).

Duan and Huang are linked by more than this ‘old boy’ connection. While Duan has generally shunned media interviews, Huang has spoken about his personal relationship with Duan, talking extensively about his influence on his career too. “He [Duan] has repeatedly educated me that I need to do the right things,” Huang told Time Caijing, a financial website, in an interview in 2017.

Duan was an angel investor in Pinduoduo, although he had taken Huang under his wing a long time previously. After winning an auction to attend a charity lunch with Warren Buffet in 2006, Duan invited the 26 year-old Huang to join him for a few hours of advice from the Sage of Omaha. Duan has continued to support his protege where he can: a recent investment in J&T Express, a new delivery firm in China, is believed to be partly aimed at boosting the logistics capability in Pinduoduo’s ecosystem (see WiC494).

One major difference between Duan and Huang, Leiphone says, is that Duan has already identified a core group of trusted partners to run the businesses in which he has invested. The roster includes OPPO’s Tony Chen, Jet Lee at J&T Express, as well as Huang himself.

Leiphone wonders whether Huang and Pinduoduo are both too young for the tycoon to do something similar with his own executive team. Alibaba’s partnership team has taken shape over a longer period as well, with nearly all of its 37 members having worked with Jack Ma for more than 10 years.

Perhaps tellingly, Huang has promoted Chen Lei, his chief technology officer, as his replacement as CEO. China Entrepreneur notes that Chen was a classmate of Huang’s during a stint at the University of Wisconsin-Madison, and that Chen has worked alongside his former boss since his first business venture Xinyoudi (founded after Huang left Google – and in which Duan invested too).

Even after cutting his stake Huang still controls Pinduoduo through his voting rights. So while Chen will be trusted to manage the day-to-day operations at the online giant, Huang is going to be central to the major strategic decisions, in a role that seems to mirror much of his mentor Duan’s.

Is collective decisionmaking going to be a wider trend for Chinese firms?

Keyman risk has become a topic of greater concern for investors in some of China’s largest firms (see WiC424), after’s chairman and CEO Richard Liu was arrested two years ago in Minnesota on allegations of sexual assault.

The case was eventually settled out of court, allowing Liu to turn his focus back to, where he is reportedly back to working 98 hours a week (see WiC449).

Nevertheless the company’s share price suffered in the wake of the scandal and Liu has started to delegate more of his roles to his key executives. Prior to’s secondary listing in Hong Kong last month, he had resigned from senior positions in at least five of the company’s units, National Business Daily reported.

Wang Chuanfu, founder of battery producer and carmaker BYD has also been relinquishing more of his managerial roles, stepping down as legal representative and chairman of at least 10 of its operating units, including the key one in BYD Auto.

Then, of course, there is Jack Ma. The 55 year-old retired last year as chairman of Alibaba although he has retained a key position on the committee that decides appointments at the Alibaba Partnership, a cornerstone for the company’s longer-term planning.

Commentators now wonder whether the likes of Pinduoduo and will try to emulate more of this partnership structure and decentralise more of the decisionmaking away from the founders towards a more collective model.

In recent years Ping An has been trying to reposition itself as a fintech play rather than a traditional insurer. But unlike many of the other major tech firms it doesn’t have a dual shareholding structure (Alibaba’s 37 partners own no more than 15% in the company, for instance, but control a majority of the voting rights).

Another difference is that Peter Ma has nothing like the personal stake that Colin Huang enjoys in his company.

Ping An’s shareholding structure is more scattered. Thailand’s Charoen Pokphand Group (see WiC242 for the Thai giant’s dealings in China) owns a 22% stake in the company’s Hong Kong-listed stock, which translates into about 9.3% of the Shenzhen group’s overall shares. An investment firm controlled by the Shenzhen government is the second biggest shareholder with a 5.27% stake (but there is no government representative sitting on its board – suggesting the state’s role is a relatively passive one).

As it transitions away from Ma’s long stewardship of the company, Ping An looks to be following the broader trend by moving towards a more collective decisionmaking model.

It is too early to proclaim that the ‘tycoon era’ has reached its sunset phase, especially when billionaires such as Huang and Duan can still wield such influence from behind the scenes. But a combination of succession planning and a changing political climate hints that the ‘late afternoon’ has arrived and many of the most high-profile big business bosses are adjusting accordingly…

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