From a rundown office tower in downtown Shanghai, wedding dresses are sold to the US, wristwatches are shipped to France and cheap trainers are sent to customers in the UK.
Dozens of websites and apps operate from the 23-floor Greenland business building, where employees sit in offices that are completely unmarked, apart from the words “Self Confidence” pasted to their glass doors.
One man is behind all these ventures, 40-year-old Colin Zheng Huang, the billionaire founder, chairman and controlling shareholder of one of this year’s biggest sensations, the online shopping app Pinduoduo, whose shares have risen by 261 per cent since January.
But alongside Pinduoduo, which is now worth $170bn, Mr Huang has set up a wide network of other ecommerce and gaming groups in Shanghai together with a tight-knit group of colleagues, making him the city’s undisputed internet king.
Some of these ventures are more famous outside China than Pinduoduo. One of the apps, Vova, is one of Europe’s most popular online shopping services, ranking in the top 10 shopping apps in France and Italy this past quarter, according to Sensor Tower.
The hub of ecommerce and gaming businesses at the Greenland building provided early employees for Pinduoduo, and helped the breakout business with its sales and marketing.
Pinduoduo previously told investors that Mr Huang founded, or was connected to, some of the companies, but in records registered with Chinese regulators they were owned by his associates.
Known as baishoutao, or “white gloves”, it is not uncommon for wealthy Chinese to ask friends or relatives to hold their shares in companies to lessen their personal risk and shield their holdings from public scrutiny.
Mr Huang has only occasionally held shares in his own name in China. Even at Pinduoduo, he signed over all his shares in its Chinese business ahead of the company’s 2018 initial public offering to Chen Lei, Pinduoduo’s chief executive, who he studied with at the University of Wisconsin-Madison.
One apparent stand-in shareholder, a 69-year-old woman from a rural area of inner China known for its Goji berries, held a 90 per cent stake in several of the companies until the Financial Times asked about her identity.
Pinduoduo has told investors in its Nasdaq-listed shares little about the web of companies. Instead it calls Mr Huang a “serial entrepreneur” and says he founded “Xinyoudi Studio” in 2011. No company with that name has ever existed, although xinyoudi.com was once registered.
Chinese media have described Mr Huang as mysterious. It is not even known if he is married. The secrecy extends to Pinduoduo, where employees use nicknames and two former employees said it was rare to know their colleagues’ real names.
Pinduoduo did not respond to a list of questions for comment.
Mr Huang was born in Hangzhou, the hometown of online shopping giant Alibaba. Both of his parents were factory workers and he studied computer science at Zhejiang University before heading to the US in 2002.
He joined Google and worked at Google China before striking out on his own, in the pursuit of both “making money” and “making me a little bit cooler”.
Cashing in his Google stock, he started Ouku, a consumer electronics website and sold it for $2.2m in 2010. His next venture, Leqee, was already under way, with Mr Chen and an Ouku intern registering the company with authorities in 2009 as its founding shareholders. Pinduoduo later told venture capitalists that Mr Huang “successfully founded” Leqee in 2009, according to documents seen by the FT.
Leqee helped big brands run their shops on China’s biggest internet shopping platforms, Alibaba and JD.com. It also became an informal holding group for the succession of new businesses set up in the Greenland building.
Two years later, the group set up another project, Lebbay, which was again owned on paper by Mr Chen and the now former intern. Using the skills Mr Huang learned at Google, Lebbay built a series of online shopping websites that aimed to get to the top of the search rankings for their offerings.
“Building one site only takes a week,” said a former manager, noting the websites’ funnelled orders into the same back end system for fulfilment. Mr Chen had run the operation, reporting to Mr Huang, the employee said.
Another profitable foray began life a few floors above Lebbay. Under the name Shanghai Xunmeng, Mr Huang’s team developed online games such as Joyspade Texas Holdem Poker, targeting south-east Asian gamblers, and Girls X Battle, where players collect an army of girlfriends to fight for them.
Then Mr Huang landed on the idea that would become Pinduoduo. In 2015, he asked his team to build a “social ecommerce” venture. Called Pinhaohuo, shoppers got a better price if they could persuade a friend to buy the same product. The site started with selling fruit, and at one point Mr Huang redeployed 100 employees from Leqee to help out.
A few months later, Mr Huang’s gaming team created a second app applying the same group-buying model to an online marketplace, where any merchant could list their goods. It was named Pinduoduo and 20 key gaming employees shifted to focus on the venture, Mr Huang told local media.
“These were two different roads, Pinhaohuo was pushing to build warehouses and fulfilment, like a JD.com (akin to Amazon) for fresh produce, but the employees from the gaming company didn’t see it as viable,” said Mr Huang.
Pinduoduo’s business model quickly won out and swallowed the Pinhaohuo team. But the web of companies in the Greenland building were tangled tightly together. Lebbay was used to register Pinhaohuo’s social media accounts, which were key sales channels, and brought in a quarter of the combined company’s sales in 2016. Leqee was listed as Pinhaohuo’s operator on its website. Shanghai Xunmeng, the gaming arm, ran Pinduoduo.
When outside investors ploughed $50m into Pinduoduo in 2016, the ownership of the group of companies began to change. Xunmeng’s 90 per cent owner on paper, 69-year-old Gu Yanping from rural Ningxia province, transferred her stake to the entity that American investors buy into today. Pinduoduo later said in its prospectus that Xunmeng was “controlled by the Founder (Mr Huang) since its establishment.”
Ms Gu immediately set up a second company for the spun-out gaming assets. One early Pinduoduo investor acknowledged that the web of companies were tied to Mr Huang. “The other companies are just making a little money, they don’t have any impact,” the person said. With Pinduoduo “he wants to make a great company,” the investor said.
“Every company has its own employees and has its own team, he has to be responsible to them, he can’t just shutter the companies,” the person added.
This past year the gaming business has enjoyed sales of $489m, according to data from Sensor Tower. Together with Pinduoduo, it has moved to a gleaming new tower called the Shanghai Arch, where employees wearing anime costumes and bright blue wigs to match the characters in their games, write code a few floors beneath Pinduoduo’s fast-growing team.
The other ecommerce ventures remain in the Greenland building. But the lines between the companies are still blurred.
Six current and former employees at Vova and the other ecommerce sites told the FT that while they were recruited by Lebbay or Leqee, their paychecks came from the company Ms Gu set up in 2016 to take over the gaming assets being spun out of Pinduoduo. “It was always a mystery, they never told us why,” said Ice Chen, a former software developer for one of the sites.
After the FT asked two of the companies about Ms Gu’s identity this summer, she transferred almost her entire stake in both firms to a man, who has also set up an investment partnership for Pinduoduo this year, business records show.
It was the latest of a raft of share transfers Mr Huang and his acquaintances have made, with most carried out in the spring of 2018 as Pinduoduo prepared for its Nasdaq listing.
The most consequential share transfer came in May 2018 when Mr Huang transferred majority ownership of Pinduoduo’s main Chinese operating entity, known as a variable interest entity, to Mr Chen.
Other Chinese tech executives, such as Pony Ma of Tencent or Richard Li of Baidu, have kept tight control of their onshore companies, which run their businesses and hold crucial licences. But Mr Huang holds no shares in Pinduoduo’s VIE.
“Colin must really trust Chen Lei or it’s a scary situation, for both Colin and US investors,” said Jesse Fried, a corporate governance expert at Harvard Law School.
Additional reporting by Nian Liu in Beijing and Wang Xueqiao in Shanghai