According to the US Securities and Exchange Commission (SEC), Singapore’s former Foreign Minister George Yeo has recently accepted Pinduoduo’s offer to be its independent director.
The Shanghai-based e-commerce firm trusts that Yeo will be able to provide professional advice to the company regarding platform governance.
Pinduoduo recently filed for an IPO in the United States on June 30. While the firm hasn’t disclosed how much it plans to raise, Reuters reports it could be as high as US$1 billion.
At the time of its funding round in April, the company was valued at US$15 billion and is backed by existing investors Sequoia Capital China and Tencent Holdings Ltd.
As the company’s new independent director, Yeo will act as a check and balance for the board and management.
He will act as a guide to the company and his primary role broadly includes improving corporate credibility and governance standards functioning as a watchdog, and playing a vital role in risk management.
The 64-year-old has had an illustrious public service and contributions to Singapore for the past 23 years.
Following his election into Parliament, Yeo has served in various ministries, including the Ministry of Finance, Ministry of Information, Communications and the Arts, Ministry of Health, Ministry of Trade and Industry, and the Ministry of Foreign Affairs.
After withdrawing from the political landscape in 2011, he became active in business and academic circles.
He served as the independent director of AIA, New Yangon Development, Singapore Wilmar International Group, and other universities and institutions such as Harvard Business School, IESE Business School and Peking University.
Pinduoduo The Most Downloaded App In China
For those unacquainted with Pinduoduo, it is an online shopping service launched in September 2015 that combines steep discounts with social media.
The app is a mash up of Facebook and Groupon, and is basically like a digital version of shopping at the mall with friends, where you can share ideas and get feedback from people you trust.
But the products they list do not include foreign brands. Instead, it offers all sorts of clothing items and household appliances, sold by small Chinese companies or white-label manufacturers.
Users browse the app for items they want to buy, and then share links of the listings with friends on WeChat, China’s most popular messaging app.
If enough people are interested in getting the item, they can benefit from a group discount.
By cutting out the middlemen, advertising and acquisition costs, Pinduoduo is then able to offer items at up to 20 per cent cheaper than market price.
Leveraging the power of WeChat is a very strategic move – it helps users spread word about deals, which doubles as word-of-mouth marketing for Pinduoduo itself.
Pinduoduo is now one of the most downloaded apps in China, overtaking Alibaba’s Taobao, T-mall and JD.com for the past few months.
With its reputation for low prices, Pinduoduo has garnered a large pool of users based in lower-tier cities.
In December 2017, Pinduoduo users who have used the app at least once a month have grown more than eight-fold to 156.5 million users, according to QuestMobile.
PDD Aims To Be The ‘Singapore’ Of The E-Commerce Industry
According to founder Colin Huang, who is an ex-Google engineer, he does not aim for the company to be the biggest, richest, or most established company.
Since Singapore is known to have a very strict rule of law, it hopes that its platform governance will mirror our model.
Pinduoduo must be the ‘Singapore’ of the e-commerce industry and to achieve this, we must never give up doing the right thing in the field of platform governance. At the same time, we will also never let honest and law-abiding businesses suffer.”
It has a strict policy on this and will compensate customers should they encounter a dishonest seller, which justifies why it has a rating of below 3 per cent for “problematic sellers” on its platform.
All the platform governance efforts they push out will all be focused on the consumers, especially in the sales of fake goods.
“The advancement of all the systems will be difficult at the beginning because we are breaking everyone’s comfort zone. But this is the right move and we are willing to pay the price.”
“This is necessary to lay a particularly good foundation for the later fights. We will be able to weed out sellers who simply want to earn a vote and leave, or those who are not serious about managing their businesses in the long run.”
In a letter addressed to Pinduoduo’s stockholders, Huang expressed that he wants his company to resemble a “Costco Disney” that allows users to buy what they want at the most economical price, making its consumers happy.
He added that it should also be a community of users, businesses, administrators and platform service providers who are interdependent and symbiotic.
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