George Yeo to be independent director of US$15 billion China e-commerce site Pinduoduo
He wants Pinduoduo to become the 'Singapore' of the e-commerce industry
Singapore’s former Foreign Minister George Yeo has recently agreed to be an independent director of Pinduoduo, a Shanghai-based e-commerce site, with an estimated valuation of US$15 billion.
An independent director is a director, or member, of a board of directors who does not have a material or pecuniary relationship with company or related persons, except sitting fees.
The firm filed for an IPO in the U.S. five days ago (June 30).
Fast-growing startup in China
According to Bloomberg, Pinduoduo, or PDD, is one of the fastest growing startups in China.
The app, which is sort of a cross between Facebook and Groupon, has been one of the most downloaded apps in China for the past several months, edging out Alibaba’s Taobao, Tmall, and even JD.com, another e-commerce giant known for its speedy deliveries.
Its premise is simple.
According to Quartz, users look for items they want to buy on the app, then share the listings with friends on WeChat, China’s most popular messaging app.
If enough people are interested in getting the item, they can then get a group discount.
By cutting out middlemen, advertising and acquisition costs, the social media driven platform is then able to offer items at up to 20 percent cheaper than market price.
Yeo’s insight on diplomacy
Yeo’s latest appointment was covered by the Chinese media.
An article by Huanqiuwang briefly mentioned his political background and subsequent career after withdrawing from politics.
It also included his insight gleaned from his experience as foreign minister from 2004 to 2011.
Singapore’s foreign policy of neutrality
He was quoted as saying during an interview with China’s state broadcaster CCTV, that Singapore pursues a neutral foreign policy that strives to maintain good relations with all countries, especially keeping a balance between major powers.
“We must have friends that love to deal with us, as well as friends that like to deal with others through us.”
“Singapore was able to transform the lives of its people within two generations, despite harsh conditions in its surroundings when it first started out.
Actually, Singapore is like a company.
Its resources are not found on its home territory, but rather, in China, the United States, and many other countries.
It’s a small country, but it’s able to hold itself on the international stage with much larger countries.
And its citizens are very prosperous.”
Yeo’s goals for PDD
According to the article, PDD invited Yeo to be its independent director as it wanted to obtain more professional advice regarding platform governance.
It pointed out that the goals for PDD is not for it to become the largest, the richest or the most respected company.
Instead, Colin Huang’s wish is for PDD to become a company that is valued for its uniqueness, much like Singapore.
“PDD must be the ‘Singapore’ of the e-commerce industry in that it must stick to its principles and never stop doing what’s right in its management.
At the same time, it must never shortchange honest sellers.”
It also touched on PDD’s success so far as compared to other e-commerce sites, saying that its insistence on compensating customers should a single dishonest seller be found has helped it achieve a rating of below 3 percent for the category “problematic sellers”.
Huang also expressed his thoughts on PDD’s platform governance, saying:
“PDD is determined to stand on the side of consumers.
Should there be any problem with product quality, especially when it comes to fake goods, we will adhere to strict compensation guidelines.
The initial stages of pushing for new changes are expected to face some teething problems as you are breaking people out from their comfort zones.
But we will persevere for something that’s right, even if some sacrifices were to be made.
PDD will then have a much better foundation, and weed out those sellers who simply want to earn a vote and leave, or those who are not serious about managing their businesses on a long-term basis.”
In a letter addressed PDD’s stockholders, Huang also laid out the kind of platform he wants PDD to be in the future — something similar to a “Costco Disney” that allows users to buy their desired items at economical prices, while deriving joy in the process.
At the same time, he said that it should be a community formed by users, businesses, management staff and platform service providers who can interact with and rely on one another.
Top image via George Yeo/FB