Huang Zheng, who has a fortune of 320 billion yuan, and 600 million people with a monthly average of 1000 yuan

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Article / Liu Shengjun
Source: Liu Shengjun (ID: Adam Smith Economics)
“Inheritance tax” is the key to narrow the income gap.
01
Regardless of the epidemic situation, promotion to the second richest man
In the global chaos brought by the epidemic, Huang Zheng, the founder of pinduoduo, has risen to 45.4 billion US dollars (321 billion yuan), surpassing Ma Yun, 56, to become the second richest man in China, next to Ma Huateng, 49, with 51.5 billion US dollars.
Huang Zheng is the richest man in China in just five years, which is called the speed of light. There are three main points that support this speed of light:
• group storage, large-scale purchase, direct order to factory
• social e-commerce based on mobile Internet
• low price, low price, low price
02
Familiar routine
Pinduoduo’s routine is similar to Taobao’s earlier one: attracting users at low prices. This is the classic way of subversive innovation: low-end subversion.
The rise of Taobao is also a classic low-end subversion. But Taobao, after its success, had to “bid farewell to the low end”, because:
The pressure of profit is inevitable: to attract users by burning money can be temporary, not forever. In order to charge, Taobao once caused social disturbance. In October 2011, the new regulations of Taobao Mall were adjusted. More than 8000 small and medium-sized Taobao sellers gathered in YY voice platform and decided to carry out malicious attacks on the big stores of Taobao Mall by means of taking pictures of goods, giving bad comments, refusing to pay and so on. With Ma Yun and Taobao’s tough response, the “siege” continued to escalate, with nearly 50000 participants, becoming a network event comparable to “Tencent battle 360”. Some sellers of Taobao Mall pulled down banners at Taobao headquarters in Hangzhou to protest.
• the pressure to crack down on counterfeits is overwhelming: Alibaba’s listing has triggered a worldwide crackdown on counterfeits and litigation threats. In 2008, the U.S. trade representative’s office mentioned the issue of fake goods on Taobao. In 2011, Taobao was listed as a “malicious market”. In 2012, the US trade representative removed Taobao from the list of “malicious markets”. Three years later, the U.S. government added Taobao to its “malicious market” list. In 2014, Kaiyun group, which owns Gucci and other luxury brands, filed a lawsuit against Ali in New York. After that, the two sides quickly reconciled, but less than a year later, Kaiyun group sued again. Ali was forced to set up the world’s largest anti fake team of more than 5000 people. In April 2016, Alibaba announced to join the international anti counterfeiting alliance IACC. Unfortunately, since Alibaba joined the international anti counterfeiting alliance IACC, Gucci, Michael kors, Tiffany & Co. and other brands have announced to withdraw from the organization. In May 2016, IACC was forced to suspend the membership of Alibaba group.
Alibaba, which broke through the “critical mass”, gradually “washed white” through many years of efforts and finally landed successfully. But Alibaba’s landing has given pinduoduo a chance to swim in the sea.
03
600 million people behind pinduoduo
Although pinduoduo has innovation and breakthrough in business model, in terms of its “business essence”, pinduoduo is Taobao in its early years. To put it bluntly, pinduoduo is “low price, low price, low price”. How is this low price realized?
• burn money. To realize the “platform effect” by burning money has become the successful door of the Internet world. In 2018 and 2019, pinduoduo’s sales expenses were 13.44 billion yuan and 27.17 billion yuan respectively, accounting for 102.5% and 90.2% of the operating revenue respectively. As of the first quarter of 2020, the accumulated loss since 2016 has exceeded 20 billion yuan.
• group buying: through a mode similar to “group buying”, large-scale purchasing is realized, forcing suppliers to reduce prices and squeezing suppliers’ profit space.
• Fakes: customers’ obsession with low prices is a stimulant for fakes. Huang Zheng also admitted: “pinduoduo has learned from the experience of the previous people in this process. It may be difficult for us to cross these historical stages (referring to the fake goods on the platform), but we are going a little faster on the basis of our predecessors.” According to the data of China e-commerce research center, pinduoduo’s complaints accounted for 13.12% of the industry in 2016, ranking first in the industry. The causes of complaints mainly include the quality problems of fake and inferior products, rotten fruits, wrong versions, etc., as well as the service problems of false delivery and rejection of return. According to 2017 pinduoduo’s annual report on consumer rights protection, in 2017, pinduoduo took the initiative to remove 10.7 million suspected infringing goods and blocked 40 million infringing links throughout the year. This data, like Alibaba’s huge anti-counterfeiting team, is not so much an achievement as a mapping of problems.
While looking up Huang Zheng’s dazzling wealth, we can’t forget the 600 million people with a monthly salary of 1000 yuan. Without them, why Huang Zheng? Huang Zheng said:
• whole category expansion or traditional traffic logic, brand upgrading is a perspective of people in the five rings. I don’t think it’s right to upgrade the brand and expand the whole category of pinduoduo. What we need to do is always match, let the right people buy the right things in the right scene.
Fu Linghui, spokesman of the National Bureau of statistics, responded to the hot topic of “600 million people earn 1000 yuan a month”:

According to relevant data in 2019, the corresponding population of 40% households in the low-income group and the lower middle income group is 610 million, with an annual per capita income of 11485 yuan and a monthly per capita income of nearly 1000 yuan. These data reflect that the main contradiction of our society pointed out in the 19th National Congress of the Communist Party of China is the contradiction between people’s growing needs for a better life and unbalanced and inadequate development, and reflect our basic national conditions.
04
It’s helpless and sad to use pinduoduo
For the phenomenon of pinduoduo, Liu qiangdong has a classic comment:
• I don’t care much about different business models, I only care about customer experience. If you have shopped in China several times, maybe only three times, you will have your own answer.
But from the data point of view, pinduoduo is still strong: in the first quarter of 2020, the average active users were 487.4 million, up 68% year on year. To some extent, the adverse growth of pinduoduo reflects the “consumption degradation” brought by the new crown black swan epidemic.
Pinduoduo is obviously not the “savior” of 600 million people. We must remember two points:
Today’s houlang has a lot of competition. It won’t be long before it will wash white and go ashore like Qianlang Taobao.
• a lot of people use it, just because they have no choice.
05
How to help 600 million people?
How to solve the problem of equity while developing is a world-class problem for a country. At this point, the United States failed. In 2019, the White House Council of economic advisers reported that more than 500000 people live on the streets every night in the United States, and only 35% of the homeless people live on the streets.
We cannot repeat the mistakes of the United States. How to help 600 million people?
First, we should start levying “inheritance tax” as soon as possible. If the tax rate is 50%, only Ma Huateng, Huang Zheng and Ma Yun can contribute about 500 billion yuan of “heritage tax”. If all the taxes are paid to 600 million people, the per capita is nearly 1000 yuan. It can be seen that inheritance tax is an effective tool to narrow the social income gap. For the richest people, they should rejoice in and be relieved from the inheritance tax: 1) Jesus said to his disciples, “it’s harder for the rich to go to heaven than for the camels to wear needle eyes”; 2) leaving too much wealth to their children, which will crush their normal personality and happiness; 3) Ma Yun said sincerely, “it’s really hard for people who earn 12 billion a month , this money is no longer yours. You can’t spend it. You have to do something after you get it back. ”
Second, realize the transformation from “investment finance” to “welfare finance”. Compared with European and American countries, China’s financial expenditure on infrastructure accounts for a high proportion. In the future, we should focus on social security fields such as health care and education, especially education. Education is the best way out of poverty for the poor.
Third, we should strengthen the anti-monopoly review, take measures including fines and spin offs to curb Internet monopoly and promote the development of small and medium-sized micro enterprises. It is not bat that can employ 600 million people, but small and medium-sized micro enterprises as “56789” of the national economy.
(statement: This article only represents the author’s point of view, not Sina’s point of view.)