In China’s Slumping Economy, Pinduoduo’s Reclusive Billionaire Founder Has Managed To Gain $15 Billion

China’s economic headwinds and a sweeping crackdown on private enterprises have battered the fortunes of many tech billionaires, but one mogul has managed to stay ahead of rivals and gain a whopping $15 billion this year with his company’s low-cost products.

Colin Zheng Huang, the reclusive billionaire founder of discount e-commerce site Pinduoduo, is now worth $26 billion. Huang is currently the fourth richest person in China, according to Forbes’ real-time billionaire tracker, ahead of fellow e-commerce tycoons Jack Ma of Alibaba and Richard Liu of JD.com.

Huang made the advances as shares of the 42-year-old’s Nasdaq-listed company recovers much faster than its peers. Shares of Pinduoduo have rallied 200% since a March low, when China’s regulatory crackdown, auditing spat with the U.S. and the company’s own worrying business outlook all pummeled investor confidence. But the unfavorable economic conditions later turned out to be a boon for Huang, who stepped down as Pinduoduo chairman last year and keeps a low profile, but continues to derive his wealth from his 28% stake in the company.

With the Chinese economy mired in a slump, more and more consumers are migrating to Pinduoduo for cheaper goods. Estelle Zhang, a 34-year-old who works at a bank branch in Beijing, says she now uses Pinduoduo more frequently than before. Zhang recently bought 2kg of lemons on Pinduoduo for less than $3, which is cheaper than at local supermarkets.

Led by CEO Chen Lei, Pinduoduo is investing more to connect farmers directly with shoppers, an area that China’s policy makers keenly support, according to Kenny Ng, a Hong Kong-based securities strategist at Everbright Securities. The company beat market expectations and reported a 65% year-on-year rise in revenues to 35.5 billion yuan ($5 billion) for the third quarter, marking another three months of rapid growth after sales surged 36% during the previous period.

“Platforms selling value-for-money products are benefiting from the current environment,” says Shawn Yang, a Shenzhen-based managing director at research firm Blue Lotus Capital Advisors. “And Pinduoduo has also done a lot of optimization—for example incorporating more short video feeds to its main app—to attract users.”

Yang says the gloomy economic conditions may continue be in Pinduoduo’s favor for the next two quarters, as any economic recovery would take time to kick in. Speculation has risen that China may continue to ease its Covid-related restrictions after protests against the stringent measures broke out over the weekend, with officials now vowing to accelerate vaccination of the elderly—a step widely seen as crucial to reopening from covid restrictions.

Another major drag on the economy—namely the real estate industry—received further funding support after authorities said they would relax financing rules for developers. Earlier this month, Chinese regulators unveiled a comprehensive package of measures aimed at supporting the ailing property industry, boosting the fortunes of female real estate billionaires Yang Huiyan and Wu Yajun.

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Pinduoduo, in the meantime, said some factors behind the current pace of high growth are not sustainable. On an analyst call Monday, executives said some projects originally slated for the past quarter weren’t implemented on time, which had led to a reduction in expenses and subsequently boosted profits 546% to $1.5 billion from the same period a year ago.

“Profitability is partially due to such time lapse,” says Liu Jun, the Pinduoduo’s vice president of finance, at the analyst call. “We will continue to step up investments, especially to support agriculture and manufacturing industry through technology. And this may cause fluctuations in our future profitability and the Q3 level will not continue.”

At the same time, Pinduoduo is betting on overseas markets for future growth. The company launched in September shopping platform Temu in the U.S., selling discounted products in a direct challenge to Amazon and Chinese billionaire Chris Xu’s Shein. Executives said the expansion is still at its early stage, but Temu already ranks in November as the most downloaded shopping app in America, according to analytics firm Sensor Tower.