Sunyuki: Organic Fresh-Food Distribution Channels
(8 pages of text)
In January 2015, the founder and chairman of Sunyuki Agricultural Co., Ltd. (Sunyuki), was considering a major change to his company. Founded in 2010, Sunyuki was one of the first online fresh-food retailers in southwest China, providing safe, fresh, organic foods to high-end consumers who had a strong preference for high dietary quality. Since its launch, Sunyuki had achieved soaring average annual growth rates of almost 100 per cent. However, it was becoming difficult to attract new customers through online channels alone. Therefore, the founder was considering the option of opening physical stores as an off-line channel to complement the company's successful online sales and distribution channel. Because of rapid growth in the fresh-food industry and intensifying competition, the founder needed to carefully consider the company’s next steps. If Sunyuki opted to expand off-line, how should it proceed? Specifically, how should the company manage a new online and offline strategy in an omnichannel sales and distribution environment?
This case is suitable for undergraduate courses in operations management, supply chain management, e-commerce, marketing, and strategy management, particularly in a section that discusses omnichannel distribution, e-commerce, and supply chain management. This case is also helpful for classes on brand management and customer marketing. This case exemplifies how an online retailer can manage operational and supply chain challenges from the perspective of online and off-line sales channels. After working through the case and assignment questions, students will be able to
- understand the pros and cons of off-line and online channels and explain the driving factors to launch physical stores;
- understand the opportunities and challenges faced by a fast-growing e-commerce enterprise; and
- consider and discuss how e-commerce firms should implement an omnichannel strategy.
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