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Babyonline Leveraging Cross Border E Commerce Case Solution

Solution Id Length Case Author Case Publisher
2530 1300 Words (6 Pages) Ning Su, Zhangfeng Fei, Kejing Zhang, Xiaokang Zhao Ivey Publishing : 9B19M104
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The case is timed during the year 2018, and is placed in the Suzhou city of china. The case focuses on the wedding dress industry in the region, and its challenge in meeting one of the harshest clampdowns by the government. In 2018, the Chinese government required all wedding dress factories that did not comply with the working and safety standards to close down. While the action of the local government was expected, the urgency of the action and its immediate implementation came as a surprise and a shock to most of the wedding dress producers – including the founder and chief executive officer of Suzhou Beibao E-Commerce Co. Ltd. (Babyonline). Babyonline was established in 2012 and largely dealt with cross-border e-commerce relating to wedding dresses. Babyonline largely dealt with the trade, and supply of wedding dresses to other countries with the aim of fulfilling the gap of affordable, high-quality wedding dresses and products in countries where similar products were retailed at pricey costs.

Following questions are answered in this case study solution

  1. Babyonline: Leveraging cross-border e-commerce – Case Summary 

  2. Babyonline uses technological advancement and digitalization for growth and success 

  3. Comparison with other players in the market

Case Analysis for Babyonline Leveraging Cross Border E Commerce

However, the clampdown initiated by the government had caused worry for Babyonline since it could lead to subsequent issues in the successful management of the company. The company had also decided to opt for a customized, and make-to-stock system to control costs. As a result of this, it had experienced increased inventory issues, such as that of selective selling by some sales representatives. As a result, the company faced a number of structural inventory challenges, and needed to resolve them to be able to compete successfully with other players in the market. This resolution required attention to internal incentives, as well as organizational and management structure within the company.

2. Babyonline uses technological advancement and digitalization for growth and success 

Success and growth for Babyonline was rooted in the e-commerce principles, and the company’s active engagement with e-commerce and e-trade. China’s increased inclination towards technological progress, as well as digitalization, supported the operations of Babyonline, and led it to explore and penetrate foreign markets smoothly. 

Business model and operational support

Operational as an online store that offered wedding dresses to foreign countries and consumers at affordable costs, and opened stores only after the successful building of customer base, For Babyonline, the technological advancement and progress, and high rates of digitalization had been fundamental for the success of the business strategy. Technology was also used by Babyonline for customized production and stocking models that it adopted during the time. Technological advancement and dependency allowed the company to engage in make-to-order systems, and successful inventory management that accompanied. 

Cost-effective and risk effective entry into foreign markets

With digitalization, Babyonline was able to carefully mitigate risks of entry into the foreign market. The company contracted and partnered with third party retailers such as Alibaba and Dhgate to stock its dresses on their platforms. The selected retailers, in turn, already had established consumers in foreign countries, such as the USA, which consumers used to navigate, and order products, especially from China. In doing so, the company ensured that it averted risks of direct entry into a foreign market – which would have required substantial financial and capital investment. At the same time, this model also allowed the company to effectively manage delivery costs through partnering with an established network.

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