This case describes how the Chinese company Huitongda created a B2B platform to systematically connect rural mom-and-pop shops with urban-market-based suppliers, thereby opening a brand-new market for itself and contributing to the modernizing transformation of rural retailing in China. The initial two decades of China's economic reform were marked by a distinct rural–urban divide, as urban areas experienced rapid development of a consumer economy, while rural regions continued to maintain a partially self-reliant way of life. Retail in rural areas was primarily provided by small local shops that had no systematic access to suppliers of modern industrial products. Although substantial improvements in technological conditions and physical infrastructure had been made in rural areas, companies, in general, shied away from developing long-term business there because of the perceived lack of basic business conditions, despite huge demand potential. The founders of Huitongda addressed this problem by building an innovative B2B platform serving thousands of mom-and-pop rural shops with systematic supply chain solutions in a variety of industries while empowering them with digital tools and services for uplifting their operations, logistics and sales management, thereby transforming and modernizing the landscape of rural retail, and creating a thriving blue ocean of rural B2B market for itself. The case of Huitongda is an example of blue ocean creation through an approach called “nondisruptive creation”, a concept coined by W. Chan Kim and Renée Mauborgne in their book Beyond Disruption (2023). This is an approach to create new markets without disrupting existing industries.
This case is intended for use in both MBA and executive classrooms with the following teaching objectives: 1.To explore why the rural market with significant demand potential was largely left untapped by Chinese companies in the 2000s and how Huitongda addressed this problem with an innovative solution. 2.To understand how a resource-rich and big-brand retailer like Alibaba failed to open up the rural retail market, while Huitongda, a start-up with significantly fewer resources, succeeded in doing so. 3.To discuss whether the B2B market Huitongda created is disruptive or nondisruptive to existing players and industries. 4.To understand that disruption is not the only way to innovate, and to discuss the implications of disruptive and nondisruptive innovation approaches for business and society. 5.To expand our current understanding of market-creating innovation by appreciating that there exists an unexplored way to create blue oceans.
- Nondisruptive creation
- Blue ocean strategy
- B2B:Online to offline (O2O)
- Retailing
- Ecommerce
- Market creation
- Online platform
- SaaS
- Supply chain management
- Consumer durables
- Artificial intelligence
- Business and society
- China
- Q22024