ILOOF: EXPANDING FROM ONLINE TO OFFLINE CHANNELS
CASE STUDY SOLUTION
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SYNOPSIS
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Iloof Technology Co. Ltd. (Iloof) is a Chinese start-up high-technology company at the forefront of the smart
water bottle market, one of the newest sectors in the reusable water bottle industry. Smart bottles or cups, also
known as interactive water bottles, are technologically advanced devices that have wireless communication
capabilities to connect with electronic devices, such as smart phones. Moreover, smart water bottles are
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designed to help record and optimize the user’s water intake and develop healthy drinking habits.
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After two years of research and development (R&D), Iloof’s first edition smart water cup, HeyDo S1,
was released in 2016, aiming to target youth. However, after three quarters of growth, October 2016’s
sales slowed, and the company’s total sales were on the edge of downturn. To maintain sustainable
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growth, Iloof was evaluating a proposal to expand sales to traditional stores or offline channels. Iloof’s
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The Case Solution Starts From page 5
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ASSIGNMENT QUESTIONS
1. What was unique about the smart water cup industry?
2. Why did Iloof begin with online sales and why was Iloof considering offline expansion?
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3. Why did Iloof outsource production?
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4. What were the pros and cons of online and offline channels for sales of the smart water cup?
5. What challenges did Iloof face at the time of the decision?
6. If Iloof expands to offline, how should it manage the omnichannel? What potential challenges might
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Iloof face in its sales channel expansion?
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The Case Solution Starts From page 5
,ANALYSIS
1. What was unique about the smart water cup industry?
Driving factors
A driving factor for the smart water cup was increasing awareness of health and the fitness. On average,
water makes up 60 per cent of an adult’s body weight, from 31 per cent in the bones to 83 per cent in the
lungs. However, a human body cannot store water. Every day, a person constantly loses water through
simple actions such as breathing and sweating. It is essential for bodily health to manage proper hydration
by ensuring adequate water intake.
Rapid urbanization has led to more health-conscious consumers, which has impelled the growth of the smart
water cup market. Moreover, the increase in disposable income and improvements in living standards have
become dynamic factors driving the growth of the smart water bottle market.
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Recent technological advances, such as the Internet of Things and artificial intelligence, have facilitated the
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The Case Solution Starts From page 5
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EXHIBIT TN-2: ONLINE SHOPPERS AS A PROPORTION OF CHINA’S POPULATION IN CHINA AS
OF JUNE IN EACH YEAR (IN MILLION)
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900 100%
tio
801.7
800 751.2 90%
709.6
700 667.7 80%
632.0
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590.6 70%
600
54.3%
51.7% 57.7%60%
So
500 48.8%
44.1% 46.9% 50%
400
40%
300
30%
200 20%
100 10%
0 0%
2013 2014 2015 2016 2017 2018
Online shoppers (left) Proportion of population (right)
The Case Solution Starts From page 5
CASE STUDY SOLUTION
e
pl
m
SYNOPSIS
Sa
Iloof Technology Co. Ltd. (Iloof) is a Chinese start-up high-technology company at the forefront of the smart
water bottle market, one of the newest sectors in the reusable water bottle industry. Smart bottles or cups, also
known as interactive water bottles, are technologically advanced devices that have wireless communication
capabilities to connect with electronic devices, such as smart phones. Moreover, smart water bottles are
n
designed to help record and optimize the user’s water intake and develop healthy drinking habits.
tio
After two years of research and development (R&D), Iloof’s first edition smart water cup, HeyDo S1,
was released in 2016, aiming to target youth. However, after three quarters of growth, October 2016’s
sales slowed, and the company’s total sales were on the edge of downturn. To maintain sustainable
lu
growth, Iloof was evaluating a proposal to expand sales to traditional stores or offline channels. Iloof’s
So
The Case Solution Starts From page 5
, e
pl
m
Sa
ASSIGNMENT QUESTIONS
1. What was unique about the smart water cup industry?
2. Why did Iloof begin with online sales and why was Iloof considering offline expansion?
n
3. Why did Iloof outsource production?
tio
4. What were the pros and cons of online and offline channels for sales of the smart water cup?
5. What challenges did Iloof face at the time of the decision?
6. If Iloof expands to offline, how should it manage the omnichannel? What potential challenges might
lu
Iloof face in its sales channel expansion?
So
The Case Solution Starts From page 5
,ANALYSIS
1. What was unique about the smart water cup industry?
Driving factors
A driving factor for the smart water cup was increasing awareness of health and the fitness. On average,
water makes up 60 per cent of an adult’s body weight, from 31 per cent in the bones to 83 per cent in the
lungs. However, a human body cannot store water. Every day, a person constantly loses water through
simple actions such as breathing and sweating. It is essential for bodily health to manage proper hydration
by ensuring adequate water intake.
Rapid urbanization has led to more health-conscious consumers, which has impelled the growth of the smart
water cup market. Moreover, the increase in disposable income and improvements in living standards have
become dynamic factors driving the growth of the smart water bottle market.
e
Recent technological advances, such as the Internet of Things and artificial intelligence, have facilitated the
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 5
, e
pl
m
Sa
EXHIBIT TN-2: ONLINE SHOPPERS AS A PROPORTION OF CHINA’S POPULATION IN CHINA AS
OF JUNE IN EACH YEAR (IN MILLION)
n
900 100%
tio
801.7
800 751.2 90%
709.6
700 667.7 80%
632.0
lu
590.6 70%
600
54.3%
51.7% 57.7%60%
So
500 48.8%
44.1% 46.9% 50%
400
40%
300
30%
200 20%
100 10%
0 0%
2013 2014 2015 2016 2017 2018
Online shoppers (left) Proportion of population (right)
The Case Solution Starts From page 5
