Natural Factory: The Role of CSR in Starting a Business

This case describes the development of Natural Factory’s social e-commerce model, the role of CSR in the founding of that model, the model’s initial successes, and the limitations it faced latterly. In 2018, Natural Factory had a turnover of over RMB 600 million, and by January 2019, it had nearly 6 million purchasing users and over 27 million followers. Despite such impressive growth, Natural Factory was having trouble acquiring new users. Marketing products directly to end consumers would allow the company to rapidly break through this bottleneck, but this would be at the expense of the small-scale merchants to whom the company owed its success. Su Lujiang, the founding CEO of Natural Factory, was faced with a serious dilemma: how could the company continue to acquire new users without alienating old ones?