Daddy Lab: A Chinese Social Enterprise's Dilemma

This case follows the development of Daddy Lab, a Chinese social enterprise founded in 2015 by Wenfeng Wei. With extensive experience in product safety testing, Wei started Daddy Lab to tackle the social problem of poor-quality and hazardous consumer products used by children and their families in China. By identifying, testing, and reporting such products to the public via social media, Wei became an internet celebrity. Nicknamed "Daddy Wei", he racked up millions of followers on China's most popular social media platform, WeChat. In 2018, Daddy Lab received China Gold Social Enterprise certification from the China Charity Fair. That same year, Daddy Lab generated average monthly revenue of approximately ￥5 million by selling high-quality, non-hazardous products online. As Daddy Lab continued to grow and tackle its social mission, it faced numerous challenges. Social entrepreneur Wei realized that he faced the dilemma of trying to make the world a safer place for children and their families while making a profit to sustain this purpose. Wei had established a model to make profits through Daddy Lab's dual roles as a "reviewer" and a "seller" but wondered whether it was appropriate for this social enterprise. As Wei considered Daddy Lab's future, the following questions kept him awake at night: Was Daddy Lab's current business model effective in achieving its social and financial goals? How could Daddy Lab better manage its dual roles as a "reviewer" and a "seller"? How could Daddy Lab become more sustainable in the future?