Loctek: Digital Transformation to a Cross-Border E-business

On July 15, 2021, the founder and chief executive officer (CEO) of Loctek Ergonomic Technology Corp. (Loctek), located in Ningbo, China, was reviewing the mid-year financial report of his company. Loctek was a global leader in manufacturing and exporting office furniture—primarily monitor brackets and height-adjustable desks. Figures in the report portrayed the company’s solid growth in the midst of the global pandemic; the contribution from Loctek’s cross-border e-business was hard to miss. These figures assured the CEO that transforming Loctek from a traditional exporting business to a cross-border e-business was both correct and rewarding, despite some painful bumps and detours in the process. The CEO now had to decide whether to continue expanding Loctek’s overseas warehouses. If such an expansion were to occur, the resultant warehouse system could be opened to other small and mid-sized firms where international business had been strangled by limited storage capacity abroad. This idea, though never intended, had emerged during Loctek’s digital transformation. Considerable investments—in the millions of dollars—were at stake.