Li & Fung
About us
Li & Fung Today
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Global multinational headquartered in Hong Kong
World’s leader in consumer goods design, development, sourcing and distribution
More than 100 years of history since 1906
Over 28,000 employees worldwide
Orchestrates over 15,000 suppliers in more than 40 economies to service about
7,700 customers
Member of Hang Seng Index, MSCI Index, FTSE4Good Index, Dow Jones
Sustainability Asia Pacific Index and Hang Seng Corporate Sustainability Index Series
• Market capitalization of approximately US$11 billion
• Awards / Recognitions:
- Fortune’s “World’s Most Admired Companies” (2013)
- The Financial Times’ “FT Global 500” (2009 - 2012)
- Forbes Asia’s “Fabulous 50” (2007 - 2010, 2012)
- Ranked no. 612 in Forbes’ “Global 2000” (2012)
- The Asset Magazine’s “The Asset Corporate Platinum Award” (2009-2012)
- Mr. Bruce Rockowitz was named Asia’s Best CEO for the Hong Kong region in 2nd Asian
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Excellence Recognition Awards and received “Asian Corporate Director Recognition Awards”
by Corporate Governance Asia (2012)
Mr. Bruce Rockowitz ranked as one of the world’s 30 best CEOs by Barron’s (2011 and 2010)
Global and Diversified Customer Base
Trading
Global and Diversified Customer Base
Logistics
Global and Diversified Customer Base
Distribution
Global Network
Trading Office
Trading Offices: 62
Global Network
Trading Office
Logistics Office
DC
Trading Offices: 62
Logistics Offices: 42
DCs: 164
Global Network
Trading Office
Logistics Office
DC
Distribution Offices
Trading Offices: 62
Logistics Offices: 42
DCs: 164
Distribution Offices: 60
Global Network
2011
2012
Change
Trading Offices
63
62
-1
Logistics Offices & DCs
187
206
+19
Distribution Offices
56
60
+4
306
328
+22
Trading Office
Logistics Office
DC
Distribution Offices
Over
300 offices
Trading
Offices:and
62 DCs in more than 40 economies with
Logistics
Offices:
28,000
employees
and 42
a sourcing network of over 15,000 suppliers
DCs: 164
Distribution Offices: 60
Turnover by Geographical Markets in 2012
1% 1%
2%
3%
6%
6%
62%
19%
USA
Europe
China
Rest of Asia
Canada
Australasia
Central & Latin America
S. Africa & Middle East
Sourcing Trends
Sourcing Trends in 2012
6%
Turkey
↑6%
China
↑ 3%
Bangladesh
4%
India
20%
Vietnam
20%
Thailand
1%
Cambodia
3%
Philippines
8%
Indonesia
14%
Guatemala
LF’s Top 10 Countries in Production Volume
2012
2011
1st
China
China
2nd
Vietnam
Bangladesh
3rd
Bangladesh
Vietnam
4th
Indonesia
Indonesia
5th
India
India
6th
Turkey
Turkey
7th
Cambodia
Cambodia
8th
Philippines
Thailand
9th
Thailand
Philippines
10th
Guatemala
Guatemala
Our Supply Chain
Managing the Supply Chain
Consumer
Needs
Product
Design
Product
Development
Consumer
Vendor
Compliance
Raw Material
Sourcing
Retailer
Factory
Sourcing
Wholesaler
Manufacturing
Control
Local
Forwarding
Consolidation
In addition to our sourcing
business, we have been offering
more value-added services to
support our organic growth.
Customs
Clearance
Forwarder
Consolidation
Shipping
Control
Where Do We Need To Go?
What does the future look like?
OPPORTUNITIES
Developed vs Emerging Markets … the game changer
History of World GDP
Where Do We Need To Go?
Developed vs Emerging Markets
Global balance
http://www.economist.com/blogs/dailychart/2011/08/emerging-vs-developed-economies?page=3
Where Do We Need To Go?
History of World GDP
http://www.ritholtz.com/blog/2010/08/history-of-world-gdp/
The Emerging Markets Have In Fact Emerged!
“Made in the world” .… the world is now so integrated that there is no “out” and no
“in” anymore …. So many companies actually see themselves now as citizens of the
world”
Thomas Friedman
“Source everywhere …. Manufacture everywhere Sell everywhere …. The whole
notion of “export” is really disappearing”
Victor Fung
“I always remind people that 96 percent of our potential new customers today live
outside of America”
Michael Dell
Where Do We Need To Go?
CHALLENGES
Traditional threats and obstacles
Inflation
Labour +
Wage Increases
Compliance
Energy
Currency Exchange
Rates
Trade Barriers
Water
Rule of Law
Intellectual
Properties
Government + Political Stability
Climatic
Credit
Speed to Market
Where Do We Need To Go?
Challenges – Summarised
Emergence of global consumerism will increase the complexity of regional and
national consumer safety laws and regulations.
Global trade will become compromised due to these new rules and regulations
from these newly emerging economies.
The US and European consumer markets are no longer the main destinations
for consumer products being sourced.
The growth of Global Brands will depend on the expansion of distribution into
these new emerging consumer markets.
Where Do We Need To Go?
To mitigate the chaos ahead, we must ….
Not look to the past for solutions
Not assume the status quo
Shatter the paradigm of past procurement practices
Must ‘break the cycle’ + collectively + collaboratively.
Create a new sourcing + procurement model.
30 years of deflationary procurement will be replaced by 20-30-40 years of inflationary
procurement!
Consumerism as we have known it is changing and with it so will our respective
business models !
The new frontier, is not about finding the next low cost country (Myanmar-Africa !)
The new frontier German
is about food
us! and
Commodities Law
It’s about real collaboration … process optimization, built on trust!
Breaking the Sourcing Paradigm
The Global Sourcing Paradigm has reached its tipping point – What is the next value equation?
FROM A TRANSACTIONAL TO A TRANSFORMATIONAL MODEL – OPPORTUNITIES FOR MSMEs
Upgrading the value proposition
Newness and Design
PRODUCTION INNOVATION
Product Re-engineering
People & Skills
Fast Tracking / Chase
FLEXIBILITY & LIQUIDITY
VMI Models
Need for Speed: Forecasting / Planning
Low MOQs
Modular Manufacturing
Rationalizing + leveraging vendor base through
consolidation
PROGRESSIVE VENDOR BASE AND
PARTNERSHIPS
Inwards / Outwards Strategy
VALUE ADDED SERVICES
Verticality
Design, PPMC, Tech, Lean Management, Support,
Systematic Integration, EDI Interface with Vendors
Cost Mitigation
Basket / Portfolio Approach
Thank You !