Li & Fung Ltd. history, profile and history video
Li & Fung Ltd. is an investment holding company, which engages in the consumer goods design, development, sourcing and distribution. The company specializes in supply chain management of high-volume, time-sensitive goods for leading retailers and brands worldwide via an extensive global network. It provides sophisticated, one-stop-shop supply chain solutions to meet customer’s specific needs. The company operates through three segments: Trading Network, Logistics Network and Distribution Network. The Trading Network segment focuses on the global sourcing business and provides sourcing solutions that cover garments and apparel and non-apparel products such as toys, home furnishings, sporting goods, footwear’s and health and beauty products. The Logistics Network segment provides domestic logistics services and renders solutions such as warehousing, transport, repacking, customs brokerage, freight forwarding, and other value added services which include supply chain analytics and value engineering work. The Distribution Network segment operates the onshore distribution businesses in the United States, Pan-European and Asian regions. Li & Fung was founded in 1991 and is headquartered in Hong Kong.“
“Li & Fung History
The company was co-founded in 1906 by Fung Pak-liu (d. 1943), a school teacher using capital saved from his job teaching English, and partner Li To-ming, local merchant whose family owned a porcelain shop. Li eventually sold his share in 1946, leaving the company in the hands of the Fung family.
Based in Guangzhou (Canton), it was then an export trading operation, dealing in porcelain, fireworks, jade handicrafts and silk, mainly to the United States.
In 1937 the firm incorporated in Hong Kong by Fung’s son Fung Hon-chu to take advantage of the British colony’s oceangoing ships. After World War II, China closed for international business and the company refocused as an exporter of Hong Kong manufactured goods.It was now led by Fung Hon-chu, son of the founder and father of the present controlling brothers, William and Victor. Li & Fung became a big exporter of garments, toys, wigs and plastic flowers.
William and Victor Fung were educated in the US and followed business careers there, before returning to join the family business in the early 1970s, as Li & Fung’s broker role was being squeezed by both manufacturers and importers. They remade the company to provide value-added services in manufacturing, sourcing throughout Asia, including going back into re-emergent China.
Later, sources from countries closer to target markets were sought out: Mexico, Honduras and Guatemala, for the US; Turkey, Egypt and Tunisia for Europe.
Li & Fung Ltd. went public on the Hong Kong Stock Exchange in 1992. Then the firm nearly tripled its size with the HK$475 million acquisition of Inchcape Buying Services (formerly known as Dodwell & Co.) in 1995. It was part of Inchcape plc, a British trading company with a network of offices in India, Pakistan, Bangladesh, and Sri Lanka. The acquisition of Inchcape Buying Services, with its European customer base and sourcing points across the Indian subcontinent, balanced Li & Fung’s American customer base and East Asian sourcing network.
In his chapter entitled Li & Fung, Ltd.: An agent of global production (2001), Cheng used Li & Fung Ltd. as a case study in the international production fragmentation trade theory through which producers in different countries are allocated a specialized slice or segment of the value chain of the global production. Allocations are determined based on “technical feasibility” and the ability to keep the lowest final price possible for each product. In 1995 Li & Fung, following its acquisition of an established British trading company, Inchcape Buying Services, expanded its customer network in Europe and its producer network in South Asia, including Bangladesh, India, Pakistan, and Sri Lanka.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “E417ASA“