Hong Kong-based Li & Fung is regarded as the market leader in
sourcing consumer goods. Its customer base comprises the leading
retailers in 100 markets across all continents. It has a 100-year
tradition as a trading company, and has gone through different
strategic phases over time. Today, it has established a highly
successful business model which turns the challenges of a complex
and fast changing environment into opportunities. One measure of the
company's success is the growth in its sales and profits. Between 1992
and 2005 its sales increased at a compound annual growth rate of
22% per annum while its net profits rose by an annual 23%.
Li & Fung's main strategic advantage is its ability to manage a large
network of vendors and suppliers across traditional and newly
upcoming sourcing markets in a way which creates significant
efficiencies for the benefit of its customers. The company manages the
flow of raw material and finished goods through a process which it
calls "borderless manufacturing". This concept enables Li & Fung to
meet the requirements of its customers in terms of quality, cost price,
product development and speed to market.
Li & Fung sources about 46% of its apparel and hard goods from
China. In apparel alone, however, Li & Fung's sourcing base is more
diversified. In fact South-East Asia and Bangladesh are as important
as China for Li & Fung when sourcing apparel. Furthermore, rising
costs are likely to make China even less important in the future. | 
