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Li&Fung: an Internet Issues

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Li & Fung :
Strategic Role of E-Commerce

2006/9/13

ECT 7010 Fundamental of ECommerce Technologies

1

Defensive posture of Li & Fung to the Internet at the beginning “Would the Internet disintermediate us? Would we get Amazoned by someone who will put together all of the information about buyers and factories online?” Answer: The Internet facilitates supply chain management and Li & Fung were not going to be disintermediated Key: have the old economy know-how and yet be open to new economy ideas
2

2006/9/13

ECT 7010 Fundamental of E-Commerce Technologies

Internet Issues
August 2000, beta launch of the new Businessto-business(B2B) e-commerce portal Important issues:
Was there any chance of channel conflict or cannibalization between the offline business and the start-up? How would the market reach to the start-up once it was launched the following year? How specifically would e-commerce ultimately transform his family’s century-old company?
2006/9/13 ECT 7010 Fundamental of E-Commerce Technologies 3

Company Background
2000 – Li & Fung a $2 billion global export trading company 3,600 staff worldwide Sourcing and managing the global supply chain for high-volume, time-sensitive consumer goods Product mix – hard and soft goods
Soft goods – apparel, including woven and knit garments Hard goods – fashion accessories, festive or holiday products, furnishings, giftware, handicrafts, home products, furnishing, home products, fireworks, sporting goods, toys, and travel goods

2006/9/13

ECT 7010 Fundamental of E-Commerce Technologies

4

Product Development

Raw Material Sourcing Fashion Accessories Festive Products Furnishings Garments Giftware Handicrafts Home Products Sporting Goods Toys Travel Goods Export Documentation

Production Planning

Li & Fung Li & Fung Total Total Value-Added Value-Added Package Package

Factory...

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