Li & Fung
Encyclopedia
Li & Fung Limited is a global trading group, based in Hong Kong
, that supplies high-volume, time-sensitive consumer goods. Garments make up around two-thirds of the Li & Fung business which also covers the sourcing of hardgoods such as fashion accessories, furnishings, gifts, handicrafts, home products, promotional merchandise, toys, sporting goods and travel goods.
As a supply chain manager
across many producers and countries, Li & Fung provides product design and development, raw material and factory sourcing, production planning and management, quality assurance and export documentation to shipping consolidation.
(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 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.
from where it co-ordinates the manufacture of goods through a network of 70 offices in 40+ countries. While cost considerations have resulted in the concentration of manufacturing activities in Asia
, recent years have seen an expansion of Li & Fung 's quick-response capabilities in areas like the Mediterranean, Eastern Europe
and Central America
that are closer to customers in Europe and the US. Instead of owning production facilities, Li & Fung manages a large number of independent producers (7500 as at 1998).
Li & Fung is a member of the Li & Fung Group of companies, which also includes privately held retailing
and publicly listed consumer-goods distribution
businesses in Asia such as Toys "R" Us and Circle K
franchises. With an annual turnover of around US$14 billion, Li & Fung (Trading) Limited employs about 15,000 people worldwide.
Control of the company remains focused in the hands of the founder's grandsons, Victor and William Fung, often known simply as ‘the Fung brothers’. Together they own 32% of the publicly traded company, as well as stakes in the private parent company.
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
, that supplies high-volume, time-sensitive consumer goods. Garments make up around two-thirds of the Li & Fung business which also covers the sourcing of hardgoods such as fashion accessories, furnishings, gifts, handicrafts, home products, promotional merchandise, toys, sporting goods and travel goods.
As a supply chain manager
Supply chain management
Supply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers...
across many producers and countries, Li & Fung provides product design and development, raw material and factory sourcing, production planning and management, quality assurance and export documentation to shipping consolidation.
History
The company was co-founded in 1906 by Fung Pak-liu, using capital saved from his job teaching English, and partner Mr Li. Based in GuangzhouGuangzhou
Guangzhou , known historically as Canton or Kwangchow, is the capital and largest city of the Guangdong province in the People's Republic of China. Located in southern China on the Pearl River, about north-northwest of Hong Kong, Guangzhou is a key national transportation hub and trading port...
(Canton), it was then an export trading operation, dealing in porcelain
Porcelain
Porcelain is a ceramic material made by heating raw materials, generally including clay in the form of kaolin, in a kiln to temperatures between and...
, fireworks
Fireworks
Fireworks are a class of explosive pyrotechnic devices used for aesthetic and entertainment purposes. The most common use of a firework is as part of a fireworks display. A fireworks event is a display of the effects produced by firework devices...
, jade
Jade
Jade is an ornamental stone.The term jade is applied to two different metamorphic rocks that are made up of different silicate minerals:...
handicrafts and silk
Silk
Silk is a natural protein fiber, some forms of which can be woven into textiles. The best-known type of silk is obtained from the cocoons of the larvae of the mulberry silkworm Bombyx mori reared in captivity...
, mainly to the United States.
In 1937 the firm incorporated in Hong Kong to take advantage of the British colony's oceangoing ships. After World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, 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
William Fung
Dr. William Fung Kwok Lun, BSE, OBE, JP is a Hong Kong entrepreneur who is the group managing director of Li & Fung Group, one of the largest trading companies in Hong Kong, as well as an alumnus and trustee of Princeton University. He is the younger brother of Dr. Victor Fung Kwok King, the...
and Victor
Victor Fung
Victor Fung Kwok-king , GBS , is the Group Chairman of Li & Fung group of companies. Together with his brother William, he owns a controlling stake of 32% in the business, which was founded by his grandfather....
. 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.
The business today
Li & Fung is headquartered in Hong KongHong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
from where it co-ordinates the manufacture of goods through a network of 70 offices in 40+ countries. While cost considerations have resulted in the concentration of manufacturing activities in Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...
, recent years have seen an expansion of Li & Fung 's quick-response capabilities in areas like the Mediterranean, Eastern Europe
Eastern Europe
Eastern Europe is the eastern part of Europe. The term has widely disparate geopolitical, geographical, cultural and socioeconomic readings, which makes it highly context-dependent and even volatile, and there are "almost as many definitions of Eastern Europe as there are scholars of the region"...
and Central America
Central America
Central America is the central geographic region of the Americas. It is the southernmost, isthmian portion of the North American continent, which connects with South America on the southeast. When considered part of the unified continental model, it is considered a subcontinent...
that are closer to customers in Europe and the US. Instead of owning production facilities, Li & Fung manages a large number of independent producers (7500 as at 1998).
Li & Fung is a member of the Li & Fung Group of companies, which also includes privately held retailing
Retailing
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
and publicly listed consumer-goods distribution
Distribution (business)
Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
businesses in Asia such as Toys "R" Us and Circle K
Circle K
Circle K is an international chain of convenience stores, founded in 1951, in El Paso, Texas, United States. It is owned and operated by the Canadian-based Alimentation Couche-Tard.-Overview:...
franchises. With an annual turnover of around US$14 billion, Li & Fung (Trading) Limited employs about 15,000 people worldwide.
Control of the company remains focused in the hands of the founder's grandsons, Victor and William Fung, often known simply as ‘the Fung brothers’. Together they own 32% of the publicly traded company, as well as stakes in the private parent company.