Li & Fung

About us

Li & Fung Today

Global multinational headquartered in Hong Kong Worlds 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: - Fortunes Worlds Most Admired Companies (2013) - The Financial Times FT Global 500 (2009 - 2012) - Forbes Asias Fabulous 50 (2007 - 2010, 2012) - Ranked no. 612 in Forbes Global 2000 (2012) - The Asset Magazines The Asset Corporate Platinum Award (2009-2012) - Mr. Bruce Rockowitz was named Asias Best CEO for the Hong Kong region in 2nd Asian Excellence Recognition Awards and received Asian Corporate Director Recognition Awards by Corporate Governance Asia (2012) Mr. Bruce Rockowitz ranked as one of the worlds 30 best CEOs by Barrons (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 Logistics Offices & DCs Distribution Offices

Trading Office Logistics Office DC Distribution Offices

63 187

62 206

-1 +19

56
306

60
328

+4
+22

Over 300 offices and Trading Offices: 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%
USA Europe China Rest of Asia Canada Australasia Central & Latin America S. Africa & Middle East

19%

Sourcing Trends

Sourcing Trends in 2012

6% Turkey

6% China

3%
Bangladesh

4% India
20% Thailand

20% Vietnam 3% Philippines

14% Guatemala
LFs Top 10 Countries in Production Volume

1% Cambodia

2012
1st China Vietnam Bangladesh Indonesia India Turkey Cambodia Philippines Thailand Guatemala 2nd 3rd 4th 5th 6th 7th 8th 9th 10th

2011
China Bangladesh Vietnam Indonesia India Turkey Cambodia Thailand Philippines Guatemala

8% Indonesia

Our Supply Chain

Managing the Supply Chain

Consumer

Consumer Needs

Product Design Product Development

Vendor Compliance
Raw Material Sourcing

Retailer

Factory Sourcing Wholesaler

Local Forwarding Consolidation Customs Clearance

Manufacturing Control

In addition to our sourcing business, we have been offering more value-added services to support our organic growth.

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 Government + Political Stability Credit Speed to Market Climatic Water Rule of Law

Intellectual Properties

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 Its about real collaboration process optimization, built on trust!

Commodities Law

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 Need for Speed: Forecasting / Planning

VMI Models Low MOQs Modular Manufacturing Rationalizing + leveraging vendor base through consolidation

PROGRESSIVE VENDOR BASE AND PARTNERSHIPS

Inwards / Outwards Strategy

Basket / Portfolio Approach Verticality Design, PPMC, Tech, Lean Management, Support, Systematic Integration, EDI Interface with Vendors

VALUE ADDED SERVICES Cost Mitigation

Thank You !