« Japan Gets China Treatment: Joint Communiqué Unilaterally Changed By Beijing | Home | Japan Shoots Down Missile In Space »
Li & Fung Expanding India Operations
By Paul Midler | December 16, 2007
Li & Fung is looking to double operations in India over the next three years. Today, India accounts for 6% of the revenue. What I wonder is how much of this expansion has to do with rising prices in China.
Even more interesting is that the firm has claimed the expansion will allow the company to leverage the large talent pool of global managers in India. Now, if a Hong Kong company can’t find leadership talent in Mainland China, what does that tell you?
For those who don’t know the company, Li & Fung is one of the largest companies of its kind in the world. Formerly considered a trading company, they do the same thing that outsourcing firms do, but on a much grander scale. They are best known in garments and they have made brand name product for some of the biggest fashion companies in the world. With over 20,000 employees, the firm had reported annual turnover of $10bn last year, and they have offices in over 40 countries.
For more on their business model, I recommend the book, “Competing in a Flat World”, written by Victor Fung, William Fung and Jerry Wind, Professor of Marketing at The Wharton School. The book is available at Amazon.com.
Topics: China |
December 18th, 2007 at 1:08 pm
As highlighted in yesterday’s Wall Street Journal, India has at least two problems as a manufacturing location - restrictive labor laws and a skyrocketing currency*. Companies may locate new plants outside of China, but they may not necessarily locate them in India.
* In the past couple of years, the rupee has gone up 14% vs the dollar, whereas the yuan has only gone up 9%.
December 31st, 2007 at 11:16 pm
yes i do agree at present stage manufacturing of low end products will not pick up in india but value intensive high end products and innvation centres will spur up in india and domestic low end manufacturing will pick up which will eventually in 5-7 years start competing with china head to head.