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Li & Fung Expanding India Operations

December 16th, 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.

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