Online shopping giant JD.com invests US$100 million for a stake in one of the world’s oldest and largest supply chain managers
- As part of the agreement, JD.com, Li & Fung will partner on private-label initiatives for the Chinese domestic market
- Fung family will retain control of the company with 60 per cent of its voting rights
Chinese e-commerce giant JD.com has bought a stake in the century-old supply chain manager Li & Fung, in a strategic partnership that marries 21st century digital technology with one of the world’s largest logistics and supply chain networks.
The investment also will help accelerate the development of the 114-year-old company’s end-to-end digital supply chain, known as the “supply chain of the future”, by partnering with JD.com, Li & Fung said.
How Chinese e-commerce giant JD.com is keeping employees safe during Covid-19 pandemic
JD.com’s alliance with Li & Fung comes at a difficult time for the supply chain manager, whose fortune over more than a century had been intricately connected with Hong Kong’s geopolitical role as the midway stop between China and the rest of the world.
Li & Fung, which began as a two-person start-up in the Guangdong provincial capital of Guangzhou in southern China, initially focused on trading porcelain and silk from China. It employs about 17,000 people in more than 230 offices around the world and operates distribution centres across 40 different markets.
Li & Fung worked for years to digitise its supply chain management process as it saw its core customer base – bricks-and-mortar retailers – hit hard by the rise of online shopping and slowing economic growth in recent years.
The company said the JD.com alliance “fits well” with its goal of digitising its supply chain management process, given the tech giant has developed its own “proprietary supply chain technologies” and “created digital retail and supply chain platforms that are fully integrated to support its omnichannel strategies”.