Li & Fung is a global trading group that sources and manages the supply chain for high-volume, time-sensitive consumer goods. The group is associated with strong brands such as The Limited, Gymboree, American Eagle, Warner Brothers, Bed, Bath & Beyond, Levi-Strauss. With the rise of the Internet and the rise of B2B intermediaries, this note will discuss Li & Fung's e-commerce strategy and how to use the Internet to facilitate supply chain management. Competitive Advantages Li & Fung's product line includes durable and flexible products. Textile goods refer to clothing. Durable goods include fashion accessories, party or holiday products, furniture, gift items, crafts, home products, fireworks, sporting goods, toys and travel items. Durable goods offer higher margins than textile goods because they require higher value-added services. Durable items such as watches, shoes, suitcases, kitchen utensils or teddy bears require an inspector for quality control assessment even for the smallest batch order, greatly increasing what Li & Fung could charge. Margins on textile goods are around 6 to 8%, while those on durable goods vary between 10 and 30%. Li & Fung is trying to expand its sales of durable goods. The group has an extensive global network of more than 48 offices covering approximately 32 countries and territories around the world. The group's network extends beyond Asia and into other markets such as North America, Europe and South Africa. The group sources its supplies from around 10,000 internal suppliers. The global network allows the group to source products from different locations and distribute them to different countries, thereby mitigating its exposure to any particular economy. Its customers have benefited in several ways: supply chain customization could...... middle of paper ... ... brands and reduce their dependence on bigger brands. Additionally, retailers such as Wal-Mart and Target are increasingly offering premium private label products at affordable prices. A huge advantage of private labels is that they can be positioned as a lower cost alternative to national and international brands. The increased demand for private label products offers better margin and would generate more business for the group. The cost of fuel has increased significantly in recent years. This would increase the group's logistics costs and reduce its margins. The discount and department store industry is experiencing increasing consolidation, and consolidation would lead to the formation of stronger and larger entities with greater bargaining power from suppliers, which could adversely affect the margin of Li & Fung.