Hong Kong-based consumer goods procurement and logistics company Li & Fung warned that "a new era of price increases for procurement" has arrived, and manufacturing companies have passed the cost of the ever-increasing raw materials and Chinese labor to customers.
The supply chain company announced on Thursday that profit in 2010 rose by 27% to 4.28 billion Hong Kong dollars (US$550 million). Li & Fung supplies companies such as Walmart (Walm Art) and Gap of the United States, and Debenham of the United Kingdom.
Le Yumin, president of Li & Fung's trading company, said: "In this industry, the biggest topic in everyone's mind is: The price increase is indeed a foregone conclusion. At the moment, retailers are not sure which ones can be passed on to consumers and which ones are not. ."
Feng Guolun, managing director of Li & Fung Group, said that the intensification of labor competition in China has led to an increase of about 20% in wages this year. For the world economy, this indicates the end of China-led deflation.
The rise in labor costs in China has prompted Li & Fung to relocate the production of labor-intensive goods such as clothing to countries with lower wages, such as Bangladesh, Vietnam and Indonesia.
It is reported that currently Lifan's apparel purchasing business, China's share is only 25%. Le Yumin said that the proportion of Bangladesh and Vietnam in their apparel business is rapidly increasing. Despite this, due to a series of acquisition transactions last year, China's share of Li & Fung's total purchases increased from 54% in 2009 to 57% in 2010.
[According to the "Financial Times" article comprehensive analysis and analysis]
The supply chain company announced on Thursday that profit in 2010 rose by 27% to 4.28 billion Hong Kong dollars (US$550 million). Li & Fung supplies companies such as Walmart (Walm Art) and Gap of the United States, and Debenham of the United Kingdom.
Le Yumin, president of Li & Fung's trading company, said: "In this industry, the biggest topic in everyone's mind is: The price increase is indeed a foregone conclusion. At the moment, retailers are not sure which ones can be passed on to consumers and which ones are not. ."
Feng Guolun, managing director of Li & Fung Group, said that the intensification of labor competition in China has led to an increase of about 20% in wages this year. For the world economy, this indicates the end of China-led deflation.
The rise in labor costs in China has prompted Li & Fung to relocate the production of labor-intensive goods such as clothing to countries with lower wages, such as Bangladesh, Vietnam and Indonesia.
It is reported that currently Lifan's apparel purchasing business, China's share is only 25%. Le Yumin said that the proportion of Bangladesh and Vietnam in their apparel business is rapidly increasing. Despite this, due to a series of acquisition transactions last year, China's share of Li & Fung's total purchases increased from 54% in 2009 to 57% in 2010.
[According to the "Financial Times" article comprehensive analysis and analysis]
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