Li & Fung is a global business group that purchases and manages the supply chain of 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 advent of the Internet and the prosperity of B2B intermediaries, this memo 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 mix includes hard and soft goods. Textile goods refer to clothing. Durable goods include fashion accessories, holiday or festive products, furniture, gifts, crafts, household products, fireworks, sporting goods, toys and travel items. Durable goods provide higher margins than soft goods because they require higher value-added services. Durable goods items such as watches, shoes, suitcases, kitchen utensils or teddy bears require an inspector for quality control assessment even for smaller batch orders, thus significantly increasing the price Li & Fung may charge. Margins for textile goods range from approximately 6% to 8%, while margins for durable goods range from 10% to 30%. Li & Fung seeks 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 worldwide. The group's network extends outside Asia and into other markets such as North America, Europe and South Africa. The group sources its supplies from approximately 10,000 internal supplies. The global network allows the group to source its products from various locations and distribute them in different countries, mitigating its exposure to any particular economy. Its customers have benefited in several ways: supply chain customization could be... middle of paper... ... brands and reducing their dependence on larger brands. Additionally, retailers like 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 low-cost alternative to national and international brands. Increased demand for private label products provides a better margin and would generate more business for the group. The cost of fuel has increased significantly in recent years. It would increase logistics costs for the group and reduce its margins. The discount retail and department store industry is experiencing increasing consolidation, and consolidation would lead to the formation of stronger and larger entities, exerting greater bargaining power from suppliers which could affect Li & Fung's margin.