III
Investigation of Hong Kong Fashion Marketing in Ethical Ways
Nottingham Trent University School of Art & Design Institute of Vocational Education – Hong Kong
ba
ifb
2018 / 2019
Module: FASHION CONCEPT AND INNOVATION PROJECT Module reference: FASH30006
IVE
Module Leader: CHAN, Marco
Module Name Declaration This submission is the result of my own work.
All help and
advice other than that received from tutors has been acknowledged
and
primary
and
secondary
sources
action should be taken in line with the University’s regulation on assessment contained in its handbook.
of
information have been properly attributed.
I confirm that this work has gained ethical approval and that I have faithfully observed the terms of the approval in the
Should this statement prove to be untrue, I recognise the
conduct of this project.
right and duty of the Board of Examiners to recommend what
Signed ______________________________ (Full Name) WONG Sau Laam
Date 24/04/2019 (Word Count:___5,741____)
A fail or a success marketing practice always holds the life of a brand, or we said consumers and the public always hold the life of a brand since human is the soul of marketing. To avoid failure, enterprise have to pay a lot of attention to the ways the brands promoting themselves. This study aims to investigate Hong Kong Fashion Marketing in Ethical Ways. Li & Fung Groups, an enterprise which built-up based in Hong Kong over 100 years, one of the biggest export trade company and one of the biggest integrated enterprise company supply consumers good including garment, fashion accessories and sports goods etc. Since the start of the business, Li & Fung Groups has taken care of Corporate social responsibility. However, the company business is turning down and suffering from liabilities since the past 10 years.
The rise of create shared value due to the singleway of cooperate social responsibility. The problem is that CSR is one-way and the donation is high. CSR projects are generally financed by long-term financial subsidies. Promoting a partner, interactive and sustainable society today may not be the most effective. Therefore, in order to make the situation be smoothen, this project aims to investigate the company’s cooperate social responsibility and to see the possible ways for further improvements. Also, another objective is to find out the opportunities for Li & Fung to build up Creating Shared Value for the future developments. Understanding that marketing is an important channel for company to promote their message to consumers. In order to find out the opportunities and possibilities of ethical marketing in Hong Kong, case studies, desktop research and primary research will be conducted and the result will be revealed in this project.
Ethical marketing refers to a marketing strategy in which companies follow high ethical standards and pass ethics as their own value to consumers . Enterprises to develop ethical marketing strategies and implement ethical marketing can protect consumers and social interests , meet the requirements of social development, form marketing competitiveness based on moral values , and ultimately achieve sustainable development. On the surface, marketing is an activity of selling product and promoting brands. Actually, human is the main body. If a brand want to consider how to make the brand development in a more ethical way, the company may ought to think about the combination between consumers’ needs and the social value before the selling of the products. How a company are doing ethical business, how a consumers evaluate the brand. In recent years, more and more consumers’ purchasing decision are not only made by the products and services it owns, but also considering the company background, corporate social responsibility (CSR) and public relationship (PR). Consumers are now pay more attention to the motivation of the company behind to see whether the company are really doing the honest “Green Issue”.
In Hong Kong, government and society pay attention to environmental protection and human welfare which result in more and more fashion brands promote sustainability in a more ethical way. Investigating a better quality of ethical marketing would be a new challenge for Hong Kong fashion brands to promote their brand image positively. Marketing, especially in Hong Kong, is one of the most significant way for the brands to present message to their consumers and to the public. Moreover, Hong Kong society pays attention to corporate social responsibility(CSR) in recent 10 years. The development of ethical marketing grows rapidly in order to catch the trend. Corporate social responsibility have been developed since 1960s in Hong Kong. This could be a bit single way to some enterprise so that a new idea is being created in order to grasp the changing of society and related stakeholders’ needs. The concept is named as “Creating Shared Value� (CSV).
The problem is that CSR is one-way and the donation is high. CSR projects are generally financed by long-term financial subsidies. Promoting a partner, interactive and sustainable society today may not be the most effective. The latest rise is CSV, proposed by two Harvard scholars Michael Porter and Mark Kramer, who believe that corporate social projects also need a business case to create value for a long time. This concept has been widely adopted by European and American companies in recent years. One of the best examples is the telecom giant Vodafone, which cooperates with STTO in Africa to engage in online banking services in Africa, solving the problem of lack of banking services for farmers.
In the past hundred years of history, Li & Fung has had three difficulties and turned risks into opportunities. Today, Li &
Li & Fung Groups, an enterprise which built-up based in Hong Kong over 100 years, one of the biggest export trade company and one of the biggest integrated enterprise company supply consumers good including garment, fashion accessories and sports goods etc. Since the start of the business, Li & Fung Groups has taken care of Corporate social responsibility. However, the company business is turning down and suffering from liabilities since the past 10 years.
Fung is getting deeper and deeper in the dilemma. Some analysts believe that although Li & Fung strives to embrace change, the world has become faster than it. Behind the rise and fall of Li & Fung is the industry and historical commonality. Apart from environmental protection, culture conservation is also one of the important issue that fashion industry has to consider more about how to inherit the characteristic of Hong Kong fashion culture. The Mills is a successful example of culture conservation, a way of Creating Shared Value. In the past, The Mills was called Nan Fung Cotton Mills was completed in 2018. Nan Fung Cotton Mills was set up in 1954 in Tsuen Wan which was the largest production of textile factory in Hong Kong. The factory closed in 2008 after the operation stopped. 2014 was the 60th anniversary of Nan Fung groups, Nan Fung Groups decided to revamp the textile factory as a creation area for the culture and art learning. (The Mills, 2019)
Due to the current cases to Li & Fung, with the aim of solving the problems that suffering to the enterprise, this problem aims to pay attention to how Li & Fung get closer with their stakeholders including the customers and the society. Moreover, this project aims to focus on Li & Fung Group. Investigating the company’s cooperate social responsibility and to see the possible ways for further improvements. Another objective is to find out the opportunities for Li & Fung to build up Creating Shared Value for the future developments. Also, understanding that marketing is an important channel for company to promote their message to consumers, consumers’ opinions and experiences are considered for the recommendation and limitation. Base on the research finding in stage 2 and the further study on Li & Fung to discover a better ethical marketing practice for the selecting enterprise.
Company follow high ethical standards and pass ethics as their own value to consumers . Enterprises develop ethical marketing strategies and implement ethical marketing can protect consumers and social interests , meet the requirements of social development, form marketing competitiveness based on moral values , and ultimately achieve sustainable development. According to HKEX (2018), corporate social responsibility can be divided into two-types, one is Reactive Corporate Social Responsibility , another is Strategic Corporate Social Responsibility. Reactive Corporate Social Responsibility has two forms. The first one is being a good citizen , do caring about the changes in society that all the stakeholders concerns about. Another one is to reduce the negative impacts that have already occurred or may be generated by business operations.
To fulfill Strategic Corporate Social Responsibility, implement a good citizenship and smoothen the hurts that production made are not enough. Enterprise have to consider some initiatives that can produce significant social and business benefits. Strategic Corporate Social Responsibility includes both internal and external dimensions. Internal and external complement each other with the aim of creating shared values. Strategic corporate social responsibility also includes investing in social factors that promote the competitiveness of enterprises in the competitive environment. Thus, establishing a symbiotic relationship between enterprises and society.
In the new business era, business purpose must be redefined as creating shared value , rather than the pursuit of profit . Since the market is not only the general economic needs , but also have to concern the social needs . For companies which want to have a longer and continuous development, they have to consider how to reconnect company achievements with social progress. Share value is not personal values of the problem, not "share" value, shared values in pursuit of expanding large economy with a total value of society.
In general, the best opportunities for companies to create shared value are necessarily closely related to their business and are the most important areas of their business. This kind of opportunity can contribute the most economic benefits to the company, so the company can invest in it for a long time. In this opportunity, the enterprise through its business scale and market influence so that enterprises have the ability to help solve specific social problems , indicating goodness of one kind gesture.
In this stage, with regard to the primary research method be used for collecting the data with the topic, e-mail consultation to the selecting enterprise will be conducted for further studies and references. On the other hand, in order to get a deeper understanding to cooperate social responsibility and created shared value in Hong Kong, another e-mail consultation will be conducted by asking non-government organization(NGO). The aim is to know how NGO see CSR and CSV to the fashion industry. Also, through the e-mail consultation, it is hoped that NGO may explain more about why CSR and CSV is so important to Hong Kong fashion industry. In the case of studying more about creating shared value, another field trip to The Mills is going to be done in this stage.
Li & Fung Li & Fung is a Hong Kong based supply chain manage company. Also, it is one of the biggest export trade company and one of the biggest integrated enterprise company supply consumers good including garment, fashion accessories and sports goods etc. Li & Fung was established by Fung Pak-liu and Li To-ming since 1906.
Global Brands Group Global Brands Group Holding Limited is a branded apparel and fashion accessories company which owned by Li & Fung. Global Brands Group mainly provides kids, men and women fashion from overseas fashion brand. The international brands which under Global Brands Group are Tommy Hilfiger, Calvin Klein and Under Armour. Global Brands Group also own the license of Disney and Sanrio characters which provide kids goods the most. (Global Brands Group, 2018) In 2007, Li & Fung using 1.9 billion acquired Tommy Hilfiger global procurement business. It is one of the biggest acquisition done by Li & Fung. Then, in 2017, PVH corp., the parents company of Tommy Hilfiger and Calvin Klein announced that PVH corp. and Li & Fung has achieved a cooperate agreement about the new supply chain in the future. According to the new agreement, Li & Fung will apply new technology support and professional knowledge to PVH corp.
Speed Li & Fung sees “Speed” as the most crucial condition about the 3-year plan because the company thinks that keeping competitiveness is Fung’s Group has recognized that the world and the society keep changing day by day. According to Fung’s Group, the company stated that nowadays customers are always close to each other like communicating with one another on the Internet and social media. Also, the customers are time-critical and experience-driven. Last but not least, one of the most important point is customers are demanding something which is high transparency and sustainability. In order to have a better, faster and more creative interaction with the customers,
one of the soul to Li & Fung so that they can have certain stability with their customers. Shorten the product life cycles and speed up the product releasing into the market. Bringing decision-making closer to the listing time, enabling customers to create trending products that are eventually satisfied and marketed by
the company has released a 3-year plan from 2017 to 2019. Li & Fung set the 3-year plan vision as simple and bold they are: Creating a future supply chain so as to help their clients to control the digital economy. With the aim of achieving these goals, Li & Fung focuses on Speed, Innovation and Digitalization of the future Supply Chain.
the final consumers. The ability to accelerate speed and profitability is an important part of Li & Fung business transformation. Li & Fung are using new and innovative technology in order to access an agile workforce that can operate efficiently and drive innovation through projects and new ways of working. Data-driven insight, improving the process, increasing the transparency and reorganizing the working space are the key of success.
Digitalization Practicing the full digitalization for the future supply chain is an integral part of Li & Fung's ability to improve its operational speed and innovation. From product development, material costing, sample production, to product production and delivery, Li & Fung are committed to digitizing all major processes in the supply chain.
Innovation
This point-to-point platform will make the customer's processes smoother, more efficient and more costeffective. It will also enable the company to provide data-driven market insights and tailored services to major
Li & Fung will be committed to providing innovative solutions to help customers respond to the changing needs of consumers. These
brands and retailers.
solutions will allow customers to get the most value from their supply chain, and superior products will also delight their customers. Li & Fung not only integrates innovation into products and services, but also integrates innovation into its operating model, including working with customers and other partners in the supply chain
of the supply chain, Li & Fung will not only speed up the market for customers to launch products, help them
ecosystem to achieve an open and innovative culture of innovation and cooperation.
Spencer Fung, the Group Chief Executive Officer said that by focusing on speed, innovation and digitalization save costs, but also reduce the pressure of price reduction promotion by providing better products. This strategy will also help us to provide data-driven market trends, which will enable our customers to make better business decisions, increase productivity and improve cash flow, and the efficiency of the company can be improved. In addition, Li & Fung foster innovation internally. Also, the culture of cooperation will strongly promote the cooperation of staff to test various new ideas, which will help us grasp new business opportunities and promote revenue growth. As part of a continually streamlined business plan and the first step in implementing the new 3-year business development plan, Li & Fung announced that it will be reorganized into two departments, Services and
To this end, Li & Fung will focus on innovative cooperation methods, new product cooperation and new business models to provide supply chain solutions for customers and suppliers. This
Products.
measure is expected to achieve long-term growth throughout the 3-year business development plan.
solutions for existing and targeted customers and to provide products that are both unique and innovative.
Li & Fung expects that the two operational priorities will be able to plan for future growth more autonomously, making the company more efficient and productive. In addition, this will enable the company to create better
Fung also mentioned that the next three years will be one of the most promising periods to Li & Fung. Li & Fung is united and focused on continuous transformation and expansion of business. Li & Fung is actively implementing plans to promote the digitalization of supply chains and create an ecosystem that benefits all stakeholders. Li & Fung convinces that these strategic initiatives and business restructuring will help our business achieve long-term success and enable us to continue our leadership in the global supply chain.
Fig.1 Spencer Fung
Fig.2 Darren Palfrey
Community Li & Fung recognizes that the success of the group depends on the sustainability of the communities in which we operate. As a result, the Group's businesses and our foundations drive colleagues to plan and participate in a variety of community investments and engagement projects to achieve our vision of creating a better life for the billion people covered in the supply chain. Victor and William Fung Foundation The Victor and William Fung Foundation promotes leadership development and thought leadership through partnerships with universities, think tanks and tertiary educational institutions. Its objective is to invest in social development to educate and develop young people. Li & Fung Foundation Li & Fung's corporate Foundation is dedicated to supporting its employees to volunteer their time and skills in communities throughout its global operations and along the supply chain. Fung Alumni Network Through the Fung Alumni Network, we foster a long-term relationship with former colleagues by maintaining a vibrant and active alumni community.
Human Right Environment Li & Fung has incorporated pollution prevention principles and management and implementation environmental responsibility programs into their operations and supply chains. They has also taken a series of measures in order to reduce the impact of business on global climate change. Li & Fung implement cloud-based environment management systems in our listed companies to track and manage energy, water and paper consumption and greenhouse gas emissions. We are expanding the system to track data on scrap and recyclable materials and require other companies within the group to implement the system.
Li & Fung launched the Global Diversity and Inclusion Project to strengthen their respect to diverse and diverse corporate culture. Li & Fung aims to create a collaborative work and learning environment with education and awareness of inclusiveness. As a global company, Li & Fung understands and embraces diversity and operate their business from a diverse perspective. In addition, to implement relevant compliance and remediation procedures for preventing and opposing all forms of forced labor, Li & Fung also works with The Mekong Club, a non-profit organization dedicated to support private companies to combat modern slavery. In 2017, Li & Fung promoted the development of a new remedy tool and signed the “The Business Pledge against Modern Day Slavery�.
Fig.3 Li & Fung’s collaborators which focusing on social responsibility
Li & Fung, which has been deteriorating in recent years , has reduced its staff in Hong Kong by more than 900 in the past year. However, Chief Executive Officer Spender Fung stressed at the performance meeting that the reduction of staff in Hong Kong was mainly due to the sale of Asian distribution business during the period. It emphasizes that the group has never had a layoff plan, and the natural wastage rate of employees has been similar to that of the industry, about 10%.
Fung said that although the retail environment is better than last year, many retail outlets continue to close down and the Group is still relatively cautious about the overall operating environment. In order to save the performance, Li & Fung
In fact, Li & Fung suffered another setback in net profit this year.
once again announced a new "3-year plan" and an additional investment of 150
Last year, it earned 24.4% to 261 million U.S dollar. The core operating profit also fell 19.6% to 412 million U.S dollar, with a final dividend of 12 Hong Kong cents.
million yuan to develop digitalization. Fung said that he is confident that the core operating profit will have low double-digit growth in 2019 and its profit. The rate is also expected to increase by 0.5 percentage points. In addition, Fung also said that the future dividend policy will be changed to factors such as profit and cash flow. Looking back on the North American market where Li & Fung's main customers gathered in 2017 and 2018, the number of retail outlets closing and the number of bankrupt companies have increased. While Li & Fung continues to divest assets, it is also difficult to prevent the decline in core earnings and recorded two consecutive losses.
On the other hand, this project was originally decided to ask Li &Fung about whether the company has any current activities about promoting fashion ethic or ethical marketing for further studies on this project. Also, by In 2018, Li & Fung's turnover also recorded a 6.2% decline, from $13,544.2 million to $12,707.0 million. Based on the 3-year plan, in 2018, Li & Fung launched a large-scale restructuring
asking Li & Fung how they think about Creating Shared, whether Li & Fung have any planning about Creating Shared Value currently.
plan to change the previously transparent, slow-responding vertical architecture to a customer-centric architecture, while appointing senior management. The purpose of the restructuring includes the formation of a customer-focused management team to strengthen customer relationships; procurement and production platforms to achieve operational excellence; and accelerated digitalization. The customer management team organizes special operations teams based on customer groups and product categories to centralize services and increase the market share of existing brands and retail customers. The procurement and production platform was transformed from an operation group to a regional or national center which was led by the chief operating officer of the group in October last year. The chief operating officer is mainly responsible for disintegrating the internal division of the group and establishing it around the world. A procurement and production platform with operational excellence. The group also appointed a chief digital director, Darren Palfrey in January this year to accelerate the company's digital construction.
Unfortunately, until the project is start, Li & Fung did not have any reply though the e-mail. In addition, no any articles or resources that are reflecting that Li & Fung currently is promoting fashion ethic or ethical marketing. On the other hand, As a result, it can only be assumed that Li & Fung
Fig.4 Some people may think that the concept of CSV is too "off the ground" and difficult to practice, but looking at the world, many international companies have already played it to the fullest. For example, Novartis AG in Switzerland provides cheaper drugs to poor people in developing countries such as Bangladesh and India, and is committed to promoting health education, training health care workers and improving other social problems. As a result, the project succeeded in achieving break-even within 30 months, which helped Novartis establish its reputation and influence in the local area and succeeded in exploring new markets after doing good deeds, reflecting the spirit of shared value.
As for Hong Kong, the development of CSV is still in its infancy. In recent years, under the impetus of the "The Social Innovation and Entrepreneurship Development Fund" (SIE Fund) established by the Government, it has achieved good results and gradually attracted the attention of enterprises. However, to further spread the CSV in Hong Kong, Hong Kong have to create more successful stories. To cite an example, SIE Fund partnered with an outdoor brand Protrek last year for opening a new concept store "CITY.WITH.OUT.DOOR" in Causeway Bay. Most of the outdoor products sold in store were made by environmentally friendly and recycled materials. Moreover, they regularly launched outdoor activities such as mountain hiking are held for the disadvantaged groups in the society, giving them the opportunity to kiss nature. This allows Protrek for creating a new business opportunities on the one hand and re-awake the brand's mission to society on the other. Fig.5
Another huge successful enterprise that practicing a good demonstration is The Mills, formally called Nan Fung Cotton Mills was completed in 2018. Nan Fung Cotton Mills was set up in 1954 in Tsuen Wan which was the largest production of textile factory in Hong Kong. The factory closed in 2008 after the operation stopped. 2014 was the 60th anniversary of Nan Fung groups, Nan Fung Groups decided to revamp the textile factory as a creation area for the culture and art learning. (The Mills, 2019) After four years, after the completion of the activation project in 2018, it will be divided into "The Mills Fabrica", "Centre of Heritage Art & Textile" and "The Mills Shopfloor".
The Mills is mainly focus on Culture conservation and Education. The Mills is revamp for the textile factory as a creation area for the culture and art learning. In order to reach the meaning of conservation, the culture and the history of the factory have been kept it well. In regards of sustainable development of fashion industry and a brand, conservation is crucial. Although Nan Fung Cotton Mills has already stop the operation, the culture, the characteristic and the body are still being saved because of the well conservation. The entire activating conservation project has been done quite well. In addition to retaining old objects and injecting new elements, the entire ecosystem is closely linked to the history of textiles and innovative creative art, introducing commercial elements without conflict. The Centre for Heritage, Arts and Textile will hold a series of textile-related activities, including the “Apron Project� in the Community Learning Programme in Tsuen Wan, and a series of exhibitions to explore textile art and life. Fig. 6 Fabrica
The Mills
As definition has stated that Ethical Marketing refers to a marketing strategy in which companies follow high ethical standards and pass ethics as their own value to consumers . Enterprises to develop ethical marketing strategies and implement ethical marketing can protect consumers and social interests , meet the requirements of social development, form marketing competitiveness based on moral values , and ultimately achieve sustainable development. Obviously, The Mills done quite successful of promoting Ethical Marketing and shown certain brand value to the public.After visiting The Mills, it was a place where Hong Kong unique fashion culture, the past operation of the system are still being protected by the owners. In the perspective of ethical marketing, it is no doubt The Mills are presenting a positive practice, a good demonstration to the society.
Fig.7
Fig.8
Fig.9
Fig.10
After all the literature reviews, case studies and primary researches were studied in the past stages and this stage, the possibilities for Li & Fung considering the development of CSV can be drafted out. Li & Fung puts strong effort on CSR in order to implement a good citizenship and smoothen the hurts due to the production. Li & Fung is committed to produce significant social and business benefits. Both internal and external dimensions complement each other with the aim of creating the shared values for different stakeholder including the customers and society who engaged in or affected by the supply chain. Strategic corporate social responsibility also includes investing in social factors that promote the competitiveness of enterprises in the competitive environment. Thus, establishing a symbiotic relationship between enterprises and society. In order to have a long-lasting business in Hong Kong, it is recommended that Li & Fung can consider the below suggestion for further investigation and development.
Fig.11
B. Strengthen the relationship between Author’s owned
company, customers and the partners The advancement of technology has made information more and more transparent. Retailers and brands have skipped the middlemen, and the difficulty of directly cooperating with factories has been greatly reduced. The middlemen represented by Li & Fung have been marginalized. The problem is that Li & Fung do not have strong willingness for extra innovative development and the ability for promote innovation is insufficient too. The talent shortage, the R&D investment is small; the innovation of the enterprise management mode needs to be strengthened. Li & Fung has mentioned the customers and the final consumers in their 3-year plan. They recognizes that nowadays consumers are time-critical and experience-driven. Last but not least, one of the most important point is customers are demanding something which is high transparency and sustainability. Nowadays, not only experiential retail is needed for enterprise to promote the brands to consumers, but also have to think about experiential marketing for both clients and ultimate consumers. Li & Fung through Acquisition action takes competitors under their wings so as to larger and widen their business. In nowadays Hong Kong society, stakeholders pay more attention on the shared value, how the business can be bigger and the profit be larger under the policy of sharing.
For example, Li & Fung replaces the ways of acquisitions by adopting more cooperation in the future, making the business model more digital. Seeking extra cooperation opportunities in beauty products and furniture. Once Li & Fung adopt the way by cooperating with other companies, it is believed that the profit of the company can be expanded and the resources can be integrated. To make the situation be smoothen, Li & Fung first have to think about how to give confidence and a sense of peace to their customers and partners. Moreover, in order to maximize the profits, it is necessary for Li & Fung to consider the shared value between the company and their partners. Now, one of the suggestion is to provide solution for retailers and brand who may not have a strong recognition about products and supply chains. What business model do those retailers and brand want and how Li & Fung can help? The company can also use this approach with larger customers in the future together. The past approach may be in single way only. Solution provided by Li & Fung and the receiving party accept the solution. Therefore, in order to reach the goals of create shared value between the company and the partners, Li & Fung may need to go forward more.
Fig.12
Fig.13
A. Promoting the History of Li & Fung Li & Fung Groups, an enterprise which built-up based in Hong Kong over 100 years, one of the biggest export trade company and one of the biggest integrated enterprise company supply consumers good including garment, fashion accessories and sports goods etc. With this special and uniqueness of the brand, it is suggested that Li & Fung can see The Mills as an example that culture conservation is also a good way to promoting the brand. The reason why The Mills is popular in Nowadays Hong Kong is they catches the trend in Hong Kong. The entire activating conservation project has been done quite well. In addition to retaining old objects and injecting new elements, the entire ecosystem is closely linked to the history of textiles and innovative creative art, introducing commercial elements without conflict.
Fig.14 Li & Fung’s business covers global supply chain management across the global consumer goods market, including procurement, logistics, distribution and retail. Being one of the biggest enterprise in Hong Kong and having such strong history of the brand, Li & Fung have to make a giant change. Otherwise, the world and the industry is changing too fast as a result Li & Fung will get elimination. Spencer Fung has mentioned in 2016 on the annual results announcement conference. He said that the mindset of the company’s 22,000 staff have to be changed so as to reach the goals of the company. (SCMP,2017) As a result, the employees also hold the destiny of the company because the staff are also acting an important characters in the supply chain. As Fung said that the mindset of the employees may need to be adjusted, it is recommended that Li & Fung’s staff could participate into the conservation campaign. Li & Fung can encourage their employee to engage the guide tours for the visitors who come to Get good use of the buildings in Cheung Sha Wan and Sha Tin. Hong Kong people always appreciate something has a certain year of history, artistic and fancy. They are willing to spend time on those spot that people called “Hipster Check-in spot”. Old element can still be kept since the history is meaningful for a brand. However, if these old element cannot be inherited, the history becomes meaningless. Therefore, it is necessary for Li & Fung to re-consider the importance of culture conservation. Making profit is not the only goal for a company, environment, human and community also need to be considered in the business. Otherwise, the business cannot be long-lasting and sustainable.
The father of modern marketing, Philip Kotler said that Marketing takes a day to learn. Unfortunately, it takes a life to master. Every enterprise, all over the world are still learning how to manage and provide the best way for company to have a long-lasting business. Kotler also stated that if an enterprise do not innovate, the company will die. However, if the company try to do innovation and try to make a change to the company, the enterprise can have a chance for alive. The world and the trend are keeping changing year by year. However, one of the thing has not been changed. Respecting people, including the consumers and the employees. Like American Marketing Association mentioned that Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Nowadays customers are always close to each other like communicating with one another on the Internet and social media. Also, the customers are time-critical and experience-driven. Last but not least, one of the most important point is customers are demanding something which is high transparency and sustainability. Consumers pay more attention to the motivation of the company behind to see whether the company are really doing the honest “Green Issue� in nowadays. For enterprise, the brand can build up positive brand image instead of only thinking how to make profit. As for consumers, they could have a brand-new experience on both shopping and purchasing instead of repeating the buy and throw cycle. In the past hundred years of history, Li & Fung has had three difficulties and turned risks into opportunities. The forth difficulties is right here now and it is believed that Li & Fung can tackle the suffer. It is known that every enterprise, including Li & Fung is changing since the world is keep changing too. However, the world change always win the competition. As the result Li & Fung still cannot catch up with the trend immediately result in the lost of opportunities. Making profit is not the only goal for a company, environment, human and community also need to be considered in the business. Otherwise, the business cannot be long-lasting and sustainable. Li & Fung is doing sustainable business since their business has started because they has realized why sustainable so important to a business. Nevertheless, Li & Fung focus on CSR which may be only one-way and the donation is high. CSR projects are generally financed by long-term financial subsidies. Promoting a partner, interactive and sustainable society today may not be the most effective. The latest rise is CSV, which has been widely adopted by European and American companies in recent years. As a result, it is suggested that Li & Fung may adopt created shared value as marketing strategy in the future planning. Last but not least, it is hoped that ethical marketing could be success in Hong Kong fashion marketing, especially to those Hong Kong based companies. With the implementation of ethical marketing, it is expected the brands can have a more sustainable development so as to provide a better business environment.
(4th April 2019) Dar Sir/ Madam, Hello! My Name is Janet Wong and I am a full-time degree student who is doing a final year project relating to Ethical Marketing. I am glad to have a chance to study the company background of Li&Fung Group. Some couple of question that I would like to ask. My project aims to investigate the fashion ethical marketing in Hong Kong. Some couple of question that I would like to ask: 1. Do Li&Fung Group currently have any activities or planning about fashion ethic? 2. In the perspective of an Enterprise , what is the opinion of Li&Fung Group about how to balance Corperate Social Responsibility and company profit? 3. Why Corperate Social Responsibility is important to Li&Fung Group? 4. How Li&Fung Group think about Creating Shared Value? Will Li&Fung Group have any planning about Creating Shared Value? Thank you very much for your kindly attention! I am looking forward to your reply. Regards, Janet Wong Nottingham Trent University BA (Hons) International Fashion Business
Fig 1. Spencer Fung, (2019). Available at: https://threeyearplan.lifung.com/[Accessed 4 Apr. 2019]. Fig 2. Darren Palfrey, (2017). Available at: https://threeyearplan.lifung.com/ [Accessed 5 Apr. 2019]. Fig 3. CSR, (2019). Available at: https://www.funggroup.com/en/sustainability/strategy/ [Accessed 5 Apr. 2019]. Fig 4. Protrek, (n.d.). Available at: https://bit.ly/2vjz4Bk
[Accessed 5 Apr. 2019].
Fig 5. Protrek, (n.d.). Available at: https://bit.ly/2KZhLAf [Accessed 5 Apr. 2019]. Fig.6 The Mills Fabrica, (2018). Available at: https://bit.ly/2Tvin4C [Accessed 28 Feb. 2019]. Fig.7 Author’s owned Fig.8 Author’s owned Fig.9 Author’s owned Fig.10 Author’s owned Fig.11 Cooperation, (n.d.)Available at: http://cdn.publishyourarticles.net/wp-content/uploads/2015/07/cooperation-3.jpg [Accessed 5 Apr. 2019]. Fig.12 Cooperation, (n.d.). Available at: https://libraryeuroparl.files.wordpress.com/2017/12/eprs-briefing-608764-budget-development-cooperation-instrumentfinal.jpg [Accessed 5 Apr. 2019]. Fig.13 Shared Value, (2019) Available at: https://mk0masterinsighayvuk.kinstacdn.com/wp-content/uploads/2017/04/3198.jpg [Accessed 10 Apr. 2019]. Fig.14 Shared Value, (2019) Available at: https://sharedvalue.mazars.com/wp-content/uploads/2018/02/technology-1920x1080.jpg [Accessed 10 Apr. 2019].
1.
Global Brands Group, (2019). Cooperate Responsibility [online] Available at: https://www.globalbrandsgroup.com/about/corporate-responsibility [Accessed 1 Apr. 2019].
2.
Li & Fung, (2019). Our governance[online] Available at: https://www.lifung.com/about-lf/our-governance/ [Accessed 2 Apr. 2019]
3.
Li & Fung, (2019). Code of Conduct and Business Ethics [online] Available at: https://www.lifung.com/wp-content/uploads/2018/03/LF-Code-of-Conduct-andBusiness-Ethics.pdf [Accessed 2 Apr. 2019]
4.
Li & Fung, (2019). 3-year plan. [online] Available at: https://www.lifung.com/our-strategy/three-year-plan/#content-area [Accessed 6 Apr. 2019]
5.
Li & Fung, (2019). 3-year plan. [online] Available at: https://threeyearplan.lifung.com/ [Accessed 6 Apr. 2019]
6.
Li & Fung, (2019). Li & Fung hosts Analyst Day to discuss new Three-Year Plan. [online] Available at: https://threeyearplan.lifung.com/downloads/lifung_analyst_day_press_release_30march2017_eng_final.pdf [Accessed 6 Apr. 2019]
7.
Li & Fung, (2019). Sustainability: Human Rights. [online] Available at: https://www.funggroup.com/en/sustainability/human_rights/ [Accessed 6 Apr. 2019]
8.
Li & Fung, (2019). Sustainability: Environment. [online] Available at: https://www.funggroup.com/en/sustainability/environment/ [Accessed 6 Apr. 2019]
9.
Li & Fung, (2019). Sustainability: Community. [online] Available at: https://www.funggroup.com/en/sustainability/community/ [Accessed 6 Apr. 2019]
10. Li & Fung, (2019). Fung Spencer. [online] Available at: https://www.lifung.com/leadership/fung-spencer/ [Accessed 8 Apr. 2019]
12. Li & Fung, (2019). Darren Palfrey. [online] Available at: https://www.lifung.com/leadership/darren-palfrey/ [Accessed 8 Apr. 2019] 13. HK gov News, (2016). Shared Value. [online] Available at: https://www.news.gov.hk/tc/record/html/2016/09/20160925_081133.shtml [Accessed 7 Apr. 2019] 14. SIE Fund, (2019). Shared Value: Creating Competitive Advantage. [online] Available at: https://www.sie.gov.hk/sharedvalue/2015forum/index.html [Accessed 3 Apr. 2019] 15. D2 Place, (n.d.). Shared Value. [online] Available at: http://piestrategy.com/case-study-d2 [Accessed 4 Apr. 2019] 16. Our Hong Kong Foundation, (2016). Create Shared Value. [online] Available at: https://bit.ly/2UyIHqb [Accessed 4 Apr. 2019] 17. CUP, (2017). From CSR to CSV. [online] Available at: https://www.cup.com.hk/2017/05/10/mr-bao-from-csr-to-csv/ [Accessed 4 Apr. 2019] 18. Li & Fung Foundation, (2019). Li & Fung Foundation. [online] Available at: https://www.lifungfoundation.org/ [Accessed 4 Apr. 2019] 19. Li & Fung Foundation, (2019). Our Impact. [online] Available at: https://www.lifungfoundation.org/our-impact/ [Accessed 5 Apr. 2019] 20. Europeance, (2019). Fashion Industry Seeks to Shake Bad Reputation with. CSR Initiatives
[online] Available at: https://www.europeanceo.com/business-and-management/fashion-
industry-seeks-to-shake-bad-reputation-with-csr-initiatives/ [Accessed 4 Apr. 2019] 21. Orientaldaily, (2018). Li & Fung Financial Loss 2.9 billion last year. [online] Available at: https://orientaldaily.on.cc/cnt/finance/20180323/mobile/odn-201803230323_00202_012.html [Accessed 9 Apr. 2019] 22. Singtao Daily, (2016). Li & Fung Centennial Legend. [online] Available at: http://std.stheadline.com/daily/news-content.php?id=1509684&target=2 [Accessed 10 Apr. 2019] 23. China Daily, (2008). Li & Fung denies layoff report, will cut costs by 10%. [online] Available at: http://www.chinadaily.com.cn/hkedition/2008-11/18/content_7213085.htm [Accessed 10 Apr. 2019] 24. The Mills, (2018). History Heritage [online] Available at: http://www.themills.com.hk/en/about-the-mills/history-heritage/ [Accessed 3 Mar. 2019]. 25. The Mills, (2018). The 3 Pillars [online] Available at: http://www.themills.com.hk/en/about-the-mills/the-3-pillars/ [Accessed 3 Mar. 2019]. 26. The Mills, (2018). Vision [online] Available at: http://www.themills.com.hk/en/about-the-mills/vision/ [Accessed 3 Mar. 2019]. 27. The Mills, (2018). Heritage [online] Available at: http://www.themills.com.hk/en/about-the-mills/heritage/ [Accessed 3 Mar. 2019]. 28. South Morning China Post, (2017). Li & Fung’s latest attempt at reinvention latches on technology. [online] Available at: https://www.scmp.com/business/article/2083861/li-fungslatest-attempt-reinvention-latches-technology [Accessed 11 Apr. 2019].
1.
South Morning China Post, (2016). Hong Kong Fashion NGO’s documentary shows progress on sustainability. [online] Available at: https://www.scmp.com/lifestyle/fashionluxury/article/2023958/hong-kong-fashion-ngos-documentary-shows-progress [Accessed 1 Apr. 2019].
2.
SGS, (2017). New Timeline for transition to SA8000:2014. [online] Available at: https://www.sgs.com/en/news/2017/05/new-timeline-for-transition-to-sa8000-2014 [Accessed 2 Apr. 2019].
3.
Ecotextile News, (2017). OECD calls for action on textile due diligence. [online] Available at: https://www.ecotextile.com/2019030524114/social-compliance-csr-news/oecdcalls-for-action-on-textile-due-diligence.html [Accessed 4 Apr. 2019].
4.
Jointpublishing, (2013). The changing of Li & Fung. [online] Available at: https://www.jointpublishing.com/JointPublishing2013/media/JointPublishing/Publishing/3_New_Book/2016/201609/110years_LiFung-136-155.pdf?ext=.pdf [Accessed 10 Apr. 2019].
5.
Global Brands Group, (2019). Cooperate Responsibility [online] Available at: https://www.globalbrandsgroup.com/about/corporate-responsibility [Accessed 1 Apr. 2019].
6.
Li & Fung, (2019). Our governance[online] Available at: https://www.lifung.com/about-lf/our-governance/ [Accessed 2 Apr. 2019]
7.
Li & Fung, (2019). Code of Conduct and Business Ethics [online] Available at: https://www.lifung.com/wp-content/uploads/2018/03/LF-Code-of-Conduct-and-BusinessEthics.pdf [Accessed 2 Apr. 2019]
8.
Li & Fung, (2019). 3-year plan. [online] Available at: https://www.lifung.com/our-strategy/three-year-plan/#content-area [Accessed 6 Apr. 2019]
9.
Li & Fung, (2019). 3-year plan. [online] Available at: https://threeyearplan.lifung.com/ [Accessed 6 Apr. 2019]
10. Li & Fung, (2019). Li & Fung hosts Analyst Day to discuss new Three-Year Plan. [online] Available at: https://threeyearplan.lifung.com/downloads/lifung_analyst_day_press_release_30march2017_eng_final.pdf [Accessed 6 Apr. 2019] 11. Li & Fung, (2019). Sustainability: Human Rights. [online] Available at: https://www.funggroup.com/en/sustainability/human_rights/ [Accessed 6 Apr. 2019] 12. Li & Fung, (2019). Sustainability: Environment. [online] Available at: https://www.funggroup.com/en/sustainability/environment/ [Accessed 6 Apr. 2019] 13. Li & Fung, (2019). Sustainability: Community. [online] Available at: https://www.funggroup.com/en/sustainability/community/ [Accessed 6 Apr. 2019] 14. Li & Fung, (2019). Fung Spencer. [online] Available at: https://www.lifung.com/leadership/fung-spencer/ [Accessed 8 Apr. 2019] 15. Li & Fung, (2019). Darren Palfrey. [online] Available at: https://www.lifung.com/leadership/darren-palfrey/ [Accessed 8 Apr. 2019]
16. HK gov News, (2016). Shared Value. [online] Available at: https://www.news.gov.hk/tc/record/html/2016/09/20160925_081133.shtml [Accessed 7 Apr. 2019] 17. SIE Fund, (2019). Shared Value: Creating Competitive Advantage. [online] Available at: https://www.sie.gov.hk/sharedvalue/2015forum/index.html [Accessed 3 Apr. 2019] 18. D2 Place, (n.d.). Shared Value. [online] Available at: http://piestrategy.com/case-study-d2 [Accessed 4 Apr. 2019] 19. Our Hong Kong Foundation, (2016). Create Shared Value. [online] Available at: https://bit.ly/2UyIHqb [Accessed 4 Apr. 2019] 20. CUP, (2017). From CSR to CSV. [online] Available at: https://www.cup.com.hk/2017/05/10/mr-bao-from-csr-to-csv/ [Accessed 4 Apr. 2019] 21. Li & Fung Foundation, (2019). Li & Fung Foundation. [online] Available at: https://www.lifungfoundation.org/ [Accessed 4 Apr. 2019] 22. Li & Fung Foundation, (2019). Our Impact. [online] Available at: https://www.lifungfoundation.org/our-impact/ [Accessed 5 Apr. 2019] 23. Europeance, (2019). Fashion Industry Seeks to Shake Bad Reputation with. CSR Initiatives
[online] Available at: https://www.europeanceo.com/business-and-
management/fashion-industry-seeks-to-shake-bad-reputation-with-csr-initiatives/ [Accessed 4 Apr. 2019] 24. Orientaldaily, (2018). Li & Fung Financial Loss 2.9 billion last year. [online] Available at: https://orientaldaily.on.cc/cnt/finance/20180323/mobile/odn-201803230323_00202_012.html [Accessed 9 Apr. 2019] 25. Singtao Daily, (2016). Li & Fung Centennial Legend. [online] Available at: http://std.stheadline.com/daily/news-content.php?id=1509684&target=2 [Accessed 10 Apr. 2019] 26. China Daily, (2008). Li & Fung denies layoff report, will cut costs by 10%. [online] Available at: http://www.chinadaily.com.cn/hkedition/2008-11/18/content_7213085.htm [Accessed 10 Apr. 2019] 27. The Mills, (2018). History Heritage [online] Available at: http://www.themills.com.hk/en/about-the-mills/history-heritage/ [Accessed 3 Mar. 2019]. 28. The Mills, (2018). The 3 Pillars [online] Available at: http://www.themills.com.hk/en/about-the-mills/the-3-pillars/ [Accessed 3 Mar. 2019]. 29. The Mills, (2018). Vision [online] Available at: http://www.themills.com.hk/en/about-the-mills/vision/ [Accessed 3 Mar. 2019]. 30. The Mills, (2018). Heritage [online] Available at: http://www.themills.com.hk/en/about-the-mills/heritage/ [Accessed 3 Mar. 2019]. 31. South Morning China Post, (2017). Li & Fung’s latest attempt at reinvention latches on technology. [online] Available at: https://www.scmp.com/business/article/2083861/lifungs-latest-attempt-reinvention-latches-technology [Accessed 11 Apr. 2019].