The Morning Download: Rise of E-Commerce Could Drive Job Growth in U.S., Fung Group Chairman Predict
Good morning. If there's going to be an increase in job growth in the U.S., here's how it's going to happen, according to Fung Group Chairman Victor Fung, who leads the Hong Kong-based middleman between Western retailers and manufacturers in China. The need to develop products and bring them to market in weeks or days, not months, may lead to the final assembly of goods within the U.S., even as products are sourced globally, he said Tuesday at the Wall Street Journal CEO Council in Tokyo. "That’s what’s going to drive change, not a group of politicians,” Mr. Fung said.
Slow to adapt. The business model of the 111-year-old Fung Group "is now under siege as retailers work directly with their suppliers and the rise of online retailers undercuts the middleman," the Journal reports. "Slow to adapt to the transformation brought by e-commerce, the Fung Group’s Hong Kong-listed sourcing company, Li & Fung Ltd., logged its third straight annual decline in both revenue and profit in 2016, with revenue falling to its lowest since 2009. The group is now betting big on information technology to create a digital supply chain to help clients better compete against online retailers."
Tech, not globalization, is driving jobs. Mr. Fung told the Journal that 80% of the impact of globalization, including job losses, was attributable to technology, not the spread of the supply chain overseas. Companies also need to bear in mind that politics notwithstanding, the main growth in consumption will come from Asia, Mr. Fung said.
