Organisations and individuals who, at the start of the year, felt secure in their market and company position have had to think again. The pandemic has completely turned the industry on its head and has led businesses to drastically change what Sourcing actually means to the company. The conversations I have had this year have been reminiscent of those in 2007-2008 but with less marginal optimism that was present then.

The disruption in 2020 has also allowed companies and individuals to look internally, addressing business sustainability issues that many previously chose to procrastinate over. For example, with the increased activity in e-commerce, the traditional way a supply chain delivers is also expected to change in a feat to reduce carbon footprints.

Despite disruptions, brands that have shown successes in 2020 are those that have a head start in transforming their Asia operations, ensuring that efficiency and sustainability are at the heart of what they do.


Sourcing activities in Asia

Hong Kong is a long-established epicentre for Sourcing, Trading and Buying. However, with looming doubts over high operational costs, we observed that numerous sourcing functions based in Hong Kong have been relocated to China Mainland. Outlook reports for brands and retailers have also reported similar trends to Southeast Asia.

Shanghai has been steadily taking over more market share forming a ‘sourcing hub’ as companies prefer cost-effective locations for their sourcing teams.   US retailers, unaffected by trade tensions, are in a better position to choose China Mainland as their main sourcing ground and can enjoy the benefit of shifting their teams closer to the supplier base. Several clients of ours are either planning or implementing this transition, thus creating a need  for professionals in Hong Kong to evaluate their future options and where to locate.  

Vietnam continues to be a top location for companies to move to for a few reasons:

1.      Significant foreign investment in Vietnam’s manufacturing sector has significantly improved both the quality of products and capacity to service large orders

2.      Cost competitive advantage due to trade tensions

3.      Significant reduction in overhead cost with sourcing teams near manufacturing sites and utilising local talent

With these reasons, it is no surprise that On Running, an up and coming sports brand has chosen Vietnam as their Asia operations to benefit from these competitive advantages.


The e-commerce revolution

E-commerce platforms have seized opportunities during lockdowns and are undoubtedly the biggest winners in this retail disruption. Due to the high-volume of orders, Amazon is now looking to partner with mall operators to turn Sears and J.C. Penney stores into fulfillment centres to speed up the crucial last mile of delivery. This move reflects the intersection of two trends: the decline of brick-and-mortar and the boom of e-commerce.

Another high performing e-commerce business is the South Korean company Coupang. They have been aggressively investing in their very own Rocket Delivery network and is now able to provide same-day delivery of more than five million unique items. By having this competitive advantage in delivery times, Coupang has seen  have been crowned the world’s fastest growing e-commerce business.


Digital transformation in Sourcing

Hong Kong-based, Trading and Logistics company Li & Fung made the headlines when invested US$100M a month after Li & Fung decided to privatise the business. The Fung family made a strategic decision to revaluate the business model and set course for long-term transformation.

This timely investment will accelerate the development of Li & Fung’s end-to-end digital supply chain through JD’s proprietary technologies. With this partnership and JD’s knowledge of the China Mainland market, they are hoping to offer new services that would help global retailers and brands navigate a highly uncertain and ever-changing landscape. This digitalisation will result in faster Product Development, more accurate forecasts, and reduced downtime.



Allbirds, a young shoe manufacturing company that designed its entire process around sustainability has pledged to produce the “lowest-carbon” shoe by exploring innovations across the entire supply chain – from material choices to manufacturing facilities and transportation methods that utilise renewable energy and fuels. They have also created a Carbon Fund to purchase offsets for each of that 10kg to incentivise innovating down to zero and bolster its eco-friendly credentials. Their determination and efforts paid off as this unique selling point has successfully increased Allbirds consumer loyalty and turned them into an industry disruptor.  

Another great example is the work of VF, an American fashion distribution group. After closing the first green bond issue for US$500M, VF partner sustainable technology providers to install solar panels across their factories to drive fully sustainable supply. While VF is not the first company to link its financing with sustainability, many still have doubts on the possible business value such investments can create.


Movers & Shakers

In 2020, we have also seen some significant senior-level moves in the sector. 

1.      Xavier De Bellescize’s move to Kingfisher as General Manager – Sourcing Buying Director in June set the return of Jean-Daniel Gatignol as Managing Director of Global Sourcing to the Carrefour business 

2.      As ex-President of Walmart China, Wern Yuen-Tan moved back to Singapore, Walmart hired Christina Zhu, their first female President & CEO who will no doubt be looking to continue the success that the US retailer has had in continuing growth.


Looking into H2 2020

The focus for the Sourcing industry moving forward needs to be on fully integrating the supply chain and continuing to look at where technology can be used for analytical enhancement. This integration would demand future candidates to have experience in all areas – Sourcing, Demand and Supply Planning, Logistics, S&OP as well as a deep understanding in manufacturing.

Interviews will also shift away from needing examples of sourcing process and be focused more on the candidate’s ability to drive change management and be a true leader.

Digital transformation will continue to be at the forefront of innovation. Candidates who demonstrate the ability to grasp new technologies and implement them will be in a better position to secure jobs in the future.

Although this has been an unprecedented time in the history of Sourcing, we also walked away with numerous learnings that will truly define the careers we have in the future.  


Bruce Neish
Associate Partner
Asia Sourcing

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