Yiwu manufacturers score big in lead up to soccer world cup
Updated: 2014-05-19 03:53
By Yan Yiqi in Hangzhou (China Daily USA)
Merchants and soccer fans blow vuvuzela horns at Yiwu International Trade City in East China’s Zhejiang province on May 6. Almost 90 percent of the horns for the Brazil World Cup are produced in Yiwu. [Lyu Bin / For China Daily]
During the FIFA World Cup's 84-year history, the Chinese soccer team has only managed to reach one final game.
Unlike Chinese teams' poor performances in global soccer, however, entrepreneurs in China have been leading businesses making money from the international sports event. In Yiwu, Zhejiang province, commodities related to the upcoming Brazil World Cup have been being shipped to the rest of the world for the past seven months or more.
The city, as the world's largest market of small commodities, has been exporting sports accessories worth more than $10 million every month since September, according to the customs office at Yiwu.
In March, exports of sports goods reached $16.1 million, growing 22.1 percent from a year earlier.
As early as September, Yan Zhenhua, general manager of Yiwu Xiangle Sports Goods Co, has been busy receiving orders from overseas clients to produce caxirolas, a percussion instrument created by Brazilian musician Carlinhos Brown. It is the Brazilian version of the vuvuzela, which was a popular cheering instrument during the 2010 South Africa World Cup. The caxirola consists of a closed plastic basket with a flat-bottom filled with small synthetic particles.
Yan said by the end of April, the company had sold more than 2 million caxirolas. Each cost 2.3 yuan (36 cents) wholesale.
"The first order came in last September, from a French client who ordered 40,000 caxirolas. Since then, manufacturing of this instrument has been the core business of our company," he said.
Yan's company has five machines to produce caxirolas, with daily productivity of 5,000 units. Two-thirds of the company's 50 workers focus on production of the instrument, with everyone working overtime since October.
"In order to meet the demand, we start working at 8 am and stop working at 10 pm," he said.
Yan said he has clients ordering caxirolas from almost every corner of the world.
"Most foreign clients have their own demands for a logo or national flag on the bottom of the instrument and we produce according to their demands," he said.
Yan said there are about 10 companies in Yiwu producing the same instrument his company does, with similar productivity.
"I dare say that almost all of the caxirolas on the global market come from Yiwu," he said.
Yiwu manufacturers' dominance in this area was established before and during the 2010 South Africa World Cup. In that year, more than 90 percent of the world's vuvuzelas were produced in Yiwu.
Wu Xiaogang, general manager of Yiwu Jiannong Craftsware Co, said sales of caxirolas are far better than those of vuvuzelas in 2010, in both quantity and profit.
"The sales volume of vuvuzelas accounted for no more than one-tenth of this year's caxirolas. I guess it was because, this time, almost all foreign sellers know where to purchase the instrument," he said.
Wu also said the added value of caxirolas is triple that of 2010's vuvuzelas.
"The profit from producing one vuvuzela was no more than 0.2 yuan. This year, the profit can be around 0.7 yuan for each caxirola. I think that is because we have more say in pricing the products," he said.
The instrument is only one World Cup-related item that has been rushing to the world from Yiwu this game season. Wigs, scarves, t-shirts, socks and anything people can think of related to soccer can be found in Yiwu.
The Brazil World Cup will be the third in which Yiwu Lianxi Knitting Co has participated in selling products. This year, the company received orders to produce more than 500,000 scarves, plus matching hats and gloves for clients from Brazil.
Lin Peng, general manager of the company, said they started preparing for this World Cup season last March.
"Profits from the last two World Cups were great, but due to a lack of productivity, we lost some orders. We prepared early this time to win more orders," he said.
Lin said the company purchased two knitting machines to deal with the surging demand from Brazil. The company also recruited 20 experienced workers.
"Business was not satisfactory in recent years because of the global economic crisis. In 2011 and 2012, we cut our workers by half because there were not that many orders. This time, we hope to expand our Brazilian market via the upcoming World Cup this year and the Olympic Games in 2016," he said.
Lin traveled to Brazil in February 2013 for a market survey and found that the Brazilian market is vigorous.
"I have strong faith in the Brazilian market, not only for sports events, but also for its vitality," he said.
In the first quarter of this year, exports from Yiwu to Brazil reached $64.22 million, growing by 15.8 percent from a year earlier. The average year-on-year growth of Yiwu's overall exports in the first quarter was 5.4 percent.
Yin Ben, an official with the Yiwu customs office, said export growth in Yiwu caused by the Brazil World Cup is significant.
"In the first quarter, the year-on-year growth rate of exports of sports goods to Brazil reached 41.7 percent," he said.
Yin said due to the World Cup and 2016 Olympics, Brazil will be a main export destination of goods shipped from Yiwu in coming years.
"Growth brought about by the sports economy is obvious. Brazil, as a developing economy and a member of BRICS (Brazil, Russia, India, China and South Africa), also has a lively economy. Brazilians' shopping passion further facilitates the growth," Yin said.
As soccer accessories exports heated up in recent months, Yin said the customs office paid special attention to intellectual property rights and piracy.
The office strengthened inspection efforts after the General Administration of Customs launched an initiative known as Greenfield Action, an initiative focused on World Cup issues, on April 11.
By the end of April, the office had intercepted 10 batches of export goods that violated the intellectual property rights of FIFA or its sponsors. The largest of these was a shipment of 1,020 unauthorized FIFA World Cup soccer trophies intercepted on April 16.