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Chinese tourists on the eve of the 2018 FIFA World Cup in Moscow, Russia June 13, 2018.
Reuters/Gleb Garanich
Strong interest.
HOT MOVES

The World Cup winner in China is a little-known oven maker

Echo Huang
By Echo Huang

Reporter

China’s national soccer team didn’t make it into the World Cup, but one of its companies scored big-time. Vatti, a little-known oven maker based in the southern city of Zhongshan, raised eyebrows by promising product refunds if the team it sponsored won the tournament.

Yesterday that team, France, did just that, beating Croatia 4-2 in the final. But while Vatti must now pay up, the amount owed is negligible in light of the buzz that its unusual pledge generated on Chinese social media, starting from early in the tournament and indeed even before it began.

The refund promise has garnered some 90,000 discussions (link in Chinese) just on Weibo, a popular social media platform, alone.

“Vatti is the biggest winner of the World Cup,” wrote one Weibo user (link in Chinese).

Vatti announced early today (July 16) that customers who purchased a set of “champion products” in June and early July could get a full refund (link in Chinese) in the following days. The product set, which included a gas stove and ventilator, cost about 5,000 yuan ($747).

“Vatti, your promise has shown me the side where a Chinese firm can keep its promise,” commented one customer (link in Chinese) under Vatti’s Weibo post about the refund procedure.

The company might need to pay up to $11.8 million in refunds, according to Chinese financial news outlet Caixing. By contrast, Mengniu, a Chinese dairy product company, said it planned to spend about $300 million on World Cup marketing after it became a sponsor of the tournament last December.

According to Chinese economic news site 21.cn, Vatti, with its low-budget stunt, achieved a marketing payoff (link in Chinese) nearly equal to what bigger firms like Mengniu did by paying much more. Seven high-profile Chinese companies signed on as sponsors of this year’s tournament, after other firms pulled out for fear of being tarnished by corruption scandals at FIFA.

Earlier this month Vatti said its campaign had a “substantial elevation effect” (link in Chinese) on sales and brand awareness, and described the budget for it—even counting possible refunds—as “controllable spending” that wouldn’t have a substantial impact (link in Chinese) on the bottom line.

The fine print in Vatti’s refund offer helped, too. For instance online shoppers can get a refund only if they did not accept a free gift offered along with the champion product set.

Vatti’s share price ended the day about 4% higher (paywall).

France’s win has put some pressure on Vatti franchisees, which must cover refund costs for products purchased in their outlets. Ones in Beijing and Tianjing disappeared right before the company ended its marketing campaign, but Vatti said in a statement (link in Chinese) that it would assume their responsibilities.

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