Mascots of the 2018 FIFA World Cup are displayed at Kayford Holdings Ltd, a Hangzhou-based firm which is the global exclusive manufacturer. (PHOTO BY LONG WEI / CHINA DAILY)
As a hardcore soccer fan, 42-year-old Hu Hao has his predictions and preferences for the 2018 FIFA World Cup－he hopes Germany can defend their title but thinks the chance is small.
Overseas businesses account for 70 percent of the company's revenue, but it hopes, the domestic business can contribute to half of its sales
However, as a veteran businessman who has been making national flags for almost a quarter of a century and three World Cups, he is not going to apply any of his knowledge or decade long study of the sport to his business decisions－how many flags he should make for each country.
"The most important thing (about making national flags for the World Cup) is you don't make or stock products according to any of the predictions, unless it's from Paul (the prophetic octopus)," quipped Hu, the owner of Donghao Flag Manufacturer in Hangzhou, East China's Zhejiang province.
Collaborating with traders and distributors from every country that his flags are exported to, Hu only starts his assembly line when his partners place their orders.
"Of course, it means less profit, but also far less loss," said Hu, who left a State-owned flag-making factory and started his own business in 2012.
Today, his plant, covering 1,500 square meters with 30 or so workers, is one of the largest in China. It produces flags worth about 20 million yuan (US$3.12 million) every year, covering all the 196 countries around the world except China, which requires special authorization to make its flags.
For the upcoming World Cup, he has already exported 400,000 or so flags since January. After the top four teams for the finals are picked, he expects there will be orders for tens of thousands of more flags.
"The reason we don't stock flags for the World Cup is mainly because the ones made for the game are of the lowest cost. The enthusiasm for the game might be immense during the two weeks, but it's also a flash in the pan. Once it's over, few would pay for the flags," said Hu, who also makes flags for other sports games, corporate sponsorship events and political campaigns.
Kayford Holdings Ltd, the global exclusive manufacturer of the 2018 World Cup mascot, has a different reason for its empty warehouse.
"They are all sold out," said Li Zhijia, marketing manager of the company, which is also based in Hangzhou.
"Orders are still flooding in, and our partner factories are busy stuffing the furry toys," she added, referring to the official mascot－a wolf called Zabivaka, which means "the one who scores" in Russian.
This is the second time the company has been chosen as the exclusive manufacturer of a mascot for FIFA.
The company was founded in 2013 by local businessman Li Hong, who used to act as a middleman in foreign trade. He realized that as the standard of spoken English among Chinese people improved, his profit margins were shrinking.
As a sports fan and with his connections with manufacturers of toys, textiles and souvenirs in China, he acquired a German agency involved in logo and image licensing for several soccer clubs in Europe and started a new business.
"In the beginning it was tough. But once we proved Chinese manufacturers not only make value-for-money products, but also stick to what the contract requires, everything has gone smoothly," Li said.
For FIFA, for example, the company can only make and sell things using the image of the wolf until the end of 2018, as specified in the contract.
So far, they have produced about one million mascot toys in four different sizes. By partnering with more than 100 factories all over China, the company also sells candies, T-shirts and key chains with the image of the wolf.
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"The World Cup is the most prestigious sports event in the world. And working as its exclusive manufacturer twice in a row is helpful for our company's profile," Li said.
It is now the licensed manufacturer of some 100 sports clubs both at home and abroad for their collections, including AC Milan and Southampton.
Overseas businesses account for 70 percent of the company's revenue, but it hopes, with soaring Chinese interest in a variety of sports, the domestic business can contribute to half of its sales.