Chinese Appliance Maker’s RMB 79 Million Bet on the World Cup
Vatti Corp. Ltd., the Chinese kitchen-appliance maker, together with its franchisees, initiated a country-wide refund procedure in response to the French victory in the 2018 FIFA World Cup in the early mornings on July 16 Beijing time (CST).
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After France won against Croatia with a score of 4-2, Vatti made an announcement that as official partner of French national football team, it would keep its promise to refund customers who bought specific Vatti products during the 2018 World Cup.
In May, Vatti promised that anyone who bought a set of “championship products” between 0:00 on June 1 to 22:00 on July 3 would receive a full refund under the condition that France wins the 2018 World Cup. A full championship product set that includes a gas stove and a ventilator, for example, would cost 4,999 yuan ($747.5).
It is estimated that the refund could cost Vatti up to 79 million yuan.
However, the Guangdong-based company stipulated ahead of the tournament that all refunds for products purchased at off-line outlets would be covered by franchisees. Vatti itself would be responsible for refunds of online purchases that are about 37 percent of total refund costs. Meanwhile, the “championship products” that are eligible for the refund account for only 8 percent of total sales during the period, according to data published by Vatti.
Appliance customers will not directly receive the refund in cash. Instead, the money will be returned in the form of store credit issued by their respective online-shopping platforms. For example, Tmall customers will receive store credit valid for three years to the Tmall Supermarket, another platform backed by the Alibaba Group.
The refund campaign spurred a sales surge both online and offline. During the tournament sales in Vatti off-line franchises grew 20 percent to 700 million yuan from same time last year and online sales climbed to 300 million yuan, an increase of 30 percent.
During the 618 shopping festival, Vatti had the highest conversion rate among the top 20 brands in the major appliances industry on the Alibaba-backed Tmall, experiencing an increase of five-fold at its peak.