Jenny Chan 陳詠欣
Jul 16, 2018

Chinese appliance brand on the hook for US$12 million in refunds as France wins World Cup

Vatti and its franchisees must pay consumers some RMB79 million (US$11.8 million) in reimbursements after Les Bleus claimed the World Cup crown last night.

Chinese appliance brand on the hook for US$12 million in refunds as France wins World Cup

Chinese kitchen-appliance brand Vatti, an official partner of France's national soccer team, is now on the hook to fulfil its audacious promise to fully refund Vatti products bought during 1 June and 3 July should the team win it all.

As Murphy's Law would have it, France did indeed win the World Cup last night in Moscow, an expensive victory for the Chinese sponsor totalling RMB79 million (US$11.8 million) in reimbursements, though many opine this isn't that expensive for the marketing returns Vatti is getting.

Its proclamation was made on 30 May as the buzz around the World Cup skyrocketed in China, prompting Vatti's chairman to capitalise on the buzz with a high-profile marketing manoeuvre and having the promotional offer sealed in full-page ads on the Nanfang Metropolis Daily.

Any consumer who bought a specific 'championship package', which could be a gas-stove-and-ventilator set, a water heater, or a dishwasher, can apply for the refunds. The refund method is not cash though, but Tmall or JD stored-value cards, possibly stimulating another round of buying.

However, more hefty is the payout from Vatti's 133 franchisees nationwide, thanks to Vatti's own stipulations for refund costs for products purchased offline being covered by its franchisees. Vatti itself will be only bear the cost of sales from online channels, which represents about 37% of total refunds at RMB29 million.

The company formerly known as Vantage also earlier announced in a regulatory disclosure that this World Cup marketing activation has "significantly improved" its retail business and its brand awareness, in exchange for "controllable" expenses that are within the company's annual budget.

While this appears to be a big coup for Vatti on paper, the brand's distributors and dealers are the ones responsible for the bulk of refunds during the campaign period, according to regulatory filings, estimated to be RMB50 million. Vatti's calculations, however, state that this accounted for only 7% of franchisees' total sales during the eligible period. 

Yet reports in Chinese media say some dealers have found the refund scheme difficult to swallow. On 29 June nearing the end of the campaign, a Guangdong province court seized assets from Vatti's Beijing and Tianjin dealerships after their representatives disappeared for more than 10 days reportedly due to cash-flow troubles linked to the scheme.

Campaign China

Related Articles

Just Published

8 hours ago

Purpose, laughs, and boppable tunes: Spikes jury ...

SPIKES ASIA X CAMPAIGN: Presidents and members of several Spikes Asia juries share the top trends they spotted in the jury Zoom rooms, with video examples.

8 hours ago

Crash Course: How to tell engaging short-form stories

To round off a week of creativity-themed content during Spikes Asia X Campaign festival, this Crash Course provides useful tips on how to build story arcs and create thumb-stopping campaigns for short-form.

8 hours ago

Lessons from Tesla, Apple and yoga (yes, yoga) in ...

SPIKES ASIA X CAMPAIGN: Creatives need to drive relevance for sustainable options, instead of virtue-signalling about sustainability, argues Gulshan Singh of FCB Interface.

8 hours ago

Spikes Asia Awards 2021: Campaign's contenders 3

As the juries make their final selections ahead of the March 1 winners announcement, Campaign Asia-Pacific's editorial team has once again scoured through the 2021 shortlist to pick out the work we expect to win.