China's Soccer Team Misses World Cup, but Country's Manufacturers Still Score

By Chao Deng and Jenny W. Hsu 

in Taipei

Never mind that China didn't get to send a team to this year's World Cup. It sent the official ball instead.

Made in China, sold in Brazil. So it goes for many a product going to fans across the world.

The Brazuca, the six-panel soccer ball created by Adidas AG, was manufactured by a factory in the southern Chinese city of Shenzhen. The factory is a subsidiary of Long Way Enterprise, a Taipei-based sports gear maker that has joined with Adidas since 1997. It also made the official ball for the 2010 World Cup in South Africa; 13 million official balls were sold that year.

"We see our products on the TV every day...we feel we've already scored, " said Lawrence Poon, a Shenzhen-based manager at supplier Long Way.

An Adidas spokeswoman said that although some of this year's balls were also made in Pakistan due to high demand, the company frequently goes to China because of its skilled workforce, vast network of material suppliers and infrastructure.

China will also leave its stamp on the games in other ways.

The country is manufacturing a long list of World Cup memorabilia--from figurines of the armadillo that serves as the games' official mascot to wigs, flags and caps. And who could forget the (Chinese-made) vuvuzelas that cropped up when South Africa hosted the last cup? This year, the country is stocking fans with an alternative instrument, the percussive Brazilian caxirolas.

While there is no official tally of how much of the sales profits China will keep, margins could be thinning given the rise in domestic labor costs. Many global sportswear brands outsourced their production to Taiwan in the late 1980s, before the Chinese labor market opened up in 1990s, says Mr. Poon. But now, as wages rise in both China and in neighboring Southeast Asian countries, competition between factories is "not only about who's the cheapest but who's most efficient" in production.

"The term 'Made in China' is slowly becoming the definition of high-quality, even though it wasn't the case in the past," said Simon Lee, president of Wagon Group, the Taiwanese-owned Chinese company that is responsible for 80% of the officially licensed souvenirs for this year's World Cup.

Wagon has already produced more than 8 million World Cup-related items, up from roughly 2 million pieces in the 2010 games. Mr. Lee, whose firm has been producing World Cup paraphernalia for a decade, says demand during this year's game has been "bigger than ever," which he said is "not surprising given that the popularity of football has spiked globally in recent years."

A good portion of World Cup products are being manufactured in Yiwu International Trade City in eastern Zhejiang province. Yiwu's exports of so-called small commodities to Brazil totaled $160 million in the first five months of this year, up 31% year-over-year, according to data from the city's customs authority. Of that, sporting goods exports totaled $2.78 million in the same period, up 42% on-year.

But the real money to be made may be in some of the higher-end Chinese products appearing at the games. China developed security machines stationed at a number of venue entrances, electric trains to get people to the main stadium, LED screens for replays as well as hybrid buses to shuttle tourists to the tournament's various events.

Chinese President Xi Jinping has said he'd like the country to qualify, host and win a World Cup one day. That will take time. The country's national soccer team, at a current world ranking of No. 103, has only made the tournament once, in 2002.

As with many other things, China showcases its economy first, so for now, it is the country's manufacturing powerhouses reveling in World Cup glory.

--Jenny Hsu in Taipei contributed to this article.

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