How Yongkang, Zhejiang Province became China’s Cup Capital

How Yongkang, Zhejiang Province became “China’s Cup Capital”
Yongkang, known as Lizhou in ancient times, is now a county-level city under the jurisdiction of Jinhua City, Zhejiang Province. Calculated by GDP, although Yongkang ranks among the top 100 counties in the country in 2022, it ranks very low, ranking 88th with a GDP of 72.223 billion yuan.

However, although Yongkang does not rank high among the top 100 counties, with a GDP gap of more than 400 billion yuan from Kunshan City, which ranks first, it has a popular title – “China’s Cup Capital”.

Data shows that my country produces about 800 million thermos cups and pots annually, of which 600 million are produced in Yongkang. At present, the output value of Yongkang’s cup and pot industry has exceeded 40 billion, accounting for 40% of the country’s total, and its export volume accounts for more than 80% of the country’s total.

So, how did Yongkang become the “Capital of Cups in China”?

The development of Yongkang’s thermos cup and pot industry is, of course, inseparable from its location advantage. Geographically, although Yongkang is not coastal, it is offshore and is a “coastal area” in a broad sense, and Yongkang belongs to the manufacturing agglomeration circle of Jiangsu and Zhejiang.

Such a geographical location means that Yongkang has a developed transportation network, and its products have advantages in transportation costs, whether for export or domestic sales. It also has advantages in policy, supply chain and other aspects.

In the manufacturing agglomeration circle of Jiangsu and Zhejiang, regional development is very advantageous. For example, Yiwu City around Yongkang has developed into the world’s largest small commodity distribution center city. This is one of the underlying logics.

In addition to the hard condition of geographical location, the development of Yongkang’s thermos cup and pot industry is inseparable from its hardware industry chain advantages accumulated over the years.
Here we do not need to delve into why Yongkang developed the hardware industry in the first place and how its hardware industry developed.

In fact, many regions in our country have engaged in the hardware industry, such as Huaxi Village in Jiangsu Province, the “No. 1 Village in the World”. The first pot of gold for its development was dug from the hardware industry.

Yongkang sells pots, pans, machinery and spare parts. I can’t say that the hardware business is doing very well, but at least it’s not bad. Many private owners have accumulated their first pot of gold because of this, and it has laid a solid foundation for the hardware industry chain in Yongkang.

Making a thermos cup requires more than thirty processes, including pipe making, welding, polishing, spraying and other links, and these are inseparable from the category of hardware. It is not an exaggeration to say that the thermos cup is a hardware product in a certain sense.

Therefore, the transition from the hardware business to the thermos cup and pot business is not a real crossover, but more like an upgrade of the industrial chain.

In other words, the development of the Yongkang thermos cup and pot industry is inseparable from the hardware industry chain foundation accumulated in the early stage.

If a region wants to develop a certain industry, it is never wrong to take the path of industrial agglomeration, and this is the case in Yongkang.
In Yongkang and its surrounding areas, there are a very dense number of thermos cup factories, including larger factories and smaller workshops.

According to incomplete statistics, in 2019, Yongkang had more than 300 thermos cup manufacturers, more than 200 supporting companies, and more than 60,000 employees.

It can be seen that the scale of Yongkang’s thermos cup and pot industry cluster is considerable. Industrial clusters can save costs, help form regional brands, and promote mutual learning and progress and in-depth division of labor between enterprises.

After forming an industrial cluster, it can attract preferential policies and support. One thing to mention here is that some policies are introduced before the formation of industrial clusters, that is, policies lead regions to build industrial clusters; some policies are specially launched after the industrial clusters are established to further promote industrial development. You don’t need to go into detail on this point, just know this.

To sum up, there are roughly three underlying logics behind Yongkang becoming “China’s Cup Capital”. The first is location advantage, the second is the early accumulation of the hardware industry chain, and the third is industrial clusters.