Santa’s workshop isn’t actually in the North Pole—it’s in Yiwu, China, where 60 percent of the world’s Christmas items are produced. As The Guardian reports, the city just outside of Shanghai is home to 600 factories, which assemble mass quantities of festive baubles, fuzzy Santa hats, and every other imaginable Yuletide decoration or accessory.

The items are sold in the local Yiwu International Trade Market, which is the “world’s largest small commodity wholesale market,” and the market exports the holiday goods across the world. Eventually, some of them land on the shelves of local retailers near you.

Over the past few years, Yiwu International Trade Market has faced competition from online retailers like Alibaba and Made In China, and the e-commerce giants now have the upper hand. Still, the demand for Yiwu’s Christmas merchandise remains high domestically. According to The Guardian, Chinese residents are starting to celebrate the holiday.

[h/t The Guardian]