Fly the Sky Lantern to the World

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28-year-old Liu Pengfei now runs a sky lantern business in Yiwu, the world’s largest wholesale market situated in Zhejiang where you can find almost anything you want to buy. He started his export business with 400 yuan as capital in 2007 shortly after his graduation from collage. Today he sells his sky lantern worth 70 million a year to 70 foreign countries and regions and employs 2,000 people.

Born into a family of poverty in Ningdu County, Jiangxi Province, Liu Pengfei was raised by his brothers and sisters as their father died in his prime years. Shortly after he graduated as a finance major from a collage in his home province, he and his girlfriend came to Yiwu in the hope of finding a way to make a fortune.

He worked as a salesman in a trade company and made 1,400 yuan a month. He quit after a month and said he wanted to get started on his own. His colleagues shook their heads, thinking he didn’t have money and didn’t have technology, how could he survive?

They did not know that Liu Pengfei had a product. The product was sky lantern. The young entrepreneur thought there was a huge market but there were not many producers. One evening he and his girlfriend were taking a stroll in a park in Yiwu when they saw flying objects over a lake. The objects glowed in the dark sky. Fascinated, Liu rushed over and found these flying objects were sky lanterns made of paper. The curious young man wanted a sky lantern of his own to fly into the night sky.

The next morning he went to the huge market. But to his disappointment, only two businesses sold the product and he bought one. The world’s largest wholesale market has 58,000 shops that combine to market more than 400,000 kinds of products, but there were only two shops selling sky lanterns? He saw an opportunity.

In the following days, he studied the product and the market. The sky lantern in China is also known as Kongming Lantern presumably invented by Zhuge Liang, the famous prime minister of the Shu Kingdom during the Three Kingdoms period (220-280). When Liu was doing the market research, the Chinese flying lanterns had soared their way into the skies of the western countries and some Southeast Asian countries even celebrated a sky lantern festival.

Liu bought 100 sky lanterns with 400 yuan and opened an Internet shop. For a week, he did not have a client. Some friends concluded that the product had no future and urged Liu to come back to the trade company. Liu persisted. He marketed the lantern in every way he could imagine and afford online. Orders began to arrive. In the first month, he sold about 3,000 and made a net profit of 4,000 yuan. He was pleased. He marketed more and got more orders. He soon got big orders and he had his lanterns made in other people’s factories. Six months later, he had 60,000 yuan in his bank account.

In early 2008, a trade company in Wenzhou contacted him, asking him whether he could supply 200,000 sky lanterns. Liu Pengfei thought it was his big opportunity. But the trade company soon found that his was just a new and small sales outlet and ignored him. Liu was not to be deterred. He tried for two months to convince the trade company that he was able to deliver the order. So the company informed him that someone would come over to see his office and factory. Liu did not have an office and did not have a factory. So he decided to borrow space as if they were his own. After all the arrangements had been made, however, Liu became uneasy about the lie.

On March 21, 2008, the customer arrived. Liu Pengfei decided to tell him the truth. He said he did not have the office and the factory, but he was able to do the job. Touched by Liu’s honesty, the customer decided to give Liu the contract.

The first order was nearly 50,000 sky lanterns. Liu Pengfei knew it was hard to order them from other manufacturers. So he decided to set up his own factory. With the support of his brother, Liu Pengfei set up a factory at his home village. With the support of his family, Liu Pengfei made 200,000 and made 100,000 yuan.

In July, 2008, Liu Pengfei founded his own company to run the business. His girl friend and his good friend Wu Daojun resigned their jobs and joined him. Liu Pengfei was in charge of sales. His girl friend supervised production and Wu Daojun was in charge of buying raw materials. In the next seven months, the company made and sold more than 4 million sky lanterns.

At the end of 2008, the manufacturers of sky lanterns in China had grown from 10 to more than 100. None of them was large, but competition was fierce. Liu Pengfei decided to explore overseas markets. After trials and errors for a short period of time, Liu Pengfei learned how to market his product to foreign buyers. He advertised the keywords of his product at the country’s largest business websites and search engines such as Google, Baidu, and Alibaba. Unlike his competitors who usually advertise only one or two keywords, Liu Pengfei designed and advertised 210 key words, including all possible names of the sky lantern and even including misspelled words. And they are in different languages. He wanted to make sure that anyone could find him through his foolproof keyword advertising system.

Prospective buyers from dozens of countries soon found him. In 2009, buyers in France alone ordered 4 million sky lanterns. When orders began to come in from overseas, Liu knew he needed to expand his production fast. When a German buyer ordered 1.5 million sky lanterns, Liu was able to produce 5,000 a day. He needed to produce 20,000 a day to make the delivery on time. He tried to find a factory that would work with him to produce lanterns. After making numerous phone calls he finally located a business man in Jinhua who had just delivered an order and his large factory happened to be idle for the moment. Liu had a deal with the factory to use its manpower, machines and space. In the next 45 days, Liu Pengfei moved to the factory. He lived there to make sure quality and quantity would meet his requirements. The delivery was made on time, but he was hospitalized. But fortunately, his business flourished and he made big money.

In September 2009, an English customer who lived in Yiwu, came to Liu Pengfei and asked if Liu could print patterns on lanterns. It turned out that the English buyer wanted to sell sky lanterns to South Africa. Liu’s samples, though, were not up to the requirements. He tried again and again. Finally, Liu and his colleagues found a way to print colored patterns and words on the fire-proofing paper. With this technological breakthrough, the samples were confirmed and 50,000 sky lanterns were delivered. Liu Pengfei made a great quantity of sky lanterns for the 2010 FIFA World Cup in South Africa.

Within two years, Liu Pengfei has skyrocketed from rags to riches. His company runs three factories that make sky lanterns and one printing workshop. Of the fifteen colleagues who helped Wu start the business, many are now millionaires.

What is his secret of success? Liu Pengfei says that you need a brave heart. Many who have failed largely because they did not have a brave heart.