More than perfect educated guess

In 2002, Ye Changhua gave up his job as a public servant in Yunhe and started his own business manufacturing wooden toys.

In Yunhe, new wooden toy manufacturing companies are established every month. Ye's was just one of hundreds in the county.

So why did he quit what is regarded as a secure job that tens of thousands of college graduates dream of having, to invest in an industry that practically everyone is doing?

He says it was because he had a unique insight into the industry, and followed it through to make his company one of the most successful in the country.

Perfect Educational Toys Co is China's largest manufacturer of children's educational wooden toys and of Montessori educational materials in terms of sales revenue.

But Ye is far from satisfied. His ambition is to establish a pre-school educational system including educational toys, furniture and teaching methods.

"In today's market, those who sell ideas and concepts will last much longer than those who merely sell products," Ye says.

As a native of Yunhe county, Ye has seen the development of the industry grow since his childhood in the early 1970s.

"After I went to work as a public servant in the 1990s, I had been wondering what is the most sustainable development direction for this industry and how these products should position themselves," he says.

By 2000 Ye figured out that the children's preschool education market had great potential.

"Parents nowadays are willing or even want to spend money on their children's preschool education, but how to approach this market and with what kind of product were two big questions," he adds.

Ye's business opportunity came in 2002 when a friend asked him to look for a wooden toy manufacturer that could make a 13-piece set of Montessori educational material.

The order came from a customer in South Korea who said that such materials were highly sought after in his country and he would take as much as Chinese manufacturers could produce.

Ye checked every factory in the county, but no one could undertake such an order.

"This set of educational materials looked very different from any traditional wooden toys that anyone in our county had ever seen. Then I thought, why can't I take the order myself?"

At the time, he did not even know how to set a price for the product, because he didn't know how much it was going to cost. Nevertheless, he quit his job, recruited workers and opened a factory.

After a month, they produced 100 sets for his South Korean client. He sold each set for 550 yuan ($90; 67euros), although the true cost was more than 670 yuan a set.

However, satisfied with the products, the South Korean client continued to place orders for the following seven months. In the second month, Ye produced more than 1,000 sets, and at the end of the contract says he had made a profit of more than 1 million yuan.

The experience also laid a solid foundation for Ye's Perfect Educational Toys company to grow into the largest manufacturer of Montessori educational materials in China.

When other people were praising and envying his success, Ye made another bold decision. He ceased the company's export business to focus on developing preschool educational systems.

Last year he established a research and development team in Beijing, headed by pre-school education expert Wang Dongyi. The team worked out a whole educational and games system for kindergartens in China.

Perfect no longer sells single sets of educational toys, but whole teaching system packages, by which any house can be turned into a kindergarten from scratch.

In August, 13 kindergartens in Xi'an of Shaanxi province signed deals with Ye to introduce this system.

He says that while the change in business focus has reduced the company's annual sales revenue from 70 million to 10 million yuan, he is confident about the future.

"Once the platform is well-established, the growth of sales revenue is a very natural thing," he says.

To support his business, Ye's younger brother and sister have both quit their own jobs to join the company.

"He is very quick-minded and always thinks at least one step ahead of others," his sister Ye Hong says.

yanyiqi@chinadaily.com.cn

(China Daily Africa Weekly 10/11/2013 page16)