The data in the world tobacco development report once showed that in 2015, the global sales of e-cigarettes had reached 8 billion US dollars. More professional analysis, the global e-cigarette market will grow at a double-digit rate in the next few years.
At that time, Luo Yanling worked as a technical general manager and director of marketing. When he saw these figures, he decided that the industry would break out quickly. So, in June 2016, he founded the electronic cigarette company Yun Chuang Hi Tech, and got a 2 million yuan angel financing before a startup.
Nowadays, Yun Chuang Hi Tech is a high-tech enterprise integrating R & D, design, production and sales of electronic cigarettes. It has a 100 thousand class clean workshop of about 2500 square meters, providing customers for more than 70 countries and regions in the United States, Japan, Russia, Germany, Britain, France, South Africa and so on. It is worth noting that Yunchuang Hi-Tech’s unique purple sand ceramic core technology has solved the two major technical pain points of electronic cigarette industry: taste and e-liquid leakage.
In April of this year, Yun Chuang Hi Yech closed the 6 million yuan Angel + round financing, which was invested by its founder partners of Guojin Investment and former executives of Tencent. According to Luo Yanling, in 2018, Yunchuang Hi-Tech’s sales reached 40 million yuan, and in August this year, it had just fulfilled the orders worth 80 million yuan.
Business ambition created by industry development
On June 6, 2016, Luo Yanling received a client. Born in 1988, the customer started a business team. With the dividend of the blowout development of electronic cigarette, the company delivered goods by electric bicycle from several people to 200 million sales in the next year.
They exchanged many ideas with each other, which inspired Luo Yanling deeply. Above all, this conversation helped him make up his mind to turn the business from idea to action.
Luo Yanling believes that he is not inferior to others. With his understanding of the electronic cigarette industry, his experience in research and development, production and market of electronic cigarettes, as well as his various resources in the industry, he is confident that he will do better.
Before starting a business, Luo Yanling had worked in the electronic cigarette industry for many years. In 2012, he joined Smoore, led the technical team to participate in the research and development of the early version of ceramic core, and also participated in the formulation of the company’s strategic plan. In 2015, as the company urgently needs a group of technical professionals to maintain customers, Luo Yanling led the team to the market.
In addition to feeling the prospects of the industry, Luo Yanling, a senior smoker, is more hopeful to help smokers find a less harmful way to smoke.
In June 24, 2016, he submitted his resignation and founded the Yun Chuang High Tech company. Before his establishment, one of his executives was willing to invest 2 million yuan in angel investment.
At the beginning of its establishment, Yunchuan positioned itself as a technical service provider. With the technical advantages of the team, Yunchuang provided customers with electronic cigarette design solutions, and did not participate in production.
However, it was not long before Luo Yanling found that such companies were not strong enough to take over business, and many customers abandoned cooperation when they saw the size of the start-up company. Even if they have the industry background and ability, it is very difficult to do the company’s output value.
Starting a business is a process of trial and error. In 2017, Luo Yanling decided to transform Yunchuang High Tech into a high-tech enterprise integrating research and development, design, production and sales of electronic cigarettes.
In order to cope with the transformation of the company, Luo Yanling paid a lot of money to recruit many talents from Apple, Smoore, Find the right direction, with the complement of the short board and the optimization of the company’s business, Yunchuang has gradually entered the right track. In 2017, the company has achieved a balance of profits and losses, with sales of 20 million yuan in that year.
Compete with Smoore by strengthening the technical barriers
“Although we compete with Smoore, we have our own advantages on the basis of it. We can even say that in ceramic core, we have outraced them already.” Luo Yanling said.
He introduced that the unique purple sand ceramic core technology of Yunchuang has the characteristics of fast heating, high efficiency atomization, uniform heating and non-burnt core. This technology breaks away from the limitation of the traditional coil heating wire, enlarges the heating area and improves the overall uniform heating performance of the atomizing core.
In terms of using experience, Yunchuang has also made innovations in technology. Compared with the traditional cotton core and ordinary alumina ceramic core, the metal atomization technology of purple sand ceramic core can increase the smoke volume by 53% and the output efficiency of nicotine by a large margin. The TPM constant smoke volume control technology used by Yunchuang enables users to keep the same taste and smoke volume from the first to the last, which is extremely consistent.
“Such products are more similar to the taste of traditional cigarettes, and bring users a direct and intense smoke stimulating throat experience, as well as a full and real taste.” He explained that for traditional smokers, this is also an important point in finding alternatives to cigarettes.
In addition to the taste problem, vape juice leakage is also a matter of great concern to users. To solve this problem, Yunchuang’s products adopt the exclusive COP e-liquid core separation patent technology. “Under normal circumstances, our products can never leak e-liquid.” Luo Yanling said, “Yunchuang promises to pay a penalty of 10,000 yuan a day late, 1,000 yuan for e-liquid spill, and respond to customers in 30 seconds.”
As of May 31, Yunchuang has applied for 20 patents, including 13 authorized patents and 4 patents for invention.
Luo Yanling said that after three years of development, Yun Chuang has been a national high-tech enterprise with independent research and development and intelligent innovative manufacturing. It has a one hundred thousand class clean workshop of about 2500 square meters, and its products have been sold to more than 70 countries and regions such as the United States, Japan, Russia, Germany, the United Kingdom, France and South Africa.
Nowadays, Yunchuang has established in-depth cooperation with customers at home and abroad, such as Xiaomi Eco-chain, G5, etc., and has also jointly developed with TCL, Super Captain and other companies.
In the supply chain, Yunchuang carries out fine management, establishes 4B supplier selection criteria, carefully selects the top ten suppliers in the industry, carries out monthly evaluation of suppliers, establishes supplier classification system, and adopts equity cooperation for excellent suppliers.
In the past two years, Yunchuang as begun to focus on the operation of domestic channels, and recruited many talents with rich practical experience in business model design, Internet promotion, market operation, sales team incentive management, and organizational culture construction.
According to Luo Yanling, in 2018, Yunchuang sales reached 40 million yuan, and last month, Yunchuang just completed an order of 80 million yuan.
Be a down-to-earth technician
Luo Yanling disclosed that Yunchuang is currently conducting a new round of financing at a valuation of 300 million yuan, and two institutions have been negotiating about it. After this round of financing, Yunchuang is mainly prepared to invest in technology development and intelligent upgrading, and expand its competitive advantage.
In terms of technology, at this stage, Yunchuang is still developing new herbal vape juice. This month, an agreement was signed with the doctoral team of Harbin Institute of Technology to invest 2 million yuan to accelerate the application of new military nanomaterials in the field of electronic cigarettes.
Whether it is the Smoore, or YunChuang, for OEM based suppliers, Luo Yanling believes that in the future, the competition in this industry will be more intense, and even the traditional hardware giant will enter the game. By that time, the existing industry players will be vulnerable.
“If we want to survive, we must keep crisis awareness, strengthen innovation, and establish our own technical barriers and improve the level of intelligence as early as possible.” Luo Yanling also said that this does not mean that the OEM will disappear, but will become highly concentrated.
At this stage, some voices believe that the game among the electronic cigarette industry is no longer a simple game between brand and brand, product and product, but is becoming a comprehensive war of “up to capital coverage, resource accumulation, down to distribution channels, operational capacity”.
Electronic cigarette industry will give people this feeling, behind this is the “Internet party” and “technology party” two clear group began to affect the whole industry trend.
As a typical technology party member, Luo Yanling said that after entering the industry, it is actually helpful to the industry. But as an e-cigarette practitioner, he insists that e-cigarettes are ultimately a product, or depends on quality, technology is the strongest competitiveness. “No matter how strong the propaganda is, how strong the advertising and endorsement are, if the product can not keep up with it, it is not conducive to long-term development.”
He hoped that the industry brands could introduce more excellent technology, everyone calm down to do a good product, together to promote better development of the industry.