Cultivating customers
The market share of daily flower consumption in China remains very low. Experts said the industry is still in the early stages in the country, as more customers need to be cultivated. In the United Kingdom, the Netherlands and other European countries, more people buy flowers as an everyday item than as a gift, with the former representing nearly 60 percent of the market.
Cost and supply chain factors remain the major difficulties for online flower retailers planning to expand.
"The launch of offline stores, which also serve as logistics transit centers, will enhance the delivery efficiency of e-commerce flower companies, reduce the cost of long-distance transportation and provide more on-site experiences for customers," said Lu Zhenwang, CEO of Shanghai-based Wanqing Consultancy.
"Online flower retailers must combine their online and offline sales channels," Lu said, adding that the growth of stores in central business districts will meet demand among white-collar workers.
Zhuang Shuai, a senior expert at the China E-commerce Association, said flowers are low-frequency consumer goods and managing the supply chain remains difficult.
Flowerplus, which is backed by venture capital firms and has already completed several rounds of funding, has invested heavily in logistics and distribution.
So far, the company has established 800 hectares of flower fields in China, seven intelligent constant-temperature warehouses and a 50,000-square-meter modern processing factory. It employs more than 1,000 workers.
"We have cooperated with more than 4,000 quality suppliers, which include leading domestic breeders and growers. The average daily purchase volume reached 1.5 million flowers in 2017, and the monthly shipment of flowers amounted to 3 million boxes," said Zhang Yu, a partner and vice-president of the supply chain department at Flowerplus.
Zhang said the company has established a full supply chain management and control system, which means temperature and humidity can be controlled throughout transportation, and the whole process can be monitored.
"We have developed China's first automatic processing line from the picking of fresh flowers to distribution. In addition, same-day delivery can be completed within one hour," Zhang said.
Market growing fast
Statistics from internet consultancy iiMedia Research Group showed the market scale of China's e-commerce flower industry reached 23.55 billion yuan in 2017. It forecast the market will grow 55 percent year-on-year to 36.6 billion yuan this year. It predicted growth to soar 70 percent in 2019, to hit 62.2 billion yuan.
At present, Flowerplus has more than 12 million registered users, with its total sales revenue reaching 800 million yuan in 2017. It also provides floriculture lessons.
It finished its latest round of fundraising in July. According to the company, the funds will be used to strengthen its supply chain system, deepen cooperation with large fresh flower growers, introduce new flower species and upgrade its consumer service.
Zhang said he is bullish on the e-commerce flower sector. He said that with the formation of new consumption habits and the maturity of infrastructure facilities such as cold-chain logistics, the market volume of China's e-commerce flower industry could reach 50 billion yuan by 2021.
Lu from Wanqing Consultancy said given the consumption upgrade, the future of China's e-commerce flower market is very promising. The improvements in logistics, especially cold-chain logistics and quality control, will further fuel the development of flower e-commerce, Lu said.
