The main location for flower production in China is located in the province of Yunnan. Decades ago people would only be able to find undeveloped small villages in that area. However, since the agreement with the International Chamber of Commerce at the beginning of the 90’s, the Chinese flower producers have been trained and learned several techniques in order to compete with the global competition of the flower industry. The sector has developed rapidly with the growth of the economic development and the rise of Chinese people’s incomes. In 2015, China is valued at more than $11 billion, according to China Horticultural Business Services.
In 2013, around 800,000 farmers in Yunnan province that grew flowers on 70,000 hectares of land, and the industry employed more than 3.5 million people in 2014. Asia is already the most important market in terms of for the Chinese producers. However, their direct exportations, as well as the re-‐exportations through the Dutch market of Aalsmeer, reach the entire world.
the Flower Industry in China
Flowers have always been a part of the Chinese culture since at least seven different types of flowers represents a strong meaning in the culture. They represent natural nectar that brings growth, fulfillment and new, prosperous beginnings to lives. Furthermore in Fen Shui, many flowers are said to bring good fortune and success because healthy flowering plants manifest good Chi or energy.
Flowers for Special occasion
Chinese consumer’s preferences
The demand is driven by the development of the urban landscaping, in the need to improve the environment and thereby the quality of life. The demand has also increased a lot from the Chinese citizens that have shown a steady increase.
Indeed, it is important to know Chinese consumers’ preferences in order to adjust in time the supply of the variety of flowers, in terms of color, varieties and way of distribution. For a special occasion such as Chinese New Year, flower sellers craft abundant bouquets, pots and arrangements especially Orchids, peach blossoms, plum blossoms or peonies. Every single flower has a particular meaning for Chinese people. Orchids, for example, are nowadays a valuable gift in this season since they are considered as delicates, beautiful and elegant flowers, as well as symbolizing the fertility and abundance. With the development of the country and the appearance of the middle class, more and more Chinese buy and give flowers as a gift. It is a trend that has also been expanded to the decorations for parties, events or hotels. It has become very popular and even compulsory to decorate the traditional wedding ceremonies and important events using flowers. Even though flowers have always been a part of Chinese tradition for weddings, today it is more the symbol they represent that matter the most.
How Daxue Helped its Consumer
We helped a producer to develop a new corporate strategy for its entry in the Chinese market. We identified the opportunity and threats of its business unit and then used that information to develop a cohesive, integrated strategy in China. The financial model created projections that is helping the company target a profit growth in the next five years.
A survey conducted for the client, made in 4 different cities in China, bhas shown that the flower consumption in China is really diverse, each city has his own preferences:
- Guangzhou: lawn grass, seeds, seedlings
- Chongqing: edible and medical flowers, flowers for industrial use and other purposes, seed bulbs
- Shanghai: ornamental seedlings
- Nanjing: lawn grass, seed bulbs, seedlings
White flowers are not usually used since it is associated with death for the Chinese. Peonies and lotus are some of the flowers that are the most requested for special events. The choice of flowers is still influenced by its cultural meaning.
And the main flower consumption in terms of amount is as follows:
- 33% from the government
- 30% from the enterprises
- 37% from individuals
Exportation from China
Despite a thriving domestic market for flowers, exports remain a challenge for many countries within Asia. China has managed to stand out as an international producer. With only a few years in the international background, the country has increased their exports to 90 million USD. Thanks to the low cost of the workforce as well as the availability of the land (the oriental giant has around 636 hectares cultivated) even though they have allocated a part of the production to their internal market.
The great results have to deal with the collaboration of the International Chamber of Commerce in Yunnan. They have settled a strategy for the exportation of flowers as well as implementing a teaching and training method to the Chinese farmers, helping them to gain knowledge and use higher technological tools. Another measure that has been taken is the investment of around 26 million USD for building an auction market and a logistic center. All of these measures have helped the market to develop rapidly, in a period of four years, with a 400% increase in the exportations of cut flowers.
Nowadays the benefit of the flower market is divided into three sectors: people that control the business from the production to the distribution; the auctioneers and lastly the financial backers. For foreign companies that would like to enter the market it is important to differentiate the flower supply per city, per period of the year with the Chinese festivals and per market segments (Weddings, conferences etc…).
As one of the countries in the world with the richest resources in wildflowers and floriculture plants, China is renowned as the “Motherland of World’s Horticulture”.
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To know more about the floriculture market in China, contact us at dx@daxueconsulting.com
