It has become popular among young people to buy flowers for themselves

The existence of the self-pleasing consumption psychology has brought opportunities for the survival and development of flower e-commerce companies to a certain extent. Then, as consumers' acceptance of flower consumption increases, what kind of competition and development will flower e-commerce companies usher in? In this article, the author summarizes the development history of the flower e-commerce market. Let's take a look.

On an ordinary Friday, Cathy excitedly shared the flowers she bought online with her bestie, "This is the first time I bought this kind of peony, and it's really pretty."

As for buying flowers online, Cathy has never gotten tired of it since she had the experience. She buys from different platforms and changes them after keeping the flowers for a while. It is not a hassle.

The sense of ritual brought by a bunch of flowers will never go out of style. Flowers have always been considered a gift to express affection. Consumption behavior is basically concentrated in fixed occasions such as birthdays, anniversaries, Valentine's Day, Mother's Day, weddings, meetings, etc.

However, in the past two years, with the improvement of national income level and the increase of middle-class population, the concept of consumption upgrade has begun to be popularized in China, and consumers are paying more and more attention to spiritual needs. In this context, "self-pleasing consumption" has emerged, and flowers are no longer just holiday gifts. Young people are buying flowers for themselves and enjoying the happiness brought by a bouquet of flowers.

Flower consumption has evolved from a holiday ritual to an everyday indulgence.

According to iMedia Research data, 24% of flower e-commerce users buy flowers for themselves, nearly 40% buy them for their partners, and 69% buy flowers for daily household use.

Since January this year, the domestic fresh cut flower market has heated up significantly. According to data from the Kunming Flower Auction Center, the transaction volume from January 24 to February 8 reached 56.42 million branches, an increase of nearly 40% year-on-year.

Self-pleasing consumption has brought opportunities to the flower market and also made flower e-commerce flourish. More and more consumers are beginning to accept flower consumption. With the entry of major companies such as Hema, Meituan, and JD.com, a new round of competition has begun in the flower e-commerce market.

1. Flower e-commerce 1.0: Those who plant trees will enjoy the shade

When talking about flower e-commerce, there is one person who cannot be ignored.

Time goes back to 24 years ago. At that time, Guo Feng, who had worked in the technical development department of Changan Information (now Qujiang Culture and Tourism) for two years, had the idea of ​​starting a business. Thinking of the experience of sending flowers to his girlfriend in college, he decided to quit his job and build a website to sell flowers. This was also the opportunity for the birth of Salala Flower Network. At that time, Guo Feng hoped to build the website into China's "No. 1 online flower brand."

Initially, Guo Feng operated Shalala Flower Network out of interest, but as time went on, Guo Feng gradually developed his own ideas about the flower market, and the business began to become handy. As the logistics system at the time was not mature, it was not realistic to sell flowers all over the country. Shalala Flower Network only acted as a connector, connecting users with cooperative flower shops in various places through the website, and assigning the orders received online to the flower shops for packaging and delivery.

Due to everyone's novelty about buying flowers online at the time, coupled with Guo Feng's advertising offensive on NetEase, Sina, etc., Shalala Flower Network soon reached a small peak. On Valentine's Day in 2000, the website received 9,000 orders, three times more than the team expected.

In October 2001, Salala became a partner with Interflora, an international flower delivery organization, to achieve global delivery. On May 1, 2004, 800buy bought Salala Flower Network, hoping to supplement its own business chain, increase cash flow, and make itself more powerful to impact the capital market.

However, due to the lack of hope for listing, Salalala was sold to Zhiji Venture Capital two years later. Later, due to disagreements with the new investors, Guo Feng led the startup team to completely leave Salalala and started a new business.

At this point, the era of Shalala Flower Network belonging to Guo Feng has passed, but as the creator of flower e-commerce, he still has many followers. While Shalala is in turmoil, a group of new forces are born and join the competition.

In 2005, China Flower Network (www.xianhua.com) and China Flower Gift Network (www.hua.com), both of which have excellent domain names, were established successively. In the same period, there were also China Gift Flower Network, Colorful Flower Network, Aishang Flower Network, etc.

Including Huaji.com, which was established in 2007. Although it completely positioned itself as an "order transfer" platform, flower e-commerce companies during this period have never been able to move beyond the business model of Shalala Flower Network.

In the nearly 10 years of the 1.0 era of flower e-commerce, new business models have never emerged, while the drawbacks of the "order transfer" model have gradually been exposed. Not only is the quality of goods difficult to control, but a large amount of labor costs are also required to maintain merchants and consumers, resulting in the platform being unable to scale and difficult to become a leading brand recognized by the market and consumers. How to find a new business model and operating model has become a difficult problem that players in the field must overcome.

2. Flower e-commerce 2.0: Capital enters the market

It was not until 2015 that the 2.0 era of flower e-commerce arrived. In that year, Flowerplus and Huadianshijian were established successively.

Flower e-commerce companies have set their sights on the mass household consumption market since their inception, and are determined to cultivate the flower consumption habits of Chinese consumers. This is because, before this, Chinese people's flower consumption was only a specific ritual consumption at a certain time point.

When the domestic flower market was not yet mature, they entered the market with "Internet flower subscription" and used the "99 yuan monthly subscription, one flower per week" model to be the first to capture the daily flower purchasing needs of white-collar workers in big cities, completely breaking the original model of flower e-commerce.

The emergence of new business models has revitalized the flower e-commerce market, and this period has become a highlight for the flower e-commerce industry. Various brands have entered the market one after another, and the capital market has also set off a wave of investment.

With the introduction of Qingshan Capital, Huadianshi obtained the first angel round of Internet investment from celebrity Gao Yuanyuan, and then introduced Lu Han's fund, becoming the talk of the town.

ROSEONLY, which specializes in luxury flowers, also became popular thanks to celebrities. Yang Mi, Jimmy Lin, Kun Ling, Zhang Ziyi and others have all posted photos of its flowers on Weibo.

At this time, The Fauvism seemed to be inspired, and relied on the flowers from the weddings of celebrities such as Huang Xiaoming, Zhou Xun, and Ruby Lin to sweep half of the entertainment industry and successfully break out of the circle.

Ai Shang Flowers even directly entered the capital market, entered the New Third Board, and won the title of "the first flower stock".

In 2018, Flo Garden emphasized the slogan "Take a bouquet of flowers home after get off work" and entered the flower industry with its "unmanned flower container".

The financing situation in the capital market was enough to prove the popularity of flower e-commerce at that time.

According to media reports, 2015 was the peak period for the financing capacity of the flower e-commerce track. In one year, there were 22 investments in related fields, with an amount of up to 958 million yuan. In 2016, there were 7 financing activities. In the second half of 2017, the overall growth rate of the industry slowed down significantly, the reshuffle accelerated, and the publicly disclosed financing news decreased year by year. There were only 4 financings in 2017, 3 in 2018, and only 2 in 2019. In 2020, there was no financing news.

In fact, the glory of the brands in the era of flower e-commerce 2.0 did not last long. The industry ushered in new challenges and reshuffles, and a new market pattern was about to emerge.

3. 3.0 era: Is there no future for vertical flower e-commerce?

Flower e-commerce has grown from nothing to a market size of nearly RMB 100 billion after more than 20 years of development. According to statistics from the China Research Institute, the domestic flower e-commerce market size was only RMB 16.88 billion in 2016, but exceeded RMB 50 billion in 2019, and reached RMB 89.69 billion in 2021. It is expected to exceed RMB 150 billion in 2025.

Capital is often a direction indicator for the industry. The frequent entry of capital has made the flower e-commerce track popular and the competition has become increasingly fierce. A track with a scale of hundreds of billions of yuan naturally requires the participation of Internet giants.

In July 2018, Meituan Dianping launched its Meituan flash purchase business, which covers categories such as flowers and green plants, with door-to-door delivery within 30 minutes and 24-hour delivery. Around 2019, e-commerce giants such as Taobao and JD.com launched their own flower businesses, laid out online flower retail, and opened local express delivery services.

In October 2020, Dingdong Maicai launched its flower business. In March 2021, Ele.me launched a corporate flower ordering service, and in April, Daily Fresh launched a flower express delivery service. In May 2021, Hema announced that its flower brand would be upgraded to "Hema Garden", forming an integrated online and offline "Flower Market Around You". To ensure a stable supply of flowers, Hema adopts the method of direct purchase from the place of origin. In Yunnan Province alone, Hema has 14 flower bases.

After the emergence of Internet giants, the market share of vertical flower e-commerce has been squeezed. All parties are working together, and price wars are inevitable.

The entry of a number of fresh food e-commerce platforms has made buying flowers as easy as buying vegetables. Water lilies for 9.9 yuan for 8 stems and peonies for 19.9 yuan for 10 flowers are everywhere. Not only are the prices preferential, but they can also be delivered directly to your door.

The financing obtained by Huajia and Huadianshijian is obviously incomparable with that of the fresh food e-commerce platforms that are backed by big companies and have strong strength. The latter can not only afford subsidies and losses, but also get flowers at lower prices through large-scale procurement, and have unparalleled bargaining power once they go online.

In addition to the pressure from online platforms, vertical flower e-commerce companies also face pressure from offline platforms. The flower stalls wandering around subway entrances and shopping mall entrances are their competitors, and flowers selling for 10 or 15 yuan a bunch can be seen everywhere.

Whether online or offline, the reshuffle of the flower e-commerce industry is still ongoing. How can vertical flower e-commerce companies break through?

Starting from the supply chain, we grasp the upstream suppliers, seize the bargaining power, and achieve stability in production capacity and quality.

Take Flowerplus as an example. It has built its own supply chain to reduce turnover links, and adopted the model of contracting flower fields and harvesting flowers at the place of origin, which has become its differentiated competitive advantage. Consumers can buy flowers directly from the place of origin through the method of "online subscription + direct delivery from the place of origin + value-added services".

Huadianshijian optimizes and upgrades the flower supply chain through technological means, applying the Internet and industrial management thinking to the flower industry. In order to realize the visualization of the supply chain, Huadianshijian introduced an information management system, covering the entire process of design, procurement, arrival, quality inspection, sorting, transportation, processing, and delivery. In addition, the logistics turnover box co-developed by Huadianshijian has tracking and preservation functions, which can realize the smooth circulation of cold air during transportation.

In addition, starting with brand positioning and entering the "small but fine" high-end market may also be a "breakthrough" option.

Take The Beast as an example. It focuses on the high-end gift market. Relying on the unique marketing point of "Flower Story" and offline stores, it continuously expands its product line to everlasting flowers, jewelry, fragrances, household items, and artworks, and is committed to meeting the gift-giving needs of some people who pursue high quality.

Vertical flower e-commerce companies are different from fresh food e-commerce companies. The former can maintain stable interaction with users through the form of one flower per week or membership binding. At this time, merchants can seize the opportunity to increase the frequency of user consumption. For example, in the week before the festival, you can attach a bouquet of holiday flowers and a quick ordering method, so that the holiday flowers can be delivered to users along with the one flower per week. While increasing user consumption, it can also improve the user experience and increase user stickiness.

"I think flowers are a gift from nature to mankind. Having flowers that correspond to the season is the happiest thing." Cathy has already started thinking about which flowers to buy next time, and is researching which platform will be more cost-effective and fresher.

Whether there are big brands or not, this does not seem to be something that consumers care about. The joy brought by flowers is direct and warm, whether it comes from an exquisite gift box or a small cart next to a subway station. Different needs have corresponding choices.

Author: Kyra; Editor: Ray

Source public account: Tidal Business Review (ID: daily-case), focusing on mass consumption, TMT and financial sectors, sharing interesting business reviews and business insights.