Seizing the opportunity of her economy and Valentine's Day, is there a promising future for "e-commerce flowers"?

As living standards improve and young consumers pay more attention to the quality of life, consumption is changing from survival-oriented consumption to experience-oriented consumption, and the flower market has attracted attention. With the rise of new retail, whether online or offline, flowers have gradually changed from gifts to a manifestation of an elegant lifestyle. Let's take a look.

The arrival of Western lovers has boosted the flower retail market in various places. In fact, as early as after New Year's Day this year, the domestic fresh cut flower market has continued to maintain high prices. Starting from the second day of the Chinese New Year, flower prices have risen again, and the high price period has come more than a week earlier than in previous years. The good market for Valentine's Day has begun to emerge. At present, the price of a single bunch of high-quality mainstream red roses has exceeded 100 yuan.

Regarding the market outlook for Valentine's Day in 2023, industry insiders said that the high prices are just "normal", but it would be difficult to see the "sky-high priced roses" of the past two years.

01 The rose economy will remain strong in 2023

Roses leave fragrance on people's hands, and a branch of spring is sent to the people of Longtou. Throughout history, both in China and abroad, the tradition of giving flowers has always been tied to deeper emotions, such as kindness, longing, farewell or admiration. Even if roses are expensive, it cannot stop the "passion of lovers."

Roses, which arrived as promised in 2023, ushered in a sales peak on Valentine's Day . Offline chain supermarkets saw the opportunity of flowers and quickly got involved. In addition to Sam's Club and Hema Fresh, Metro also entered the flower market in December last year, and the purchasing volume continued to upgrade, from more than 30,000 branches per week before the New Year to more than 70,000 branches, an increase of nearly 3 times.

Since New Year's Day 2023, the domestic fresh cut flower market has maintained relatively high prices. Starting from the second day of the Lunar New Year, flower prices have risen again, and the high price period has come more than a week earlier than in previous years. The good market conditions for Valentine's Day have begun to emerge. At present, the price of a single bunch of high-quality mainstream red roses has exceeded 100 yuan.

At present, the industry is generally optimistic about the Valentine's Day "flower" market. The flower shop owner said: "It is obvious that the market is warming up. Flower shops in the north have already started to prepare stocks, and those in the south have also started one after another. This year's Valentine's Day started high and ended high, and the market demand is huge."

The hot market during the Lunar New Year has indeed given terminal sellers confidence. This year's Valentine's Day falls on a weekday far from the Spring Festival, which has also greatly increased the demand for gift flowers, becoming a booster for sales. Li Zhijun, deputy director of the auction department of the Kunming International Flower Auction and Trading Center (KIFA), also predicted that the peak volume of the Valentine's Day auction market this year will be between 4 million and 4.6 million flowers per day, which is basically the same as the data of the previous year.

Flower prices continue to remain at a relatively high level, which has had a significant impact on some live-streaming e-commerce companies that rely on "low prices" and "large quantities" to seize the market. The price of a bunch of medium-quality roses is currently over 40 yuan. For merchants who offer a variety of flower materials at "19.9 yuan free shipping" or "39.9 yuan free shipping", the volume of transactions will be greatly affected in the short term.

As Valentine's Day approaches, the transaction volume and price of roses have risen sharply. According to KIFA transaction data, the average price of roses of grade A on February 5 was 9.06 yuan per rose, grade B was 8.68 yuan, and grade C was 7.69 yuan. The prices of each grade in the same period last year were 10.41 yuan, 9.61 yuan, and 7.98 yuan per rose, respectively. Although the price has dropped significantly year-on-year, it has risen by more than 10% compared with the previous week. In terms of variety structure, red and pink are still the mainstream on Valentine's Day.

"Corolla" ranks first among red rose varieties, and the price of each bunch of products in the same grade is mostly between 40 and 110 yuan. As the sales peak arrives, the price will continue to rise. "Gaoyuan Red" is durable in storage and transportation, and the variety is relatively new. Most of the growers are large bases with good facilities. The price exceeded 100 yuan nearly a week earlier than "Corolla". At present, the price of high-quality AB-grade products exceeds 120 yuan per bunch.

The price of the "Snow Mountain" series was 30 to 50 yuan per bunch in early February, but has now risen to 40 to 105 yuan. The price of "Diana" has reached 60 to 115 yuan per bunch. The prices of high-quality flowers of varieties such as "Pride", "Lotus", "Cappuccino" and "Fire Bird" are mostly between 90 and 180 yuan per bunch.

The above is a microcosm of the booming flower business on Valentine's Day in 2023. Flowers have a price, but the thoughts are priceless. Users choose to pay for love. On every day that can be linked to feelings, the premium of the product itself seems insignificant, and consumers are more willing to accept it.

It is no wonder that the sales level of flowers on e-commerce platforms always reaches new highs every year. Therefore, when you open e-commerce platforms such as Meituan, JD.com, and Dingdong Maicai on Valentine's Day, flowers will occupy at least one major page.

On February 14 last year, Meituan set up a no-threshold flower red envelope, JD.com launched the slogan "The whole city is in love, express delivery for love", and classified flower products according to different combinations of flower numbers, and HEMA launched the "Romantic Confession Season" event, linking the marketing of flowers, baking, chocolate and other categories.

Daily Youxian’s flower sales are also connected with sweet foods such as chocolate. Before noon, Dingdong Maicai’s flower page showed that its red roses, pink roses, everlasting flowers and other categories of flowers were sold out and needed to be restocked.

02 E-commerce is a “flowery” road that blooms all the way

Flowers used to be given to lovers on Valentine's Day, but in recent years, the situation has begun to change. More and more people buy flowers for themselves, transforming flowers from gifts to consumer goods. The lively and bright lisianthus can add a natural flavor to the 996 office desk, the gentle rose can give workers a comfortable living room when they return home, and the plump buds of Catalina can give a small rental house in a big city a bright window sill.

As flower companies continue to expand their business and flower consumption scenarios become more diverse, they are attracting more potential consumers. According to the Ministry of Commerce's business big data, flowers and green plants are the fastest growing industry during this year's Spring Festival holiday , in addition to health-preserving New Year goods, clothing, shoes and hats, and the market size of " flower e-commerce " is growing exponentially .

According to statistics from the China Research Institute, the size of the domestic flower e-commerce market was only 16.88 billion yuan in 2016, but it exceeded 50 billion yuan in 2019. By 2021, it reached 89.69 billion yuan, and is expected to exceed 150 billion yuan in 2025.

The "explosion" of flower e-commerce is not only on the sales side, but also on the capital side. According to IT Orange data, there were more than 50 financing events in the flower e-commerce field from 2017 to 2021. Flower e-commerce companies represented by Huajia and Huadianshijian have not only welcomed financing, but also explosive growth in the domestic flower e-commerce market. The explosion of flowers has led to the increasing scale of upstream.

Data show that from 2010 to 2018, my country's flower planting area has generally shown a stable growth trend. According to data released by the State Forestry and Grassland Administration at the press conference of the 10th my country Flower Expo, by the end of 2020, the national flower planting area reached more than 1.5 million hectares.

This rapid growth, of course , also attracted the collective demise of e-commerce giants. Due to the impact of the epidemic, flower sales have moved from offline to online, and the flower market has become a new battlefield for many e-commerce platforms. Major Internet platforms such as Taobao and JD.com have bet on launching their own flower business, and fresh food brands such as Dingdong Maicai, Miss Fresh, and Hema Fresh have also joined the race.

In 2017, JD.com, which already had an advantage in delivery, took the lead in establishing a flower business department and focusing on online sales. In order to ensure that the flowers received by users are fresh and of excellent quality, they will first transport the "raw flowers" from the place of origin to JD.com's warehouses distributed across the country for rough processing such as pre-cooling, pricking, and packaging, and then deliver them to consumers through intra-city delivery. JD.com also launched the first flower insurance in the flower industry - the worry-free flower purchase insurance, which directly compensates customers online for situations such as broken branches and rotten petals that are visible to the naked eye.

Not to be outdone, Tmall also joined the battle and launched the flower category on Tmall Supermarket on the eve of Chinese Valentine's Day in 2020, accepting reservations. The reservation price for a pack of 10 red roses on Chinese Valentine's Day is 49.9 yuan, comparable to the daily sales price of retail channels. During the Tmall New Year Goods Festival in January 2022, it cooperated with 400 flower planting bases in Yunnan, Guangdong, Shandong and other places to move the "flower market" online, with direct delivery from the place of origin to the door, and the fastest delivery is the next day.

According to their plan, they will build their own cold chain flower distribution warehouses across the country in the future to provide consumers with hourly "flower delivery" services. The entry of a number of fresh food e-commerce platforms such as Hema Fresh, Dingdong Maicai, and Meituan Maicai has made buying flowers as simple as buying vegetables, with 8 water lilies for 9.9 yuan and a bunch of roses for 19.9 yuan.

These fresh food e-commerce platforms, which are backed by powerful big players, can not only afford subsidies and losses, but also use large-scale procurement to get flowers at lower prices, and have unparalleled bargaining power once they go online. Public data shows that after entering the flower e-commerce market in November 2020, Dingdong Maicai's flower sales have maintained a high growth rate of more than 30% month-on-month for several consecutive months.

The average daily sales volume increased to 200,000 units at the beginning of 2021, and 500,000 units were sold directly on Mother's Day, May 9. In comparison, the monthly shipment volume of "Huajia" was only more than 2 million units at its peak in 2017.

In the price war, flower vertical e-commerce companies, such as "Huajia" and "The Beast", are destined to be no match. Fortunately, the flower market is increasing in size, and the number of flower consumers in China is constantly expanding, so that vertical flower e-commerce companies that pursue "refined" products still have a place. Roseonly and The Beast focus on the high-end gift market. Relying on offline stores, they continue to expand their product lines to preserved flowers, jewelry, fragrances, household items, and artworks, and are committed to meeting the gift-giving needs of some people who pursue high quality.

Huajia and Huadianshijian focus on the marketing selling point of "pre-order + periodic purchase". On the one hand, they open stores on major e-commerce platforms to expand their sales scope, and on the other hand, they step up the expansion of offline stores and cooperative flower shops. By providing partners with traffic, systems, differentiated supply chains, designed products, valuable offline flower arrangement courses, etc., they give the brand additional added value and attract online and offline buyers with quality requirements.

Huali.com and Huaji.com have maintained their survival space in the vast third- and fourth-tier cities that have not been touched by fresh food e-commerce. The popularity of "Internet + flowers" has promoted the change of traditional flower retail methods. Flower e-commerce has gradually become a new retail pattern. Flower e-commerce companies have also fully integrated new Internet technologies and new models to carry out digital transformation.

The rapid growth of the flower industry and the layout of flowers by e-commerce companies have benefited from the environment of consumption upgrading. According to the survey data of iiMedia Research, 48.1% of the consumers interviewed buy flowers 3-5 times a year on average, and more than 60% of the consumers interviewed spend an average of 50-200 yuan on flowers each time. High-quality flowers have broadened the consumption scenarios of the flower industry. With the rapid development of the "self-pleasure economy" and the "her economy", flowers have become an indispensable necessity in life.

03 Flower e-commerce companies must not only keep their heads down and rush forward, but also look up and see the road ahead

iiMedia Research analysts believe that the upgrading of flower e-commerce enterprises in all aspects will create more new business opportunities for the industry, promote the sustainable development of the industry, and increase market competitiveness.

Although all parties are optimistic about "flower e-commerce", the existing "flower e-commerce" model is still constrained by "good and bad".

First of all, flowers are time-sensitive and can generate considerable profits during festivals. One of the advantages of flower e-commerce is “festival marketing”, and flower e-commerce can even “earn a living for a year”.

The second unique advantage of flower e-commerce is that flower consumption has changed from a "holiday gift " in the past to a reflection of the "self-pleasing slow life " lifestyle. In addition to the quality of the terminal scene, the upgrade and transformation of the entire chain is also crucial.

Of course, the shortcomings of flower e-commerce are also clearly evident. The first is that market homogeneity has become one of the more obvious problems . Therefore, flower e-commerce platforms need to find their own positioning, carry out detailed classification and refined operation, and carry out vertical classification in scene-based consumption, such as love, weddings, visiting patients, home and other scenes with high frequency of flower consumption and large demand.

Secondly, " large investment and difficulty in making profits " is another problem that flower e-commerce companies need to solve . The first listed flower e-commerce company, "Aishang Flowers", built its own flower planting base and focused on cold chain distribution, but suffered losses of tens of millions for three consecutive years. In its public transfer instructions in 2016, it even exposed its fake orders on e-commerce platforms for many years, with a fake order rate as high as 40%, and fabricated revenue of 30 million, and finally delisted in a hurry.

But there is no need to be too pessimistic. For flower vertical e-commerce, you can refer to 1-800-FLOWERS.COM, an online flower sales website founded in the United States in 1976 and listed in 1999. According to its latest Q2 2023 financial report, it achieved revenue of US$897.9 million and profit of US$82.53 million in the quarter, with good profitability.

Secondly, flower e-commerce still has the problem of " goods not matching the description " . According to the survey data of iiMedia Research, more than 60% of the consumers interviewed believe that the main feature of flower e-commerce is convenience, and 59.5% of the consumers interviewed believe that flower e-commerce has the problem of "goods not matching the description". No matter what type of flower e-commerce, quality is always a topic that cannot be avoided.

On the eve of 520 in 2020, Huadianshijian, who was invited to appear in Luo Yonghao's Douyin live broadcast room, missed the rare exposure opportunity due to problems such as early delivery time and discounted flower quality, and ended up apologizing and compensating. Earlier in 2017, Huajia's improper handling of certain flowers led to a far-reaching "poison flower incident", and sales fell from the peak.

According to data from iiMedia Research, 61.6% of Chinese netizens surveyed said that they valued the quality of products on social e-commerce platforms the most when choosing a platform, and 30.4% of Chinese social e-commerce users surveyed said they would share the products they purchased on social platforms.

Therefore, the occurrence of "wrong goods" will not only affect the repurchase rate, but also affect the reputation and corporate honor. Flower e-commerce companies need to continuously optimize the supply chain and service system. As the flower e-commerce market expands in the future, consumers will pay more attention to "quality" and guarantee.

The improvement of the “liveliness” of the flower market and the upgrading of the entire flower e-commerce chain have also been “news” in the past decade. Even “regularly” buying flowers has become a “necessity” of lifestyle. What are the “causes and consequences” of this “lifestyle”, that is, the explosion of “flower e-commerce”?

First of all, there is the quality of the terminal scene, and the upgrade and transformation of the entire chain. The updates and iterations of flower e-commerce companies in all aspects have created more new business opportunities for the flower e-commerce industry, and the "rapid" development of the entire e-commerce industry has provided a guarantee for "flower e-commerce".

Secondly, it benefits from the rise of the " self-pleasing economy " and the rise of female consumption. Data shows that the scale of female mobile Internet users in China will reach 547 million in 2021, and the number of people living alone in China will exceed 92 million in 2021. Consumers' consumption behavior pays more attention to self-innovation and change. Single consumers will consume to please themselves, and self-pleasing consumption is gradually becoming the mainstream. After the epidemic, female consumption has accelerated its transformation to online, which has also promoted the development of "flower e-commerce".

Finally , the driving force behind the development of China's flower e-commerce, instant delivery, is becoming increasingly complete. For example, on Mother's Day in 2022, the total number of flower orders from SF Express in the same city increased by as much as 1.5 times.

Of course, we have to mention that the maturity of cold chain technology is also a driving force for the development of China's flower e-commerce. iiMedia Research analysts believe that cold chain logistics ensures the freshness and quality of flowers. The continuous expansion of China's cold chain logistics market will help flower e-commerce companies expand their business. When searching for fresh cut flowers on Taobao, there are two keywords that are most likely to appear in product titles. One is "SF Cold Chain" and the other is "Direct from Yunnan Base".

The former is relatively easy to understand. The fragility of flowers means that it is impossible to compress logistics costs as much as industrial products. Online, they rely on cold chain logistics, and offline, they rely on flower shop maintenance + third-party delivery. MissFresh and Dingdong Maicai rely on the forward warehouse model and have a complete cold chain storage capacity and rapid delivery system, which can take into account flower transactions.

This is actually a major foundation for the development of the flower industry. Fresh cut flowers can be stored for about a month in a low temperature environment of 0-7 degrees, and professional flower preservatives such as "Kelixian" are also needed as an aid. Without logistics support, flowers can basically not be linked to e-commerce.

04 Ending

According to the survey data of iiMedia Research, when purchasing flowers, the interviewed consumers mainly focus on price, quality, variety and quantity, accounting for 59.4%, 56.3% and 52.5% respectively.

Among the factors that Chinese netizens consider in their perception of the advantages of flower e-commerce, the most considered is convenience of purchase (61.0%), followed by scheduled delivery (60.4%), rich combinations and styles (58.1%), complete product categories (58.0%), relatively low prices (43.8%), and pre-ordering in other places (37.1%).

59.5% of the consumers interviewed believed that there is a problem of mismatching flowers sold in flower e-commerce stores, followed by quality issues (56.3%), untimely delivery (54.5%) and after-sales issues (29.7%).

Finally, flower consumption is heating up year by year, and "family flower consumption" and "self-pleasing flower economy" are being sought after. It can be said that before 2015, people who bought flowers were basically boys who wanted to give them as gifts, but now women have broken traditional habits and buy flowers for themselves to please themselves.

From then on, "flower consumption" pays more attention to "self-expression", and "making oneself happy" becomes the focus of flower consumption. Therefore, "flower e-commerce" companies should launch a variety of consumption models to meet the self-pleasing needs of female consumers.

Author: Li Jiaman

Source: Public Account: Consumer World (ID: xiaofeijie316), new consumption, new opportunities.