Royal FloraHolland’s pilot programme for exports of auction members’ flowers to China, is going well, according to CEO Lucas Vos. It’s still a bit of a search though, to find the perfect African roses.
The number of flowers that has been exported to China on FloraHolland’s initiative, has already exceeded 1 million, explained Vos Tuesday morning at a press conference about the auction’s annual results. It concerns tulips and roses. Vos: “That’s still hardly anything, compared to the total of 12.5 billion flowers that go through our marketplace each year.”
A bottleneck for exports to China is finding the right roses in the available production areas. FloraHolland decided on African roses. Production in Ethiopia and Kenya has been disappointing this year, because of a cold period earlier on. And their colours aren’t exactly what the Chinese are looking for.
Vos thinks that China has a lot of potential. Hollands current export value to this country is at €50 million. The goal is to reach €100 million by 2020. The potential of the entire Chinese market is €6 billion. Flowers are currently shipped to three Chinese cities, including Beijing and Shanghai. FloraHolland focuses mostly on Chinese florists who buy online.
Vos said that traders were initially not too sure about FloraHolland’s interference and focus on China, but by now the majority of the traders supports the pilot.
Vos indicated that the auction is also deliberating if they should explore the South-Korean market.
Investigating new markets (such as China and Turkey) is one of FloraHolland’s priorities. Other focus points include improved service, sustainability and the changing cooperative.
The main priority is digitisation. “FloraHolland’s future depends on digitisation. Physically, we are the largest marketplace. We want to have the largest digital marketplace as well. Our emphasis is totally on that now. With our digital marketplace we’d like to bring together a wide range of supply at the lowest possible transaction costs, in order to serve the demand-driven chain”, said Vos.
Vos pointed out that the increasingly demand-driven chain is an important development in the floricultural industry. It’s caused by the ongoing digitisation and because consumers are becoming more and more outspoken. As a result, transactions are getting smaller. At the same time, the discount retail segment is increasing – think of places like Aldi and Lidl. “That’s a positive development in terms of volume, but not in terms of revenue.”
Finally, Vos pointed out that there are new horticultural areas on the rise. He mentioned Turkey, Iran and China. “We’re still in a good position, but if we don’t respond quickly, the Netherlands will lose its role as the main hub.”
