With Hema entering the “game”, the flower industry, which has been silent for a long time, became lively again. Many fresh e-commerce companies have also started to be involved in flowers and a flower supply chain company has received new financing. Fresh Hema has signed 30 direct-sourcing cooperation bases in Yunnan, built a flower warehouse, and took the lead in creating the first complete flower supply chain in the industry.
The pace of consumption upgrades in the flower industry has been rather slow. The reason is that flowers are more delicate than ordinary vegetables and fruits, and have extremely high requirements for temperature control, quality, and maturity. So the whole chain is vulnerable and easy to high losses with high costs.
Beginning in 2019, Hema launched the "Cabbage Flower Workshop", which is dedicated to allowing users to truly experience "buy flowers like vegetables". After two years of trials, Fresh Hema officially upgraded to the "Hema Garden" brand in May this year and steps towards the upstream base to start "re-walking the flower road" from the source.
"We have a dedicated team stationed in Yunnan, responsible for base sourcing, standard-setting, quality control, and building a cold chain logistics network from the place of production to the whole country." Lv Linglin, head of procurement at Hema Garden, said Hema is the industry's first new retail fresh flower brand with a complete supply chain, and it has realized the direct harvesting and shipment of fresh flowers from Yunnan to the whole country every day.
From the Yunnan base to the production warehouses, the sales warehouses to the Hema offline stores, and finally to the customer, the intermediate links are opened one by one, which means that the source price and quality of the flowers can be guaranteed, and the intermediate loss is greatly reduced.
This gives Hema the confidence to make a niche and minor-stream products that other players in the industry dare not make. For example, the original relatively niche and expensive hydrangea is sold at around 10 RMB in Hema, with one-third of the price compared to other suppliers, and has become a "phenomenal explosive product", and the repurchase rate is nearly 10 times that of ordinary flowers.
In October of this year, Hema Garden’s sales were five times that of the same period last year, and they are still growing rapidly. "Only when the price goes down, the quality goes up, and the user's habit is formed, flowers will gradually shift from gift-based consumption to daily consumption." Lv Linglin said.
There are at least 70 or 80 varieties, and sometimes hundreds of flower varieties. The richness of categories is far greater than that of other e-commerce platforms. Hema is also creating a "black label series" for mid-to-high-end users, such as Colombian Hydrangea and Flamingo roses.
New retail has become the "engine" for this upgrade of flower consumption. At the same time, upstream growers have also ushered in new changes.
For some local farmers in Kunming, who are engaged in the business of hydrangea, their income has often been unstable because the price of fresh flowers fluctuates greatly with the seasons and festivals in the past. During the summer season, the inventory was difficult to sell, resulting in huge losses.
Since they started cooperating with Fresh Hema in September last year, they have stopped worrying about sales and could focus more on planting flowers and controlling quality. After one year, the base’s hydrangea B-level and above standards have increased by 30%. In the short term, Hema places an order one week in advance and can be picked according to the order, and in the long term, the sales can be estimated and the planting can be targeted. "With stable orders, the loss is very small now, and I earn 30,000 to 50,000 RMB more than before." A local grower said.
The Dutchman Tim, who has been engaged in the flower business in China for 15 years, is the managing director of Hasfarm Group, leading technology and scale in Asia. He also felt the changes brought about by new retail to the flower business this year.
As a result of the epidemic, many mid-to-high-end flowers that were originally only exported, such as alstroemeria flowers and tulips, turned to the domestic market and shipped to the hands of a large number of customers through Hema. "Hema's consumer group covers the mainstream consumer group of flowers, and it is the first supermarket we have cooperated within China," Tim said.
In European and American countries, flowers are usually sold in supermarkets, which are daily consumption. The annual per capita consumption of flowers in developed countries is about 10 times that of China.
Industry insiders believe that Hema’s entry into the flower track, relying on its own online and offline integrated new retail model and warehousing, logistics and other infrastructure, has privileged advantages, and it has played a role in the flower business with a lower marginal cost, which is expected to stir up innovation in this field and accelerate the emergence of the industry's explosive period.
Source: iwshang.com