Fresh Flowers & Plants In China: A Market Analysis

SUMMARY

This updated Access Asia report on the development of the market for cut flowers in China deals with the growth in consumer and institutional demand for cut and fresh flowers in the PRC. China's flower market has grown nearly 20 times in the last decade.

EXTRACT FROM INTRODUCTION

The market for fresh flowers in China is growing rapidly as increased personal incomes allow more and more consumers to purchase fresh flowers as a gift or treat. Additionally, the government is encouraging gardening as an activity as part of China's 'greening' campaign in major cities such as Beijing, Shanghai and Guangzhou to compliment the new parks, green spaces and flower baskets cities are installing.

This growth is occurring at a time when China's logistics and transportation system is improving to a level that makes moving flowers around the country from the rural areas to the cities, which are the main markets, far easier than previously.

Reflecting the two trends above most of China's major cities have seen both new flower markets as well as burgeoning chains of florists in recent years. Additionally all cities have clusters of flower sellers such as those found around the Shanghai Flower market between Shaanxi Lu and Maoming Nan Lu in Shanghai where many florists stay open until 20:00 hours or later at night.

Additionally, people are using flowers to decorate their homes as part of the general improvement of homes in China as people purchase their properties. Finally, the growth of flower giving at events such as Spring Festival and newer imported traditions such as Christmas, Mother's Day and Valentine's Day are boosting the market.

Finally, there is a growing internal and export market for sub-tropical plants from China's southern provinces.

China is also a major producer of flowers. Currently, China has the greatest amount of land area in the world devoted to the growing of flowers and plants - a third of the world's total flower producing area. However, cultivation is highly inefficient and China only accounts for 0.5% of the world's total production while in contrast the Netherlands makes up only 10% of the world's total, while the country's export volume accounts for 70%.

TABLE OF CONTENTS

CHINA CONTACT II

CONTENTS III

INTRODUCTION 1

• Executive Summary 1
• Definitions & Report Coverage 2
• Other Relevant Reports from Access Asia 3
• Free Monthly Online Newsletters 4

1 THE FRESH FLOWERS & PLANTS MARKET IN CHINA 5

• 1.1 Total Market 5
  • 1.1.1 Total Market: Retail Market Size for Fresh Flowers 5
    • Table 1.1 TOTAL RETAIL MARKET FOR FRESH FLOWERS IN CHINA 1990-2003 6
  • 1.1.2 Total Market: Domestic Trade Volume for Fresh Flowers & Plants 6
    • Table 1.2 TOTAL MARKET FOR FRESH FLOWERS & PLANTS IN CHINA 1996-2003 7
  • 1.1.3 Total Market: Fresh Flower Sales by Type 8
    • Table 1.3 PERCENTAGE BREAKDOWN OF MAJOR FRESH FLOWER SALES IN CHINA BY TYPE 2002 8
  • 1.1.4 Total Market: Retail Pricing of Fresh Flowers 8
• 1.2 Outlook for China's Flowers & Plants Market 9
  • 1.2.1 Outlook: Forecast Trends 9
  • 1.2.2 Outlook: Total Market Size for Fresh Flowers 10
    • Table 2.4 FORECAST TOTAL MARKET FRESH FLOWERS IN CHINA 2003-2008 10

2 CURRENT ISSUES IN CHINA'S FLOWERS & PLANTS MARKET 11

• 2.1 Current Issues: Flower Markets 11
• 2.2 Current Issues: Consumers & Giving Flowers 11
• 2.3 Current Issues: The Emergence of St. Valentine's Day 12
• 2.4 Current Issues: Funeral Flowers 12
• 2.5 Current Issues: The Growth of Interest in Flower Arranging 13
• 2.6 Current Issues: E-commerce Sales of Flowers in China 13
  • Table 3.1 LEADING CATEGORIES OF E-COMMERCE SALES 2003 13
• 2.7 Current Issues: The Renaissance in Traditional Chinese Garden Styles 14
• 2.8 Current Issues: Flower Rental and Leasing 14

3 DISTRIBUTION OF FLOWERS & PLANTS IN CHINA 15

• 3.1 Distribution: Wholesale Distribution 15
• 3.2 Distribution: Retail Sales of Flowers & Plants by Outlet Type 15
  • Table 4.1 PERCENTAGE BREAKDOWN OF FRESH FLOWER SALES BY OUTLET TYPE 2002 16

4 SOURCES OF SUPPLY 17

• 4.1 Agricultural Policy 17
  • 4.1.1 Agricultural Policy: Background 17
  • 4.1.2 Agricultural Policy: Problems in Commercialisation 18
  • 4.1.3 Agricultural Policy: Institutional and Production Policies 19
    • Household Production Responsibility System 19
    • Development of Rural Industry 20
    • Governor's Grain-Bag Responsibility System 21
    • Mayors' Responsibility System 21
  • 4.1.4 Agricultural Policy: Domestic and Market Price Policy 21
    • Procurement Price Policies 22
    • Procurement Contract System 23
    • Reduction in Government Procurement Quotas 23
    • Elimination of Fixed Procurement Prices 24
    • Elimination of Urban Grain-rationing System 24
    • Price Support Programme 24
    • Grain Distribution Reform 25
  • 4.1.5 Agricultural Policy: Agricultural Trade Policy Instruments 26
    • State Trading 26
    • Tariffs and value-added tax 26
    • Import and Export Licensing 27
    • Foreign Grain Trade Management 27
  • 4.1.6 Agricultural Policy: Input Policy 28
    • Chemical Fertilisers 28
    • Water 28
  • 4.1.7 Agricultural Policy: Outlook 29
    • Macroeconomy 30
    • Trends in Food Demand 30
    • Agricultural Resources and Technology 30
    • World Trade Organisation (WTO) 31
• 4.2 Output 32
  • Table 4.1 PRODUCTION SHARES OF FLOWERS IN CHINA BY PROVINCE, 2002 32
• 4.3 China's Agricultural International Trade 33
  • Agricultural and Trade Policy 33
  • Tariff Reductions 36
• 4.4 Imports 37
  • 4.4.1 Imports: Value 37
    • Table 4.2 IMPORT VALUE OF FRESH CUT FLOWERS BY BROAD SECTOR, 1995-1998 37
  • 4.4.2 Imports: Volume 37
    • Table 4.3 IMPORT VOLUME OF SELECTED FRESH CUT FLOWERS BY BROAD SECTOR 1995-1999 38
• 4.5 Exports 39
  • 4.5.1 Exports: Value 39
    • Table 4.4 EXPORT VALUE OF FRESH CUT FLOWERS BY BROAD SECTOR 1995-1999 39
  • 4.5.2 Exports: Volume 39
    • Table 4.5 EXPORT VOLUME OF RHODODENRON, AZALEAS & ROSES S 1995-1999 40

5 SWOT ANALYSIS 41

• 5.1 Strengths 41
• 5.2 Weaknesses 41
• 5.3 Opportunities 42
• 5.4 Threats 42

6 COMPANY PROFILES 43

• 6.1 Alice Florists 43
• 6.2 Beijing Green Field Flowers 43
• 6.3 Beijing Fengtai Huaxiang Baipenyao United Company 43
• 6.4 Bojie Local Products Company Ltd 44
• 6.5 China TRD Company Ltd 44
• 6.6 Euro-Asia Agricultural (Holdings) Company Ltd 45
• 6.7 Huaxiang Flower Market 47
• 6.8 Jiaoda Agricultural Science (Xinqiao) Horticultural Garden 47
• 6.9 Kunming Yunlan Flower Company 47
• 6.10 Mainland Mart.com 48
• 6.11 Olive Modern Agriculture Development Company Ltd 48
• 6.12 Postal Etiquette Service/China Courier Service Corporation/ Guangzhou Courier Company 49
• 6.13 Shanghai Meilong Yu's Flower Nursery Company Ltd 49
• 6.14 Shanghai Metropolis Flowers' Harbor Company Ltd 50
• 6.15 Willem van Herreweghe 50
• 6.16 Ye Fan Flower Store 50
• 6.17 Yunnan Hekou Green Earth Company Ltd. 51
• 6.18 Yunnan Jingzheng Agriculture Synthesis Development Company Ltd. 51
• 6.19 Yunnan Sanduo Flower Company 51

7 GOVERNMENT DEPARTMENTS 52

• 7.1 Ministry of Agriculture 52
• 7.2 All-China Federation of Industry & Commerce 52

8 TRADE ASSOCIATIONS 53

• 8.1 China Flower Association 53
• 8.2 China Flowers & Plants Industry Association 53
• 8.3 The China Association of Floral Art 54
• 8.4 Flowers & Plants Industry Management Office 54
• 8.5 Flower Research Centre of Yunnan Academy of Agricultural Sciences Horticultural Institute 54
• 8.6 Yunnan Provincial Flower Industry Association 54

9 TRADE SHOWS & EXHIBITIONS 55

• 9.1 Horticulture 55
  • 91.1 China International Green House Engineering Show 55
  • 9.1.2 China International Flower & Garden Expo 55
  • 9.1.3 Tianjin International Flower Exhibition 55
  • 9.1.4 China International Turf, Landscape & Equipment Expo (China International Turf) 55
  • 9.1.5 FLOREXPO 55
  • 9.1.6 AGRIFLOR Kunming China (China Kunming International Floral Festival) 55
  • 9.1.7 Jiangsu Horticulture Exposition/Nanjing Flower Show 56
  • 9.1.8 International Garden & Flower Exposition 56
  • 9.1.9 China Flower Exposition (China Floricultural Exposition) 56
  • 9.1.10 China Flower Fair 56
  • 9.1.11 National Flower Technologies & Information Exchange Fair (Horticulture Facilities Exhibition) 56
  • 9.1.12 Hunan Agricultural Products Exposition & TradeFair 56
  • 9.1.13 China Orchid Fair 57
  • 9.1.14 Spring Orchids Exhibition Fair 57
  • 9.1.15 Fuzhou Flower Show 57
  • 9.1.16 China International Plum Blossom Festival 57
  • 9.1.17 The Hong Kong Flower Show 57
• 9.2 Agriculture 58
  • 9.2.1 Zhengzhou Agriculture EXPO 58
  • 9.2.2 North East China Seed & Pesticide Trade Fair 58
  • 9.2.3 AGRO-FOODTECH 58
  • 9.2.4 Northeast China International Fair on Agriculture 58

10 APPENDIX: MARKET BACKGROUND 59

• A.1 Fast Facts 59
• A.2 Regions of China 60
  • Map A.1 CHINA: PROVINCES AND MUNICIPALITIES 60
• A.3 Demographics 62
  • A.3.1 Demographics: Total Population 62
    • Table A.1 TOTAL POPULATION, 1996-2003 62
  • A.3.2 Demographics: Population by Location 63
    • Table A.2 POPULATION BY URBAN-RURAL DIVIDE, 1997-2003 64
  • A.3.3 Demographics: Population Breakdown by Location 64
    • Table A.3 POPULATION BREAKDOWN BY URBAN-RURAL DIVIDE, 1997-2003 64
  • A.3.4 Demographics: Population by Province 64
    • Table A.4 POPULATION BY PROVINCE, 2000-2003 65
  • A.3.5 Demographics: Population Density by Province 66
    • Table A.5 POPULATION DENSITY BY PROVINCE, 2000-2003 66
  • A.3.6 Demographics: Population Concentration 67
    • Map A.2 POPULATION CONCENTRATIONS BY PROVINCE, 2003 68
  • A.3.7 Demographics: Population by Gender 68
    • Table A.6 TOTAL POPULATION BREAKDOWN BY GENDER, 1997-2003 69
  • A.3.8 Demographics: Population by Age Group 69
    • Table A.7 POPULATION BY AGE GROUP, 1997-2003 69
    • Table A.8 POPULATION BY AGE GROUP (PERCENTAGE), 1997-2003 70
• A.4 Consumer Attitudes 71
  • A.4.1 Consumer Attitudes: Overview 71
  • A.4.2 Consumer Attitudes: Response to Political Change 71
  • A.4.2 Consumer Attitudes: Response to Economic Change 72
  • A.4.3 Consumer Attitudes: Changes in Lifestyle 73
    • Livelihood 73
    • Individual loans 73
    • Housing 74
    • Possessions 74
    • Travel 75
    • Entertainment 75
    • Health and Fitness 76
    • Purchasing Influences 77
    • Taboos 78
• A.5 Consumer Wealth 79
  • A.5.1 Consumer Wealth: GDP and Cost of Living 79
    • Dealing with WTO 79
    • Confident Shoppers 80
    • Table A.9 GDP AND COST OF LIVING INDEX, 1997-2003 80
  • A.5.2 Consumer Wealth: Provincial Differences in GDP 81
    • Table A.10 GDP RANKED BY PROVINCE, 1997-2003 82
  • A.5.3 Consumer Wealth: GDP Growth by Province 82
    • Table A.11 GDP GROWTH RANKED BY PROVINCE, 1996-2002* 83
  • A.5.4 Consumer Wealth: GDP Per Capita by Province 83
    • Table A.12 PER CAPITA GDP RANKED BY PROVINCE, 2000-2003 84
  • A.5.5 Consumer Wealth: Concentration of Wealth by Province 84
    • Map A.3 VALUE OF GDP PER CAPITA BY PROVINCE, 2003 85
  • A.5.6 Consumer Wealth: The Major Cities 85

    Table A.13 LEADING CITIES KEY ECONOMIC INDICATORS, 2003 86

• A.6 Households 87
  • A.6.1 Households: Overview of Household Conditions 87
  • A.6.2 Households: Total Households by Size 88
    • Table A.14 NUMBER OF HOUSEHOLDS BY SIZE, 1997-2003 88
  • A.6.3 Households: Total households by Urban/Rural Split 88
    • Table A.15 NUMBER AND SIZE OF HOUSEHOLDS BY LOCATION, 1997-2003 89
  • A.6.4 Households: Income Earners Per Household 89
    • Table A.16 AVERAGE NUMBER OF INCOME EARNERS PER HOUSEHOLD, 1997-2003 89
• A.7 Employment 90
  • A.7.1 Employment: Number of Workers by Sector 90
    • Table A.17 NATIONAL EMPLOYMENT BY SECTOR, 1997-2003 90
  • A.7.2 Employment: Growth by Sector 91
    • Table A.18 GROWTH IN EMPLOYMENT BY SECTOR, 1997-2003 91
  • A.7.3 Employment: Number of Workers by Gender 91
    • Table A.19 TOTAL NATIONAL WORKFORCE BY GENDER, 1997-2003 92
  • A.7.3 Employment: Number of Workers by Habitation 92
    • Table A.20 NATIONAL WORKFORCE BY HABITATION, 1997-2003 92
  • A.7.4 Employment: Urban Unemployment 93
    • Table A.21 URBAN UNEMPLOYMENT RATES, 1997-2003 94
• A.8 Consumer Income 95
  • A.8.1 Consumer Income: Average Incomes by Sector 95
    • Table A.22 AVERAGE INCOMES BY SECTOR, 1997-2003 95
  • A.8.2 Consumer Income: Growth by Sector 96
    • Table A.23 GROWTH IN AVERAGE INCOMES BY SECTOR, 1997-2003 96
  • A.8.3 Consumer Income: Average Incomes by Region 96
    • Table A.24 AVERAGE INCOMES BY REGION, 1997-2003 97
  • A.8.4 Consumer Income: Growth by Region 97
    • Table A.25 GROWTH IN AVERAGE INCOMES BY REGION, 1997-2003 98
• A.9 Consumer Market 99
  • A.9.1 Consumer Market: Spending Trends 99
    • Table A.26 CONSUMER EXPENDITURE* BY BROAD SECTOR AT CURRENT PRICES, 1997-2003 99
  • A.9.2 Consumer Market: Per Capita Consumer Expenditure 99
    • Table A.27 PER CAPITA CONSUMER EXPENDITURE* BY BROAD SECTOR AT CURRENT PRICES, 1997-2003 100
  • A.9.3 Consumer Market: Retail Sales and Consumer Spending 101
    • Table A.28 RETAIL SALES AS A PROPORTION OF CONSUMER EXPENDITURE, 1997-2003 101
  • A.9.4 Consumer Market: Urban Income and Spending Compared 101
    • Table A.29 URBAN AVERAGE ANNUAL INCOME/EXPENDITURE, 1997-2003 101
  • A.9.5 Consumer Market: Average Urban Weekly Shopping Basket 102
    • Chart A.1 AVERAGE WEEKLY URBAN SHOPPING BASKET, 2003 102
  • A.9.6 Consumer Market: Average Rural Weekly Shopping Basket 103
    • Chart A.2 AVERAGE WEEKLY RURAL SHOPPING BASKET, 2003 103
  • A.9.7 Consumer Market: Average Urban & Rural Weekly Shopping Baskets Compared 104
    • Chart A.3 URBAN & RURAL SHOPPING BASKETS COMPARED, 2003 104
• A.10 Exchange Rates 105
  • A.10.1 Exchange Rates: China 105
    • Table A.30 AVERAGE ANNUAL EXCHANGE RATES, 1997-2003 105
  • A.10.2 Exchange Rates: Hong Kong 105
    • Table A.31 AVERAGE ANNUAL EXCHANGE RATES, 1997-2003 105