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China: Flowerless V-Day: "Flower demand was 30%-40% of previous years"

On February 14th, the annual Valentine's Day was supposed to be a day when the prices of flowers rise with a big sale. However, the impact of COVID-19 (coronavirus) has shown the opposite.

It is learned that due to the impact of COVID-19, many offline flower shops were closed. Industry insiders predict that the overall demand for flowers at the peak of "14-02" this year was only about 30% to 40% of previous years. Affected by the epidemic, the loss of the flower industry in Yunnan Province will reach 10 billion RMB.

Closed shops and Valentine's Day
"There esd only a red rose gift box, and we didn't have a large number of stocks on Valentine's Day, and we had a shortage of the materials." An online flower shop responded.” Due to the epidemic, offline flower shops have not operated their businesses. They could only provide contactless distribution services. Even so, business has not been good. "The order was far worse than in previous years."

The reporter of Sohu contacted several online flower shops, and most of them said that offline stores did not make a large number of purchases for preparation in advance.

"The shelf life of the flowers is very short. This year's epidemic situation is severe. We also expected the market to be cold. All of them will not be stocked in large quantities, but only a little before Valentine's Day." A flower shop owner said to the reporter.

"Estimated Yunnan Flower Industry Losses 10 Billion"
On February 10, Kunming Dounan flower market resumed online auction trading, and the Kunming International Flower Auction Trading Center (referred to as “the Flower Auction Center”) reopened. Due to the epidemic prevention and control, the Flower Auction Center was closed for 4 days.

But the resumed online trading market is still very cold. Transaction data showed that 2 million stems were traded on February 10, with an overall average price of 0.43 RMB per stem, which was a decrease of 70.95%, reaching the lowest in three years since 2018. The turnover rate was also only 67%.

And as of 14th February, the flower auction center has not released new transaction data information.

However, in the transaction data released on February 10, the Flower Auction Center said that the nationwide scope is still in the key period of epidemic prevention and control, most of China’s flower market is still closed, the number of orders in the terminal market is small, and the overall demand is not high. Trading continued to be sluggish. In terms of logistics, although with the resumption of work in the auction market, major logistics companies around Dounan also gradually resumed work, the logistics situation is still not ideal. Some air freight logistics have been partly restored, but cold chain land transportation has recovered relatively less.

Although the market is gloomy, the trading data on February 10 has been the best performance compared to the ten days before the market suspension. Gao Rongmei, general manager of Kunming International Flower Auction Trading Center, said in an interview that "the daily trading volume for the 10 days before the business shut down was only over 1 million stems, and more than 2 million stems were traded today, which gives us confidence in the market."

It is found that the previous transaction information before the transaction was resumed on February 3, the total supply of auction transactions on that day was 1.2 million, which fell to a new lowest point, and the transaction continued to weaken, with an average transaction price of 0.45 RMB / Stem and 80% transaction rate.

On February 3, Dounan Flower Market also announced the operation of flower markets in 22 cities including Beijing, Shanghai, and Guangzhou. Among them, only three flower markets in Taiyuan, Nanning, and Changchun are open.

Dounan Flower Market stated that as weddings and gatherings were stopped, demand in the terminal market was very weak and due to entering the critical control period of the epidemic, some markets kept closed. In addition, logistics basically stagnated, and transactions continued to be gloomy.

It is found that the sharp decline in trading in the Dounan flower market started from the outbreak. The data shows that on January 23, the total amount of auction transactions in the market was about 1.8 million, which illustrates that the transaction dropped sharply, with a transaction rate of 81.3%.

From January 20th to 22nd, the total amount of auction transactions in the market was about 3.4 million, 3.4 million and 3 million, respectively. The transaction rates were 92.3%, 96.3%, and 88.9%.

If compared with the data of the early days of Valentine's Day in 2019, the online trading data of Dounan Flower Market looks even more dismal.

From February 10th to 14th of last year, the market supply was about 8 million, 8.5 million, 5.9 million, 5.1 million and 1 million, respectively; the transaction rates were 89.62%, 92.63%, 96.9%, 90.1%, and 95%.

The “coldness” of the online auction market directly reflects the “coldness” of the flower market. The offline trading market is even more difficult.

According to Gao Rongmei, the overall demand during the "14/2" peak period is expected to be only about 30% to 40% of previous years. In the first quarter of 2020, Yunnan ’s fresh cut flower transactions are estimated to decrease by 2 billion stems, of which the flower auction center transaction is estimated to decrease by 120 million stems. The flower revenue in the first quarter of previous years accounted for more than one-third of the year, which was crucial for the whole year. The industry's loss is estimated to reach 10 billion RMB.


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