Chinese online grocery-delivery platform, Missfresh reported that the Valentine’s Day flower sales increased by five-fold, with purchases of roses increasing by 20-fold, on its on-demand online retail platform.
The company has stepped up to meet the demand among consumers for products such as flowers, with 30 percent of Missfresh membership users in Beijing and Shanghai purchasing fresh cut flowers in the past month.
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According to iiMedia’s data from 2017 to 2020, China’s e-commerce flower market grew from RMB 23.55 billion (USD 3.7 billion) to RMB 72.06 billion (USD 11.33 billion), with a compound annual growth rate of 32.26 percent. Flowers have become an essential product category to Missfresh’s business model, allowing the company to increase revenue during and beyond holidays and festive seasons. On top of roses on Valentine’s Day, sales of carnations for Mother’s Day, Christmas trees for Christmas, and a range of New Year’s Eve flowers during the Spring Festival have all contributed to Missfresh’s sales.
To meet the growing demand, Missfresh upgraded its flower offerings to more than 200 SKUs since its flower business was launched in April 2021. “In the past, flowers were only given as gifts, but now they are part of daily life,” said Bo Qi, who takes charge of Missfresh’s fresh flower business.
“Flowers are fragile, have a short shelf life, place high demands on transportation, and have low levels of standardisation. The pain point in the flower business lies in the supply chain and cold chain transportation,” continued Bo Qi.
The company has increased the scale of its direct procurement from Yunnan, Liaoning, and more locations to meet customer demand, while improving its supply chain and logistical links as well as shortening transport time to enhance the quality of Missfresh’s flowers and optimise procurement costs. At present, the gross profit margin of Missfresh’s flowers is 26 percent, which is higher than the overall average for the platform.
Smart supply chain capabilities allow Missfresh to predict the sales of flowers over a certain period of time, and thus determine upstream orders and replenishment of its Distributed Mini Warehouses (DMWs) on a daily basis. Together with Missfresh’s cold chain transportation and temperature control, these capabilities further reduce the loss of flowers, ensure product quality, and improve the consumers’ flower shopping experience. Among Missfresh membership users, the repurchase rate of flowers has reached 40 percent.
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Industry insiders have revealed that for Missfresh, the growth of its flower business is an important means to continuously innovate its business model through its mature DMW system, focus on high-value users, optimise its product structure, and increase revenue. Missfresh’s sales data shows that the units per transaction that includes flowers is 25 percent higher than the platform’s overall average.