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The giant Chinese flower market aiming to be a blooming world wonder

Dounan has grown from an agricultural backwater into a thriving horticultural centre but there’s one thing holding it back from its global rivals

Yujing Liu UPDATED :

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Wang Zhongshan has been bidding daily at the Dounan Flower Market in southern China for six years but the auctions still get his heart racing.

He is one of 600 buyers vying for a share of the 10 million blooms up for sale each day in this part of Yunnan province, with each lot decided in less than three seconds.

The competition is intense in the smoke-filled auction room.

“When prices rise, the whole hall is on fire,” Wang said.

That’s because Dounan is the capital of China’s flower trade, an industry flourishing thanks to the country’s growing middle class and rising overseas demand.

In just three decades, the town has expanded from a rural backwater into Asia’s biggest flower market, supplying over three-quarters of the country’s cut blooms and exporting throughout the region.

It has ambitions to be the biggest player in the world but while it rivals major international exporter the Netherlands in terms of volume it still has one great leap forward to make to become a real global greenhouse powerhouse.

For many in the business, the day starts early in the morning when thousands of tonnes of cut flowers, ranging from roses to carnations and Texas bluebells, are harvested from surrounding regions and trucked to the market.

Wholesalers then work from noon until midnight examining the produce and striking deals. The blooms are boxed and sent on morning flights to customers and retailers around the country.

Mao Haipeng, from the Yunnan Dounan Flower Industry Group, which runs the major physical markets in Dounan, said demand was so great that about 300,000 farmers were cultivating 1.5 million hectares of flowers in the province, up from just a few dozen growers and less than 10,000 hectares (24,710 acres) back in the 1990s.

A large part of the growth is thanks to China’s expanding middle class, who increasingly see cut flowers as a part of daily life rather than luxuries reserved for special occasions.

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Mao said this was part of a natural shift as China’s economy developed and families started to have more disposable income for something that might have been seen as wasteful in the past.

While some households still grew plants at home, more were switching to buying cut flowers for the freshness and variety, Mao said.

“Flowers are becoming a necessity for Chinese families,” Mao said.

The demand is being met by a thriving number of online florists, allowing people in big cities to order flowers with a few taps of their smartphone. Internet consulting firm iResearch estimates China’s cut-flower e-commerce market expanded from 1.2 billion yuan (US$188 million) in 2013 to 12.4 billion yuan last year and is likely to close in on 50 billion yuan by 2021.

About 10 million blooms are up for sale each day through the Dounan flower auction centre. Photo: Yujing Liu

The blooms are also making their way abroad. The country’s annual cut flower exports climbed from US$6.5 million in 2002 to over US$250 million last year, with 70 per cent of them ending up in other Asian countries, official figures show.

China supplied 48 per cent of South Korea’s cut flower imports, 44 per cent of Hong Kong’s and 12 per cent of Japan’s in 2016, according to data from MIT’s Observatory for Economic Complexity.

Wang has seen that growth first-hand. He works for his brother-in-law’s business, Kunming Qingyi Flower, which started out as a small shop in Dounan two decades ago and now sells 18 million yuan in flowers each year to retailers in China as well as in 14 other countries across Asia.

“Nobody had heard about Dounan decades ago. But now over 75 per cent of the cut flowers in China come from here,” Wang said.

Dounan is now neck and neck with the Aalsmeer flower market in the Netherlands, the world’s top trading centre, in terms of the volume of flowers sold. But for all of that growth, China accounts for just 1.3 per cent of the value of global exports.

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The big problem is quality.

“Quality is the industry’s weak spot,” Mao said. “We are getting close to Europe in terms of transaction volume, but the average price is not even close.”

Wang said the root of the issue was poor growing and processing technology. Unlike their counterparts overseas, farmers in Yunnan have only started using greenhouses, which can protect plants from pests, disease and the cold.

Wang’s firm has also hired a horticultural expert from Kenya, another major flower exporter, to show farmers supplying the company how they can improve their product and extend their shelf life.

“Farmers in other countries feed the flowers with liquid nutrients to maintain freshness as soon as they cut them,” Wang said.

“[But] farmers here either have no awareness [of the technology] or are reluctant to use it because of the costs.”

iResearch said logistics also needed to improve, with the domestic industry only now starting to use refrigeration to store and transport the blooms. But this required the kind of heavy investment that was out of reach for many suppliers, it said.

The Dounan Flower Market auction still gets Wang Zhongshan’s heart racing. Wang is the main buyer for wholesaler Kunming Qingyi Flower. Photo: Yujing Liu

One way around this is to keep the focus on meeting the robust domestic market, according to an official at the industry trade group Yunnan Flower Association.

Another source of potential is tourism, with a record 206,000 visitors lured to Dounan during the Lunar New Year this year, according to Yunnan Dounan Flower Industry Group

Among them was Shanghai university student Chen Qing, who is a regular buyer of cut flowers for her home.

“I’ve already posted many photos on WeChat and would definitely recommend this place to my friends,” she said.

Flower seller Fan Xiaojuan said the market was attracting a multitude of out-of-town visitors.

“There were no tourists from other provinces when we started last year, but there were so many of them this Lunar New Year,” Fan said.

“As long as you are not lazy, you can always make money here.”

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