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Marketing cut flowers in Japan and Hong Kong.

World imports of floricultural products came close to US$5 billion in 1989, with cut flowers alone accounting for more than $2.5 billion. The share of developing countries in the flower market is considerable and amounted to more than 21% of the total traded internationally that year. Although the major import markets for floricultural products are countries in Western Europe and North America, several other markets also offer attractive prospects. Among these are Japan and Hong Kong, which are particularly interesting for suppliers in the Asian region. Both markets are expected to grow in the next several years.

Japanese market

Japan is a large market for flowers. It has one of the highest per capita figures for flower purchases in the world. Total cut flower sales in the country (including those grown locally) amount to about $6 billion annually, at the same level as the United States. It is estimated that 5.1 billion flowers were bought by Japanese consumers in 1989.

As an import market for fresh cut flowers, Japan ranks seventh in the world (after Germany, the United States, United Kingdom, France, Netherlands and Switzerland). Cut flower imports totalled $110.29 million in 1989, an increase by 490% in dollar terms over 1985 (the rise was less in terms of yen). Imports continued to move up in 1990, but at a slower rate (partly because of a weakening of the yen). In spite of the rapid increase in these imports in recent years, foreign supplies cover only a small part of Japan's total demand.

The Netherlands is by far the largest foreign supplier of fresh cut flowers to the Japanese market in value terms, accounting for close to 37% of the total in 1989. In terms of volume, however, it was only the third biggest source. Its exports to Japan that year amounted to more than 60 million stems of a wide variety of species.

Thailand was the second leading source of flower imports in value terms in 1989, with a high but declining share in the total (from 44% in 1985 to a little over 25% in 1989). In terms of volume, however, Thailand has consistently been Japan's principal foreign supplier of cut flowers.

China (Taiwan Province) is the main foreign source of chrysantemums (nearly 40 million stems in 1988).

Hong Kong market

Hong Kong is only the fifteenth largest import market for cut flowers in the world, but it is one of the most dynamic. The total value of flower imports doubled in value during the 1986-89 period, reaching almost $14.7 million.

Its main source for these imports is the Netherlands, which provides about one-third of the total, followed by Malaysia (14% of the total in 1989), Thailand (10%), Singapore (9%), Colombia (9%) and New Zealand (5%).

Consumer preferences

The most popular flower in Japan by far is chrysanthemums, followed by carnations, roses, gypsophila and statice. Other types sold on the market include freesias, tulips and alstroemerias.

Colour preferences in Japan for flowers differ from those in most other countries. White flowers are in highest demand, as this is the colour used at weddings and many other special occasions. Soft pastel colours (such as pink and light purple) are preferred to dark colours (for instance to dark red, which is a popular colour in Europe). Because flower arrangements account for a large part of the market, colours and shapes that are easily combined with other flowers are in high demand.

Hong Kong consumers buy many different types of flowers. The traditional species are the most popular: roses, carnations, chrysanthemums, gypsophila and orchids. Other types are also in considerable demand, such as freesias, statice, gladioli, alstroemerias, solidasters and anthuriums.

The most popular colour in Hong Kong for roses is red, followed by pink, yellow and white. About half of all carnations bought are pink, with red, dark pink, yellow and white sold in smaller quantities. Mauve and similar shades are not in high demand in Hong Kong.

Importers' requirements

The Japanese flower market is noted for its stringent requirements for freshness and uniformity of colour and size. If imported flowers are not absolutely free of insects, pests and diseases, they are fumigated. About 30% of all cut flower imports must undergo this treatment. Every shipment is thoroughly inspected upon arrival in Japan.

Floricultural products imported into Japan must be accompanied by a phytosanitary certificate. This document should be obtained by the exporter after export inspection by the plant quarantine authority of the supplying country. As the certificate is required at the time of import inspection, it must accompany the shipment or be mailed in advance. A system has also been established whereby Japanese plant quarantine inspectors can give pre-shipment clearance in the supplying country. The inspection has to be paid by the exporters. (Flower exporters in the Netherlands have used this system, which has been one of the factors accounting for their success in this market.)

Japanese grading and packaging standards for flowers at times vary from those in Europe. Japanese importers often require smaller boxes and longer stem lengths than in Europe.

In Hong Kong quality and packaging standards are less stringent than in Europe and Japan.

For importers in Hong Kong speed and regularity of delivery are particularly important selling factors. For instance one successful flower exporter in the Netherlands ships flowers on evening flights for faxed orders received by noon, and the flowers reach the importer in Hong Kong by the next afternoon.

Competition

New suppliers in the Japanese market will meet strong competition, from both local producers and well established foreign suppliers, such as those in the Netherlands.

Competition is likewise strong in Hong Kong, from exporters in the Netherlands and also neighbouring countries, for example Malaysia. The fact that many countries export flowers to this market means that supplies at low prices are readily available.

Prospects

Japanese cut flower imports are expected to continue to increase, offering interesting opportunities for exporters in developing countries, if suppliers can comply with the stringent phytosanitary regulations. The high living standard in the country and the high land and labour costs are factors that should reinforce this development.

Opportunities exist in Japan for sales of a wide range of species. The flowers must, however, be of top quality. In the short term, types for which there is little or no local production, such as spray tropical orchids, nerines, freesias, lilies and anemones, will have the best marketing possibilities.

Although the Hong KOng market for fresh cut flowers is still comparatively small, it is one that is expected to be increasingly attractive in the future. Flower imports have recently been among the most dynamic in the world, and prospects for continued expansion are good, although at perhaps lower rates. The limited availability of land has contributed to the importance of imports in total flower consumption. Future developments in this market will largely depend on the level of expansion of flower production in China.

Sales openings exist for producers of a number of different types of flowers, particularly roses, carnations, gypsophila, orchids, chrysanthemums and lilies. In view of the relatively small quantities that most importers can buy each time they place an order, exporters should try to offer several varieties of flowers, either alone or by cooperating with other exporters to put together a "package."

Per K. Gunnerod is an ITC market development adviser. This article is based on two short studies that he recently wrote on Japan and Hong Kong as export markets for cut flowers, which complement a major ITC market study on floricultural products published in 1987.
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Author:Gunnerod, Per K.
Publication:International Trade Forum
Article Type:Industry Overview
Date:Jul 1, 1991
Words:1264
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