An Outlook : Flower Industry in Japan

Since 1970 the Japanese flower market has shown a steady growth. After 1990 there has been a rapid increase of imported cut flowers and flower bulbs. After 1994 there has been a stagnation in auction sales. The increase in number of growers stopped after 1992. About 60% of Japanese households never buy flowers at all. The Japanese preference for flowers is the natural setting. Auction system is very popular : 95% of ornamental crops go through auction markets. Imported cut flowers account for 6-7% of domestic consumption, about 80% of import is also distributed by auction market. Major players in distribution are auction market ($5.3 billion, 300 auctions), wholesale company ($1.4 billion, 500 wholesalers) and flowers shops ($8.2 billion, 26,000 florists). Minor players are supermarkets ($0.9 billion) and importers ($0.2 billion). Supermarkets account for less than 10% of final consumption of ornamentals. Changes in auction systems since the end of the \u2780 are : the integration of small and medium sized auctions, modernisation with electronical (clock-system) and logistic technology and realignment in organisational structure. As the flower market was blooming in the middele of \u2780s, 200 major and big Japanese companies flocked into the flower industry. Unfortunately, most of new entries failed, partly because lack of knowledge and/or personnel in running flower business and partly because of low productivity/insufficient sales volume resulting in low profitability. Survivors in the middle of \u2790s are Kirin and Suntory. Kirin Agribio EC is presently one of the leading companies in floricultural industry. Fides, Barbaret & Blanc, SGP and Hiljo are now under control of Kirin and in the domestic market Kirin also bought companies and sets up joint ventures with a retail chain and a wholesale business. In contrast, Suntory focusses on breeding and the nursery sector. Since 1989 they have been trying to breed a \u27blue rose\u27 in cooperation with the Autralian company Floregene. Major chain stores like Daiei and Jusco have not been succesfull. Independent florists, however, made succesful efforts. Direct marketing has been dominated by JFTD. Information technology will enable us to get around the existing auction markets. Dealing through a real time video auction system, or setting price and quantity in advance via Internet and later obtaining fresh flowers of better quality is possible in the near future. In Japan three companies are planning to establish a virtual trading system as Tele Flower Auction in Holland. Aucnet, a leading satellite auction company in used car business in Japan, announced to expand their business into the flower market. Nippon Steel is experimenting with Electronic Commerce by fresh flowers. Flower Auction Japan is designing a logistic network system with full coverage of all retail and business customers across the country