Scent of money in roses

By Zheng Xin | China Daily | Updated: 2017-01-04 07:38

Scent of money in roses

A sales representative of roseonly arranges flower product samples at its outlet in Beijing. [Photo by Feng Yongbin/China Daily]

Jewelry, perfumes, fashion, accessories... make for luxury brands, sure. But fragrant flowers like roses?

Definitely, said Pu Yi, founder and CEO of roseonly, a Beijing-based startup of 2013 vintage.

"Just like Tiffany in the US, and Mikimoto in Japan, roseonly is gradually becoming a new signature luxury brand embraced by the country's middle class. We want to become a homegrown Chinese luxury brand," said Pu.

That aspiration may sound ambitious but is realistic.

roseonly-that's how it spells its name, with a lower-case 'r'-has blazed to unprecedented success in China selling premium roses imported from Ecuador in South America to upwardly mobile, newly wealthy upper middle-class consumers. Its bouquets are among the hottest gift choices among young Chinese.

roseonly's prices range from 999 yuan for an 11-rose bunch to 9,999 yuan for a 99-rose bouquet. The startup expects the sales in 2016 via outlets in multiple cities and online stores to reach around 250 million yuan ($35.86 million), up from 130 million yuan in 2015, 61 million yuan in 2014 and 14.6 million yuan in 2013. It expects sales to exceed 300 million yuan this year.

Clearly, annual sales revenue has been surging, probably due to roseonly's unique packaging and marketing, which emphasize not the imported roses but once-in-a-lifetime expression of love for one special person (who is, usually, the buyer's girlfriend, fiancee or wife).

Stated differently, roseonly stores information of buyers and bouquet recipients on a database at the time of purchase. This information cannot be changed later.

That would mean, a consumer can buy at roseonly only once-no repeat purchases by the same customer for different recipients are allowed.

roseonly's seemingly self-defeating strategy has paid off-the sales figures cited earlier are proof.

If more proof were needed, twice in recent months, roseonly witnessed sales surges. The latest one was during the Christmas-New Year week. "We've seen a 40 percent rise in sales during the Christmas season," Pu said.

The earlier spike was around the Qixi festival or the Chinese Valentine's Day in August.

"If my boyfriend buys me an expensive roseonly bouquet, that would contain more than a bunch of roses-it would signal his confession and a reassuring promise," said Wang Qin, 23, a Beijing resident.

Investors may have had a whiff of the scent of potential money in roses. Angels had chipped in with some funds two months after roseonly launched. Tencent, owner of the WeChat app, poured $10 million into the startup.

In 2014, IDG capital and Acccel Partners invested more than $10 million, followed by 190 million yuan from Genesis Capital, Prosperity Investment and Echo Capital.

All that money over the years has helped roseonly to open 28 outlets in Beijing, Shanghai and other first- and second-tier cities. It is the biggest flower vendor on Tmall, Alibaba's online marketplace.

The florist is now valued at $100 million, according to TechinAsia.

Not surprisingly, roseonly wants to go beyond the Chinese mainland. It plans to open shops in Malaysia, Hong Kong, Taiwan, Japan, South Korea and Singapore in the years to come.

Pu describes the brand's target demographic as men and women between the ages 25 and 45, with stable incomes and an appreciation for high-quality goods or affordable luxuries.

According to a report by McKinsey, generational change and the rising prosperity of inland cities will power consumption for years to come.

By 2022, more than 75 percent of China's urban consumers will earn 60,000 yuan to 229,000 yuan ($9,000 to $34,000) a year, the McKinsey report said.

"There will be not only challenges but also plenty of opportunities for companies whose strategies reflect China's new constellation of rising incomes, shifting urban landscapes, and generational change," said Pu.

To ride the trend, roseonly has launched new offerings like bouquets of exotic flowers, which it bundles with jewelry pieces in exquisite gift packages. "We will expand the business to the high-end gift market," said Pu.

"We've so far come up with many love-related jewelry gifts like bracelets, necklaces and earrings, and will cooperate more with some of the world's renowned designers and celebrities.

"The jewelry market has more potential than the flower market, and the gift market has even more."

Most of roseonly's jewelry gifts are designed to be rose-related, and target young girls. It also sells tailor-made gifts during peak seasons, like a snowman necklace during Christmas and limited-edition designer jewelry associated with celebrities.

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