Holland is the world’s largest flower producing and exporting country. Part of the Dutch lily bulbs production finds its way to wholesales and growers in China. Selling lilies to the Chinese is good business, but there are stock risks involved, says Jan-Willem Mantel, Area Export Manager with De Jong Lelies, a large exporter.
A bit of education on lilies
It is not the lily flower that is exported half way across the world to China. It is the bulb of the lily that Chinese growers are after. In several regions in China, growers choose the Dutch product to plant in their greenhouses, where the bulbs eventually produce lily flowers. Their customers, the Chinese flower consumers, love the different kinds of red and pink Oriental lily and OT-hybrid types that De Jong Lelies offers; the yellow and white types are also very much in demand.
“Every year, 150 million lilly bulbs are shipped to China, with a total worth of € 30 million”, says Jan-Willem Mantel, who handled China sales for De Jong Lelies. Mantel flies to Beijing, Hangzhou, Guangzhou and Kunming (all AIR FRANCE KLM destinations) to meet with wholesalers and growers and to close new deals.
In China, most lilies are sold around Chinese New Year. In order to get the flowers ready for sale in January/February, Chinese growers must plant their bulbs around October. The Dutch growers from whom Mantel and his colleagues buy bulbs, generally deliver at the end of the lilies’ natural growth season, in December. “There is a ten month time gap to overcome”, explains Jan-Willem. “And a serious stock risk. The lilly bulb market is pretty volatile, both in Holland and China. In ten months time, flower prices in China’s cities can go both up and down. When the prices go up, Chinese traders like to stick to the agreed buying prices for the bulbs. When flower prices go down, it is up to them to show their reliability”, Jan-Willem Mantel says with a smile.
Cultural negotiation differences
Jan-Willem touches on one of the many great differences in Asian styles of trade and negotiations. “In Japan, our trade partners stick to the deal and tend to bite the bullet when market prices change in their disadvantage. When the market situation changes in Vietnam, customers may contact us to see if we can help them out in any way. Some Chinese traders tend to view the signed contract as renegotiable.”
Trading with China obviously requires a hands-on approach. “My colleagues and I try to visit our customers several times a year, to look them in the eyes, so to speak. We are not alone in this market, there are other lily exporters with similar products, qualities and prices. We try to make our customers extra happy and loyal by maintaining close contact and by keeping them in the loop of the current market situations. Advising them on the timing of their buys is the best way to assure their loyalty. As far as loyalty goes in the market and in this part of the world.”
A classical question we ask to almost every exporter to China: how do you protect your product, knowledge and business? “We have seen widespread attempts of Chinese growers to produce their own bulbs, but these could not compete with the original product from Holland. In my view, our over hundred years of growing experience, combined with the strength of the Dutch cooperates, can still go a long way.”