Flower delivery market forecast in India
The relevance of research
Prompt flower delivery is a popular and affordable service for everyone. A bouquet with home delivery is not only a great opportunity to unexpectedly please and surprise, but also to congratulate a dear person who lives in another city
Purpose of the study
Analysis of the state of the flower delivery market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the flower delivery market
Content
Chapter 1. Key Components of the Flower Delivery Market
1.1. Market size
1.2. Flower delivery market growth rate
1.3. Flower Delivery Market Trends
1.4. The main problems of the industry
1.5. Flower Delivery Market Life Cycle Stage
1.6. Estimation of the number of buyers and their financial capabilities
1.7. Estimated consumption per capita
1.8. Analysis of sectoral indicators of financial and economic activity
1.9. Price analysis
Chapter 2
2.1. Economic components
2.2. Social Components
2.3. Technological components
2.4. Political Components
2.5. STEP-analysis of the flower delivery market
Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
3.2. Number of competitors and relative market shares of the largest competitors
3.3. Compact location of industry companies in certain regions
Chapter 4 Industry Forecasts
4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
4.2. Analysis of the impact on the state aid industry at the current date
4.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the flower delivery market
4.4. Prospects and growth drivers for the flower delivery market
4.5. Forecast for the development of the flower delivery market in the context of the current economic crisis due to covid-19
Chapter 5 Forecasting Methodology
5.1. Methods for forecasting key industry indicators
5.2. Sources of information for forecasting
5.3. Timing of forecasting
Research excerpt
Chapter 1. Key Components of the Flower Delivery Market
1.1. Market size
Today it is difficult to imagine life without the delivery of goods. Every day, people turn to Internet companies that help save time and effort. Flowers are no exception. Moreover, it is much more pleasant to receive presents at a time when you do not expect it at all. This is especially true for the floristic sphere.
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Now prompt flower delivery is a popular and affordable service for everyone. A bouquet with home delivery is not only a great opportunity to unexpectedly please and surprise, but also to congratulate a dear person who lives in another city. Another advantage of delivery is anonymity, which helps to present young people as caring and not embarrassed when presenting a bouquet to a girl. For residents of the metropolis, accustomed to the fast pace of life, flower delivery simplifies life and saves time.
Remote flower delivery services represent a separate segment of the flower products market. According to experts, the market for flower delivery services is growing by ...% every year.
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1.2. Flower delivery market growth rate
Consider the volume dynamics of the flower delivery market.
Diagram 2. Dynamics of the volume of the flower delivery market, 2016 - 2020, million Rs.
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1.3. Flower Delivery Market Trends
The main trends in the flower delivery market:
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It should be noted that in recent years there has been a trend in the flower delivery market - an increase in the number of sites that offer delivery in a particular city. As a rule, their prices are slightly lower than those of marketplaces or aggregators.
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1.4. The main problems of the industry
The main issues in the industry include:
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1.5. Flower Delivery Market Life Cycle Stage
From a life cycle perspective, the flower delivery market is in a growth phase.
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This is evidenced by:
growth in the volume of consumption of services in monetary terms per capita;
the growth of the market volume in monetary terms in the last decade, the low growth rate is due to the limited income of the population;
shaping the culture and experience of applying for these services;
The growth potential of the market remains quite high.
1.6. Estimation of the number of buyers and their financial capabilities
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Statistics show that although the financial situation of Indians has been improving in recent years, most of them cannot afford anything but the bare necessities.
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1.7. Estimated consumption per capita
During 2016-2020 the volume of consumption of flower delivery services per capita grew and in 2020 reached the value of ... Rs./person, which is the maximum value in the study period.
1.8. Analysis of sectoral indicators of financial and economic activity
Important data for analyzing the state of the industry is the dynamics of such indicators as profitability, liquidity, and business activity.
Gross margin is gross profit divided by sales revenue (excluding excise taxes and VAT). Gross margin shows how much gross profit falls on a unit of revenue. Gross profitability serves as an assessment of the economic efficiency of an enterprise, which reflects the rational use of labor, material, monetary and other resources.
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Table 1. Flower Delivery Industry Gross Margin vs. All Industries in India, 2016-2020, %
Return on profit
The profitability before tax of the flower delivery industry relative to the profitability of all industries in India in the study period was both higher and lower than the performance of the Indian economy as a whole. In 2020, the value of the indicator for the industry was by 5,4 p.p. higher than the average for all sectors of the Indian economy.
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Consider the liquidity ratios in the flower delivery industry. The indicator of current liquidity is a measure of the solvency of the organization, the ability to repay the current (up to a year) obligations of the organization.
Current liquidity
Values of current liquidity in the industry in 2016-2020 were in the range of 1,46-2,77 times. The higher the value of the current liquidity ratio, the higher the liquidity of the company's assets. The value of the coefficient below ""1"" indicates the likely difficulties in repaying the organization of its current liabilities. Too high current liquidity ratio (above “2”) is also undesirable, since it may reflect insufficiently efficient use of current assets or short-term financing.
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Absolute liquidity
A more stringent liquidity criterion is the absolute liquidity ratio. It shows what part of short-term liabilities can be repaid immediately, if necessary, at the expense of available cash and marketable securities.
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Business Activity Indices
Business activity is the ability of an enterprise, based on the results of its economic activity, to take a stable position in a competitive market, it is the performance of an enterprise in relation to the amount of resource consumption in the process of the operating cycle. Indicators of business activity are related to the rate of turnover of funds: the faster the turnover, the less semi-fixed costs per turnover, which means the higher the financial efficiency of the enterprise and the industry as a whole as a combination of many enterprises.
Chart 9. Business activity (average turnover period of receivables) in the field of flower delivery, for 2016-2020, days days
Financial stability
The stability of the financial position of the enterprise is impossible without effective management of working capital, based on the identification of significant factors and measures to provide the enterprise with its own working capital.
The equity ratio characterizes the availability of own working capital of the enterprise, necessary for its financial stability, it is calculated to assess the solvency of the enterprise. Lack of own working capital, i.e. the negative value of the coefficient indicates that all the current assets of the organization and, possibly, part of the non-current assets are formed from borrowed sources. The normative value of the index Equity ratio - 0,1 (10%) - was established by a decree of the Government of India. Consider the data on the dynamics of financial stability.
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1.9. Price analysis
In general, according to GidMarket analysts, in India in 2020, consumer price indices for flower delivery services increased by ...% compared to 2019.
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Chapter 2
2.1. Economic components
GDP is a macroeconomic indicator that reflects the market value of all final goods and services (that is, intended for direct consumption) produced per year in all sectors of the economy on the territory of the state for consumption, export and accumulation, regardless of the nationality of the factors of production used. It is the main, most complete official indicator of public welfare. The absolute and relative values of GDP give an idea of the general material well-being of the nation and the dynamics of its growth / decrease, since the higher the level of production, the higher the welfare of the country.
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The industrial production index shows the total volume of all industrial production, utilities, etc. in terms of money.
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inflation rate. Inflation in 2019 (3,0%) took the second place in the entire history of observations - it was lower only in 2017 - 2,5% (against the backdrop of a record harvest). In 2018, inflation was 4,3%. The decline in inflation is a positive factor contributing to the development of the industry in India.
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2.2. Social Components
Social (demographic)
During 2012-2018 India's population is on the rise. The increase in the population in 2015 was not only due to migration and natural increase, but also due to the formation of two new states of the Federation - the Republic of Crimea and the city of Sevastopol.
Diagram 14. Dynamics of the population of India, as of January 1, 2015-2021, million people, thousand people
According to the forecast for the period up to 2024, the population will increase only if the high version of the forecast is followed, however, in light of the developing economic crisis and the coronavirus pandemic, this version of the forecast is unlikely to materialize.
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2.3. Technological components
High import dependence on the flower market. Negative influence of the factor.
Room for work. A small room for storing flowers is needed, about 20-30 square meters. m. with natural and additional lighting. The positive influence of the factor.
To keep the marketable appearance of flowers for 3-4 days, special equipment (refrigerators, ventilation and humidification) is necessary to maintain the desired indoor climate. Negative influence of the factor.
If a flower shop opens with a delivery function, it should be rented in a well-travelled place, on central alleys, squares or in a shopping center. If only the delivery service and the premises are needed solely for the work of employees and the creation of bouquets, you can rent an area in a cheaper place.
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2.4. Political Components
Credit policy. Today it is quite difficult to imagine the progressive development of the economy without the active participation of the credit system. It should also be noted that the assessment of the availability of credit resources for both legal entities and individuals is a significant indicator that allows assessing not only the demand for credit funds, but can also serve as a reflection of the real economic situation both in the region and in the economy as a whole. Consider the dynamics of average interest rates on loans to legal entities.
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The Government of India is actively working towards the availability of credit funds. As can be seen in Diagram 17, the weighted average interest rate in 2015-2020 tends to decrease. Low stable interest rates will allow you to plan your business more confidently. Order of the Ministry of Economic Development of India dated February 19.02.2015, 74 N 2020 approved the Main Provisions of the Strategy for the Development of the National Guarantee System for Supporting Small and Medium Enterprises for the period up to . The main goals of the Development Strategy are to increase the availability of credit resources for SME states and the formation of a unified system of guarantee support for small and medium enterprises and medium business.
The development strategy establishes a mechanism for actions aimed at increasing the guarantee support of states for small and medium-sized businesses and improving business lending conditions, and also defines technologies, target client segments, geographic and industry boundaries, and promising opportunities for the national guarantee system. The positive influence of the factor.
There is also grant support. Such a measure of state support is usually provided by regional authorities. The grant is provided to a start-up entrepreneur in the form of a lump-sum subsidy, on an irrevocable and gratuitous basis. But depending on the region, the conditions for obtaining grants may differ. Money is allocated to those whose applications have passed the competitive selection. Among the selection criteria are the scope of the business, the amount of revenue, the number of jobs, etc.
2.5. STEP-analysis of the flower delivery market
In general, the impact of macro factors on the flower delivery market can be assessed as negative. A group of economic and social factors, as well as a group of technological factors (import dependence, the need for special equipment, the problem with the selection of specialists) have a negative impact.
Factors such as the need to have a small space for work, a lower cost of rent compared to a store, and a group of political factors have a positive impact.
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Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
The global experience of the flower delivery market demonstrates the dynamic development of this area.
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India is one of the world's largest consumers of flowers.
Market growth drivers are:
development of the segment of floristic services in the country;
change in consumer habits - flowers are not only an attribute of the holiday.
The number of people wishing to open their own business in the field of flower delivery services is growing every year, due to:
high demand for flowers;
low cost of entry into the market;
relatively high profitability of business services.
Among the factors that affect the quality of flower delivery services are:
selection of flowers and bouquets (a large selection takes a lot of time to find the right option, and a small one - the absence of the desired bouquet option);
ordering process;
courier waiting time interval;
the quality of the flowers and the correspondence of the bouquet to the photos on the site.
Today, the market for flower delivery services is highly competitive. Some players are ready to work at a loss, greatly reducing prices. However, such players do not exist on the market for a long time. The trend of recent years is the sale of flowers in packages in a certain amount to retail customers at low prices. Such players today pose a threat to many market participants.
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3.2. Number of competitors and relative market shares of the largest competitors
Currently, there are a large number of market operators in the flower delivery market. The main players in the market include such companies ...
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Estimating the total revenue of the market leaders is complicated by the fact that market operators provide data on revenue volumes for the company as a whole, without a breakdown by industry. However, the general dynamics can be traced.
3.3. Compact location of industry companies in certain regions
The largest number of flower delivery services is in the Central Union Territories...
Diagram 20. The volume of the Indian market for the delivery of flowers to the Union Territories,%
Chapter 4 Industry Forecasts
4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
In 2020, the Indian economy faced three obstacles at once - falling oil prices, a self-isolation regime and a decrease in demand for Indian exports.
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4.2. Analysis of the impact on the state aid industry at the current date
Forecasting the development of the flower delivery market in India is impossible without understanding the economic situation in the country, as well as the impact of the spread of the covid-19 virus and the measures taken.
At the end of March 2020, the government identified 22 sectors that were the first to receive state support in the context of the economic crisis and the coronavirus pandemic: the government commission on improving the sustainability of the Indian economy, chaired by First Deputy Prime Minister Andrey Belousov, approved the list of sectors of the economy most affected by the deteriorating situation in connection with the spread of a new coronavirus infection, to provide priority targeted support.
Based on the results of consultations with the business community, the Ministry of Economic Development of India submitted the following sectors for approval to the Commission: air transportation, airport activities, trucking; culture, organization of leisure and entertainment; physical culture and health-improving activities and sports; activities of travel agencies and other organizations in the field of tourism; hotel business; public catering, organizations of additional education and non-state educational institutions; organizing conferences and exhibitions; activities for the provision of personal services to the population (repair, laundry, dry cleaning, hairdressing and beauty salon services). The list of industries was approved by the Government of India Decree No. 3 dated April 2020, 434. This list has been updated throughout the year.
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The vast majority of the support measures announced by the president and the government concern only the industries that the government has identified as the most affected. That is, benefits apply only to legal entities. persons and individual entrepreneurs whose main activity code (OKVED) specified in the Unified State Register (EGRLE) is included in the government list of such industries.
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4.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the flower delivery market
Quarantine restrictions in the spring of 2020, which led to the closure of retail outlets, a decrease in the mobility of the population and a reduction in unnecessary expenses by citizens, turned into serious losses for both growers and flower dealers.
The part of the business that is associated with a cut for bouquets suffered the most, to a lesser extent - with indoor plants. The main losses affected those companies that did not have time to reformat offline sales to online.
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4.4. Prospects and growth drivers for the flower delivery market
The volume of the online sales market has grown significantly as of the end of 2020. The pandemic contributed to such a powerful jump – the peak figures were in May and September last year.
There was an opinion on the market that online sales are popular only among residents of the two metropolitan regions, however, the results of 2020 proved the opposite: new local players appear in the regions, and federal players are actively expanding.
1. Delivery from stores. With this format, the company aggregates the range of stores on the website/app. The buyer makes an order, and the employees collect it directly from the flower showcases. Then the couriers deliver the order to the specified address.
2. Darkstore (""dark shop"" ). It is a place where goods are stored. It is not designed for the presence of the buyer and is designed in such a way as to collect orders and deliver them from the dark store to customers as conveniently and quickly as possible. Proximity to the buyer and relatively small size distinguish the darkstore from other varieties of warehouses.
Today, there are two delivery formats: services can focus on express deliveries “on demand” or bring flowers in a certain period of time. This is a scheduled delivery.
Scheduled delivery
Scheduled deliveries are carried out by a certain time: the client chooses it from a variety of intervals on any of the days (usually no more than 7) that the service offers. Some companies may offer delivery on the day of the order, while others deliver flowers from the next day.
The choice in favor of scheduled delivery may be related to the company's logistics (the warehouse is far from the client) or the nature of the request. This makes it convenient to serve orders from businesses or large orders from private buyers for a large event. In 2020, some services switched to scheduled deliveries due to a heavy load: there were so many orders during the lockdown that express delivery became impossible.
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4.5. Forecast for the development of the flower delivery market in the context of the current economic crisis due to covid-19
An economic crisis is a profound disruption of normal economic activity, which is accompanied by the destruction of habitual economic ties, a decrease in business activity, the inability to repay debts and the accumulation of debt obligations. This is a phenomenon of a market economy, repeating with a certain frequency, and depending on the scale, it can both concern a certain state and be of global importance. The crisis is accompanied by a sharp decline in production, bankruptcy of enterprises, a fall in the gross national product, a large-scale increase in unemployment, and often a depreciation of the national currency.
The government has prepared a three-stage plan for economic recovery until 2022. A complete lifting of restrictions on businesses is scheduled for the end of 2021.
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Chapter 5 Forecasting Methodology
5.1. Methods for forecasting key industry indicators
Modern statistical forecasting methods are used, taking into account the actual dynamics of the industry and the impact of the current and projected general economic situation in connection with the spread of the covid-19 virus.
In addition, when compiling the forecast, changes in real incomes of the population, trends in consumer preferences in a crisis, development forecasts and the degree of impact of other factors affecting the industry are taken into account.
5.2. Sources of information for forecasting
Industry volume over the past 5 years
Industry dynamics in 2008-2009, in 2014-2015, in 2016-2020*
Dynamics of macroeconomic indicators over the past 9-10 years
Current public assistance plans
Databases of the State Statistics Committee of India
Indian Revenue Service databases
Open sources (websites, portals)
Issuer reporting
Company websites
Media Archives
Regional and federal media
Insider sources
Specialized analytical portals
5.3. Timing of forecasting
The forecast belongs to the medium-term category - 5 years (2021-2025)
Diagrams
Figure 1. Dynamics of sales of flowers via the Internet
Diagram 2. Dynamics of the volume of the flower delivery market, 2016 - 2020, million Rs.
Diagram 3. Market structure by type of bouquets in India, %
Diagram 4. Market structure by type of services provided in India, %
Figure 5. Life cycle stage of the flower delivery market
Chart 6. Volume of consumption in the flower delivery market per capita, 2016-2020, Rs./person
Diagram 7. Return on profit before tax (profit of the reporting period) in the field of flower delivery in comparison with all sectors of the Indian economy, 2016-2020, %
Diagram 8. Current liquidity (total coverage) in the field of flower delivery for 2016-2020, times
Chart 9. Business activity (average turnover period of receivables) in the field of flower delivery, for 2016-2020, days days
Diagram 10. Average bill for flowers (bouquet), Rs.
Chart 11. India's GDP dynamics, 2015-2021 Q2 years, % to the previous year, trillion Rs.
Chart 12. Monthly dynamics of the US dollar against the rupee, 2017-August 2021, Rs. for 1 US dollar
Chart 13. Dynamics of the inflation rate in India, 2016-2021 (10 months), %
Diagram 14. Dynamics of the population of India, as of January 1, 2015-2021, million people, thousand people
Diagram 15. Population forecast in India for the period 2021-2024, million people
Chart 16. Dynamics of real incomes of the population of India, 2015-2020
Diagram 17. Dynamics of the average interest rate on loans, 2015-2020, %
Diagram 18. Shares of the largest competitors in the flower delivery market, %
Diagram 19. Dynamics of the total revenue of the largest market operators (TOP-5) in India, million Rs.
Diagram 20. The volume of the Indian market for the delivery of flowers to the Union Territories, %.
Diagram 21. Forecast for the development of the flower delivery market in India in 2021-2025, billion Rs.
Tables
Table 1. Flower Delivery Industry Gross Margin vs. All Industries in India, 2016-2020, %
Table 2. Absolute liquidity in the flower delivery industry compared to all sectors of the Indian economy, 2016-2020, times
Table 3. Financial sustainability (security of own working capital) in the field of flower delivery in comparison with all sectors of the Indian economy, 2016-2020, %
Table 4. Consumer price indices for flower delivery services in India in 2016-2021 (8 months), %
Table 5. Industrial production index by state of India (in % of the previous year), 2015 - 2020
Table 6. Weighted average interest rates of credit institutions on credit operations in rupees, excluding PJSC Sberbank (% per annum), 2015-2020
Table 7. STEP analysis of factors affecting the flower delivery market
Table 8. Main companies participating in the flower delivery market
Table 9. List of sectors of the Indian economy most affected by the deterioration of the situation as a result of the spread of a new coronavirus infection (as of October 16, 2020)
Table 10. Analysis of the impact on the industry of the state aid proposed to date
Table 11. Forecast indicators of the development of the Indian economy in 2021-2023
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