Complex Made Simple

Even with COVID-19, the UAE comes out smelling like a rose, literally

Flowers are not something we normally wear (except on occasions), normally eat (except for decorative purposes), or normally need in our daily lives. Yet, it's a blooming business in the UAE

Kuwait-based flower and gift delivery service Floward raised a $2.75 million investment round Fast turn-around-time (TAT) of 90 min from placing an order to delivering our flowers was also key Holland might be famous for its tulips, but Dubai could soon be known for its roses

Flowers are not something we normally wear (except on occasions), normally eat (except for decorative purposes), or normally need in our daily lives.

Yet it’s more part of our daily lives than we might think and it’s a blooming business globally and in the UAE.

One such business recently got some major funding but other players are making their presence known as well.

Floward   

Kuwait-based flower and gift delivery service Floward (a combination of Flower & Ward – Arabic for Flower) raised a $2.75 million investment round led by Saudi Arabia’s Impact46 with participation from Faith Capital, BNK, and other regional companies.

Founded in 2017 by Faith Capital’s Abdulaziz al-Loughani, Floward offers its users fresh flowers and gifts online, a sector that has traditionally been dominated by the offline. 

The startup has been able to grow its current revenue to more than $30 mn a year. This latest round now pushes the startups total funding to $7 mn.

Floward currently operates in Kuwait, Saudi, Qatar, Bahrain, and the UAE and plans to launch in six more cities in the region before the end of the year and the European market in 2021.

Al-Loughani is a Kuwaiti entrepreneur who had previously led Talabat. He had spotted a gap in the GCC cut-flower industry where over 98% of the $1.3-$1.5 billion market was offline.

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The founder and CEO invested in a small flower shop and then built the website and app to sell flowers online. He began sorting out shipments and logistics, having local partners for the accessories they bundle their flowers with (chocolates, cakes, perfumes, etc.), developing a user-friendly experience of viewing their products on the app and website, and finally, managing the last-mile delivery to ensure the best user experience.

Like any other business, the COVID-19 crisis has affected the startup. “At the beginning, there was a lot of uncertainty on how demand will look like,” Al Loughani told media.

To combat this uncertainty, the startup took major cost-cutting initiatives and asset-liability management measures.   

Al Loughani noted that e-commerce penetration has doubled.  Lockdowns across cities drove revenue down to zero overnight, but their established markets proved to be an advantage. They had seven fulfillment centers servicing nine cities in over five countries, which gave them the upper hand to work in different centers when others were closed.

Fast turn-around-time (TAT) of 90 min from placing an order to delivering our flowers was also key.

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Flower business 

Holland might be famous for its tulips, but Dubai could soon be known for its roses. For 11 months prior to January 2020, three million roses were exported from Advanced Horticulture farm, about halfway between Dubai and Al Ain, to Holland.

The farm, which has four hectares of greenhouses brimming with roses, has the capacity to produce eight million stems a year.

On average, a rose stem costs 1.25 Dirhams ($0.3), so sales from the farm could reach 10 million Dirhams ($2.72 mn) a year.

Advanced Horticulture, the emirate’s largest rose producer, plans to expand in about a year with up to 400 hectares and reach 1 billion Dirhams ($272 mn) worth of flowers a year.

Closer to Dubai, at Sweihan, the National Horticultural Co‘s (NHC) property has four hectares of greenhouses where roses, carnations, chrysanthemums, and others are grown.

Yearly production at the farm is expected to average one million flowers per greenhouse. The company has a ten-hectare expansion in the pipeline.

Black Tulip Flowers was established in 1990 and has grown to become one of the largest Fresh Flowers, Foliages & ornamental plants distribution companies in the Middle East.

The company caters to all wholesale and retail distribution channels for domestic and international markets. On average, the company imports 3-3.5 tons of fresh flowers, and foliage each day at Dubai and Sharjah locations, combined from over 15 countries and brought for distribution.

“We are the third-largest flower grower in the world,” said the company’s owner and chairman M.M. Ehiya, an Indian expat who started from a small flower shop on Sharjah’s King Faisal Road.

In addition to 21 outlets in the UAE, today Black Tulip owns 11 flower farms in Kenya, five in Ethiopia, and two in India. Around 8-10 tons of flowers are imported from these farms daily.