Chen Mingzhang and his wife, founders of the Chinese company Xiuhai, have been cultivating pot plants for 37 years. He was not the first of his family to do so, as they had been growing pot plants for years in Taiwan and Kunming, China. Apart from cultivation, Mr. Chen also designs the greenhouses in which he grows his crops. We had a talk with Mr. Chen.
Can you tell us about the history of your company?
In 1985, I took over plant cultivation from my grandfather, continuously added new varieties, and founded a company to design greenhouses. Eleven years later, in 1996, I began growing Phalaenopsis. I designed and built the greenhouse I use for this purpose myself.
In 2001, I moved my business activities from Taiwan to Kunming. Currently, the company has two plant bases, in Kunming and Chuxiong. Kunming comprises an area of two hectares and has mainly Anthurium, Phalaenopsis and hydrangeas; Chuxiong has an area of six hectares, of which two hectares are Anthurium and four hectares are Phalaenopsis.
Why did you start growing Anthurium?
My company has been looking for new varieties for the flowering pot plant market since 2006. Around that time, Anthura established a site in Kunming from where it started selling young Anthurium plant material.
The Anthurium, with its bright colours, apart from the familiar red, long shelf life and suitability for smaller pot sizes, was cultivated by few companies in China at the time. Given the excellent market prospects and the considerable market scope, we soon entered into collaboration with Anthura. It has been sixteen years since Xiuhai bought the first young plants from Anthura and we have maintained a good cooperation since then. We have witnessed each other’s growth and the development and changes in the Chinese market in the field of flowering pot plants.
Why did you choose the location in Chuxiong?
Xiuhai has developed steadily and expanded its base in 2011. In selecting the second location, we primarily considered the production conditions suitable for Anthurium and Phalaenopsis. With this in mind, we visited all the areas in Yunnan Province that are suitable for growing these plants. This exercise took two years and we finally chose Caiyun Town, Lufeng, Chuxiong, Yunnan Province, for a variety of reasons. The superior geographical location, easy transportation, hours of sunlight, appropriate temperature and humidity and the presence of sufficient water of good quality; all favourable conditions for the vigorous growth of Anthurium and Phalaenopsis.
We ourselves designed and built a six-hectare greenhouse in Caiyun Town, Lufeng, Chuxiong, Yunnan, and for that purpose in 2015 we founded Yunnan Xiuhai Biotechnology Co., Ltd. Our team won the first prize of the 'Jinhua Award’ for pot plants of the China Flower Association in 2019. In 2022, the company was rated as a leading enterprise in Yunnan Province.
Why have you added Phalaenopsis to the range?
Xiuhai began planting Phalaenopsis seasonally as early as 2006, two seasons a year: Sale of flowering plants in mid-autumn, and for Chinese New Year in February. With continuous development, the increasing market demand and the possibility of being able to buy young Phalaenopsis plants as a customer of Anthura, we started to develop the year-round production of Phalaenopsis in 2015. This product group, with its high economic value, is popular among consumers because of features such as visual appeal, many different varieties, bright colours, elegant shape and longer flowering time. Phalaenopsis occupies an important position in the global plant industry and has enormous market potential.
You are responsible for your own distribution channels. Are all the plants sold by your own sales department?
Our company has its own comprehensive sales system and network covering most of China. We have obtained a basic export license, which allows our products to be exported to Hong Kong, Thailand, Vietnam, Myanmar, Singapore, Malaysia and other regions. We have been planting our Anthurium Rainbow series (the mixed colour brand for 12cm pots) since 2011 and export them to the above countries and regions. In 2021, we started to develop diversified distribution channels and online sales channels and we are still working on that.
Consumer habits in China are changing and online shopping has become predominant. The proportion of flowers and plants delivered to consumers via the Internet is also increasing. Anthurium and Phalaenopsis pot plants are increasingly in demand as symbols of an affluent lifestyle and to improve people’s living standards and aesthetics.
What do you think about the development of the Chinese market?
The plant and flower industry is the only industry in the world that is not limited by quotas for agricultural products. It is known in China as a „sunrise industry” or „golden industry” and is one of the most dynamic industries in the world. With the upgrading of consumption in China, this sector will usher in a new round of development opportunities with enormous growth potential.
The tremendous development of e-commerce also has an impact on the use of flowers and plants in China. From decorating public spaces and their use as gifts, we are moving towards private consumption. That change also affects the product itself. While red is a good colour for gift-giving, we are seeing that other colours are more often chosen for personal use.
The pot size is also subject to change. A gift is likely to be large, and also for decorating spacious rooms large pot sizes predominate, while for personal use there is more interest in smaller pot sizes. The volume of imported plants and flowers and fresh cut flowers is growing rapidly and there is a high demand for high quality plants.
How do you see the future of your business?
Xiuhai is a technically innovative company and, in addition to producing top-quality products, we aspire to market them with a brand.
We also cooperate with other companies. By relying on Anthura’s advantage of an almost infinite assortment in combination with the market, we will continuously improve our variety selection and plant quality. In the next three years, Xiuhai will focus on building product brands that target specific market segments. Currently, Xiuhai offers the Zhigege Phalaenopsis for online sales and the high-end L’Orchid brand for offline sales; as well as the branded Anthuriums Xiangshangzhang for online sales and Xiuhai Rainbow for offline sales.
What are the main challenges and how do you deal with them?
We are currently facing a number of major challenges, the most important being the impact of the current COVID-19 situation. Covid is currently hampering sales, and the drop in demand is putting pressure on production schedules.
By switching to smaller pot sizes with a shorter plant cycle and also changing packaging specifications, we are meeting the needs of small-scale wholesalers, such as flower shops and online retailers. They want small, eye-catching, high quality products. We developed a new product system to serve the new retail channels. Thanks to the logistics delivery system developed in China, small packages can be delivered to customers in a very efficient manner.
What do you think of the collaboration with Anthura?
During our 16-year collaboration, Xiuhai and Anthura have built up a mutual trust and good communication. Xiuhai is committed to providing customers with high-quality products in a stable and sustainable manner, and Anthura is a reliable supplier of high-quality young planting material. Hopefully, we can further strengthen our cooperation and communication on variety promotion and take advantage of Xiuhai’s excellent channels and brand strategy to jointly release more varieties that are popular with consumers. We have great confidence in our cooperation and in the future!