Dubai-based b2b e-commerce platform Floranow carves its place in the global cut flower market

FCI interviewed Dubai-based Charif Mzayek, who, back in 2016, founded Floranow, a global, B2B e-commerce platform that connects wholesale flower growers to buyers. The B2B e-commerce marketplace enables sellers to reach more customers than possible and presents buyers with a broader assortment than the traditional wholesaler.

Charif Mzayek is of Palestinian descent. Just like for many other Palestinians, displacement is all too familiar for him and his family.
Being the son of two-time refugees – first from Palestine and the second time from Lebanon during the Lebanese Civil War – Charif was born in Beirut in 1967 and later grew up in Amman, the capital of Jordan.

Mzayek and his two siblings grew up surrounded by the blooms in their parents’ flower shop, always ready to lend them a helping hand during the after-school hours and the weekends.

After graduating from university in the USA, Mzayek earned audio engineering technology and film production degrees. Then, he got back home to see his family in Jordan. What he thought was a little family reunion turned out to become a lifetime career in the flower industry because it was during this trip that he decided to join his parents’ business which had by then grown by leaps and bounds and included several flower shops plus a flower farm in the early 1990s.

The Mzayeks made a great team and managed to expand their local business to several countries across the Middle East, mainly specialising in growing, trading, retailing, and decorating 5-star hotels. Floranow emerged from these activities in 2016.

Through its online marketplace, UAE-based Floranow enables direct, transparent, and efficient transactions between growers and buyers worldwide while optimising the cold chain to ensure the freshest quality of products for all stakeholders.

Charif Mzayek founded Floranow in Dubai in 2016, and today, it has become a global, B2B e-commerce platform that connects wholesale flower growers to buyers.

Today, the Mzayek family has a majority stake in Floranow, and the company is fortunate to have, as Mzayek calls them, ‘some of the most distinguished and innovative venture capital funds of the region’ as financial partners.

Floranow employs 160 professionals, and its yearly projected revenues lie between the euro 40 m and 50 m bracket. The company primarily focuses on cut flowers sourced worldwide, while plans are in place to add indoor plants such as potted orchids, cacti, succulents, and floral accessories for the UAE and Saudi markets in the second half of 2024.

Floranow has built a team over the years, forged solid partnerships with growers/exporters across four continents, and succeeded in digitising what has traditionally been a very conservative floral sector in the Middle East. Mzayek proudly says, “When everyone told us in our earlier years that we wouldn’t be able to build a sustainable, B2B floral online business, we succeeded in growing and thriving as our journey went on.”

Learning from the past

Processing flowers at Floranow’s warehousing premises in Dubai.

Floral wholesale is one of those industries steeped in tradition, notoriously known for sticking with what is known and avoiding change. Yet, from the onset, Mzayek understood that to make his new company thrive, it needed sophisticated tech, well-oiled logistics, and just-in-time delivery to align with changing customer expectations and industry trends.

He also knew the importance of learning from the past. Several things opened his eyes. He elaborates, “Over the years, I have become familiar with several of the daily pains and challenges that flower growers and buyers face. Lack of transparency, price volatility, and long and inefficient supply chains that add up costs and impact product quality are just a few examples. Buyers are often limited in their choice of products offered by traditional suppliers/wholesalers, while growers are limited in their market access. And while buyers pay more, growers get less for their crops due to an ineffective and obsolete system.”

One-stop shop for a broad customer base

The Floranow e-trading site currently serves over 1,200 retail shops, wholesalers, event organisers, hotels, supermarkets in the UAE and Saudi markets, and importers in over 20 countries.

Regarding the wedding and event industry, Mzayek says it is an industry where high-end flowers occupy pride of place. “It is a growing sector with more sophisticated players looking for special flower shapes, textures, and varieties as they constantly try to innovate. However, the increase in the usage of artificial flowers to decorate weddings and events (mainly driven by cost factors) is a worrying trend for our sector.”

Particularly in the wedding and event market, the availability of niche-type flowers is essential for a diversified product offer. Mzayek notes, “We are seeing more African growers expanding their assortments to include specialities and several unique varieties. Clients welcome this move across various sales channels as it offers more differentiation options. However, I worry about specialised Dutch growers facing the combined pressures of high energy and production costs along with a more stringent business environment that might threaten the viability of their businesses in the long run.”

Mzayek notes, “We aim to be a one-stop shop for our buyers, where they can source flowers grown around the world while providing a very efficient digital sales channel and logistics solutions for our growers and exporters.”

Floranow, being an online player, has an intrinsic advantage: data. Mzayek says, “The analysis of data sets gathered over the past several years provides us with a deep understanding of emerging trends communicated to our suppliers, helping them optimise their offers to match demand better. Our main grower base is in Kenya, followed by The Netherlands, Colombia, Ecuador, Ethiopia, Thailand, Sri Lanka, South Africa and China.”

When referencing the Dutch growers, he says, “Dutch flowers have the advantage of being produced by growers with decades of experience with a laser-sharp focus on specific crops grown at scale that require a certain degree of technology and infrastructure not readily available elsewhere. Dutch growers also benefit from an unparalleled logistics base, giving the Dutch floral industry a unique advantage.”

When asked about nearby India and Iran and their potential to become the new floriculture powerhouses, he says, “Regarding India and Iran, there has been a consistent growth in production over the past years mainly driven by strong local demand. I expect those trends to continue over the next few years, but whether those countries will emerge as global players in the export sector is yet to be seen.”

Bold steps in cold chain management

According to the United Nations, the Middle East and North Africa (MENA) are among the most vulnerable places in the world to climate change. Temperatures well above 50°C are no longer an exception, and scientists warn that the region is warming at twice the global average and will be an additional four degrees Celsius warmer by 2050. It is, therefore, not surprising that Floranow has taken bold steps in cold supply chain management.

Mzayek elaborates, “Having put logistics at the heart of our model since day one gave us great control over the quality of our supply chain in terms of temperature control, speed, and efficiency. We work closely with our partners, be it a grower, an airline, or a logistics partner, to ensure an uninterrupted cold chain from farm to florist. In addition, Floranow’s fulfilment hubs across the region and our last-mile delivery structure ensure that products are kept at ideal temperatures throughout their journey.”

Challenges and opportunities

Asked about his global view on the challenges and opportunities for the global flower market and how he would rate the growth potential of the Middle East, Mzayek sees a future in which the global flower industry is more connected through digitisation and integrated networks, resulting in increased efficiencies across the various parts of the supply chain. He comments, “The main challenges will be environmental, due to climate change and the scarcity of water resources, and consumers increasingly demanding more sustainable products. This situation might change certain consumer purchasing patterns. The Middle East remains a growth market thanks to both strong economic growth forecasts for most economies of the region and the many yet unexploited opportunities in the floral sector.”

How much retail and societal pressure is there to trade more sustainably grown flowers and plants? “The trend is not yet there in the Middle East, although we predict consumers will be demanding more sustainable products in the future and will also seek more locally grown products.”

Market data

The Middle East is a region that is overly dependent on imported blooms. Data from the United Nations Comtrade, the International Trade Statistics Database, indicate cut flower imports were worth $124 million across the Cooperation Council for the Arab States of the Gulf, aka the Gulf Cooperation Council (GCC*) in 2017, a 65 per cent increase from $75 million in 2010. Mzayek adds, “Our own research estimates the floral and indoor plant market in the GCC stands at $500M with a forecasted CAGR growth of 5.22% (Kingdom of Saudi Arabia, KSA), 4.25% (United Arab Emirates, UAE), and 2.09% (Kuwait).”

There are a handful of flower farms in the GCC. “There is local production in KSA (Astra Farms and Al-Moghtarra Agricultural Company combined, spanning an area of 40ha) and in Kuwait, home to a one-hectare farm producing home-grown cut lilies. Apart from that, all flowers are imported. Unfortunately, we don’t have clear data on houseplant production as we are still gathering market data on this activity.”

Mzayek sees a major shift towards digitalisation, which gives his company a clear advantage as Floranow is primarily a digital business endeavour. There is also more association of flowers with other gifting articles such as chocolates, perfumes, etc., and a growth in purchases of flowers for their use through both online and traditional supermarkets/grocers. Both trends contribute to increased per capita flower spending in the GCC.

The latter is not easy to determine. Mzayek expounds, “With the absence of reliable, official data, all we can do is a ‘back of the envelope calculation’: assuming GCC’s $500M estimated market size divided by a GCC population of 59M brings us to approximately $8.5 yearly per capita spend.”

Can supermarket intervention help increase the purchase of flowers for one’s own use? Mzayek says, “We have identified various growth opportunities in the supermarket sector and already forged several partnerships with supermarket chains in the UAE and KSA since we see supermarkets as a fast-growing sector in the Middle East. We are offering a “Total Floral Solution” to our supermarket partners, including product design, assembly, sourcing, and delivery of ready items directly to stores and distribution centres.”

Dubai Flower Centre

Industry veterans will remember how, 20 years ago, the Dubai Flower Centre burst upon the horticultural world stage, causing a stir (and not a few raised eyebrows) over its proposed state-of-the-art flower distribution centre in the Middle East.

Mzayek previously worked as CEO of Alissar Flowers International, where he signed the first tenancy contract with the Dubai Flower Centre in 2006. Has the project been successful, and what is its logistics role today?

Mzayek says, “Actually, we were the first company to set up business in the facility. Even though several of the initial concepts promoted by the DFC never materialised (i.e., the creation of an auction-like system, a trading floor, etc.), we greatly benefited from our presence at this state-of-the-art logistics hub that is superbly served by airlines worldwide. Today, Floranow’s HQ is the Dubai Flower Centre and includes offices, cold storage and processing areas.”

Operating out of Dubai offers excellent advantages, such as access to a diverse talent pool, exceptional infrastructure, and a vibrant entrepreneurial ecosystem supporting startups like Floranow. Mzayek: “Currently, 35 per cent of our business happens in the UAE, while the rest is generated in the Kingdom of Saudi Arabia (KSA) and from our international business unit.”

Consumer demand

Floral holidays fuel a boom in cut flower sales, and the Middle East is no different. Mzayek expounds, “Valentine’s Day is gaining in importance every year. Countries that have previously put restrictions on events such as Valentine’s Day have now lifted all limitations, which resulted in almost the tripling of demand compared to previous years. The second most important event is Arabian Mother’s Day (March 21, which also marks the beginning of Spring). The two important Muslim holidays, Eid El Fitr (marking the end of the holy month of Ramadan) and Eid El Adha (marking the end of Hajj or pilgrimage season), are also very important occasions to buy flowers mainly for gifting.”

Valentine’s Day sales are a good barometer of the market. How would Mzayek describe the current state of the cut flower market? He replies, “Despite the relatively good availability and quality of flowers in general, the main challenge of this year’s Valentine’s season has been the availability and cost of airfreight space out of Kenya, which is the major source of roses sold in the Middle East. Less capacity has been offered compared to previous years, and airlines introduced sharp rate increases which resulted in intense pressure on both cost and distribution plans.”

It is safe to say that the Houthi rebels attacking cargo ships in the Red Sea have caused a spike in air cargo volumes and rates. Much, much worse yet, the destruction and the death toll of the Israel-Gaza war is massive. Mzayek, with pain in his heart, says, “The activities of Houthi rebels in the Red and Arabian Seas are not impacting our business directly as we are not currently shipping flowers by sea. However, the ruthless Israeli attack on Gaza, killing and injuring over 100,000 Palestinians, the majority of whom are women and children, is greatly impacting the general mood of consumers across the region, resulting in less spending on flowers.”

There is no such thing as one Middle East market

There is no cookie-cutter approach to successfully selling cut flowers in the Middle East. Mzayek explains, “The main misconception is that there is one Middle East market!! Totally false. Consumer tastes vary across different markets, including cities within the same country. Saudi Arabia is the best example. Exporters should realise that the Middle East markets are very open and connected to growers/exporters from Africa to Europe and from South America to Asia, and thus tend to be very competitive.”

To conclude, Mzayek stresses that Floranow will focus on consolidating its position as a market leader across all sales channels in the UAE and Saudi markets. “We aim to expand to other GCC countries and grow our international business, connecting more growers and buyers via our digital platform worldwide.”

* The Gulf Cooperation Council (GCC) is a regional, intergovernmental, political, and economic union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The council’s main headquarters is located in Riyadh, the capital of the Kingdom of Saudi Arabia (KSA) The Charter of the GCC was signed on 25 May 1981, formally establishing the institution.

This article was first featured in the April 2024 issue of FloraCulture International.