Marina Popescu, general manager at Floria.ro, tells Business Review about the strategy behind the online and offline arms of the Floria Group and highlights the main challenges that the company faces in a market dominated by a high level of fiscal evasion.
What does the Floria Group consist of now on the Romanian market and how much have you invested in this business so far?
At present the Floria Group includes two major divisions: online, where Floria.ro is the market leader on the bouquet delivery segment, and offline, where it runs the Floria in Strada flower shops and the corporate, events and visual amenity departments. The investments made in the past two years exceed EUR 500,000.
How much do the online and offline sales make up in your turnover?
Our prediction for 2016 is that the website will represent about 40 to 45 percent of our income, while flower shops and events will account for about 40 percent. The remaining 15 percent is made up of flower setup projects.
How has the online division developed over time and who are its main customers?
The online division posted a EUR 1.05 million turnover in 2015, an increase of 40 percent on 2014. It consolidated its leading position among local online flower shops. The consolidated turnover of Floria Group reached EUR 1.8 million last year, compared with EUR 1 million in 2014. More than half of our sales were generated by the online platform. In addition, in the first quarter of 2016, the group posted EUR 900,000 in sales throughout all of its divisions. Individuals are the main customers of our online platform.
How about your offline development?
At present the company operates through two flower shops in Bucharest – Floria in Strada – which both opened last year, the result of an investment of more than EUR 300,000.
When did you launch the Floria concept store and why?
After we took our first step in the offline environment, by opening a flower shop on Campineanu Street in Bucharest, we realized that we wanted to offer our Romanian customers a different concept designed to be more than a flower shop. So we created a concept for a premium location where, along with a wide range of special flowers, bouquets and flower pots, we exhibit products designed by local artists. And we don’t want to stop at the concept store in Dorobanti Plaza as we intend to develop Floria in Strada nationwide, making use of the franchise system. The total investment in the Floria in Strada concept store exceeded EUR 200,000 for a location of 200 sqm in Dorobanti Plaza. It has a unique concept that will be the base of the development of a national chain of flower shops.
What terms do your franchise holders need to meet?
We intend to extend our business by franchising it because we want a rapid pace of development. We target large cities of over 100,000 inhabitants and we focus on central locations for our franchises. It is important for us that Floria in Strada flower shops be in ultra-central locations so that they can attract many visitors who can discover the experience of buying flowers and gifts designed by local artists in a premium location and at the right price.
How are the other divisions of Floria Group doing?
This year Floria started its first large projects in the area of commercial flower and visual amenity set up, by winning two significant projects: Park Lake and Veranda Mall. The project we developed within the partnership with Park Lake was very ambitious and it is likely to become a benchmark for the Romanian flower and visual amenity setups. It is probably the most valuable floral setup project from a retail center in Romania. The project needed about 10,000 plants and flowers in order to create a synergy between the interior of the commercial center and its adjacent park. As for the Veranda Mall project, it involves external setups for about 5,000 sqm, with greensward, trees and other plants. Because the commercial center is designed to have external restaurants, the green zone will be extremely important as it will offer a generous green area.
Both the shareholders and management of the Floria Group are 100 percent Romanian. How hard is it for a purely local company to grow and develop on an emerging market like this one?
The very high level of fiscal evasion is the main problem facing the market on which we are active. Despite the occasional efforts of the local authorities, the black market for flowers represents more than 50 percent of total sales. There are plenty of flower shops that sell their flowers without issuing a fiscal coupon, and paying VAT or other taxes. Fortunately for us, what they sell is of very poor quality – both as products and the design of bouquets – and customers have started to avoid buying such flowers. Slowly but surely, customers will understand the importance of the design of a bouquet and will see the significance of buying a bouquet created by a well trained florist. But there are still opportunities for development on the market.
What are your plans for the future?
We intend to develop new business areas in the flower sector and to consolidate our existing ones. We will continue to invest to make the entire group a market leader.