Floribusiness Blogs The Battle of the Digital Platforms

The Battle of the Digital Platforms

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The floricultural industry is on the eve of some fierce competition between digital platforms, all fighting to get the attention of the customer.

Over the years we’ve seen the emergence of a digital, disruptive ecosystem, consisting of a few very large and wealthy, listed, international players on one side and a huge number of relatively small web shops of individual, small to medium-sized producers and traders on the other side.

Royal FloraHolland, originally a physical marketplace, is hoping to survive in the digital world as FloraMondo. By clustering their members’ web shops into one, they’re providing customers access to a very wide range of products. This service package fits in with the generated flow of  transactions and together with the transaction fees, it makes for Royal FloraHolland’s revenue model.

The flow of transactions between members and exporters, which was built up in the past, forms the starting point of FloraMondo’s future. If Royal FloraHolland wants to survive as an organisation, it’s crucial that the number of transactions between suppliers and customers is maintained and increased.

But what if Royal FloraHolland linked the suppliers directly to the customers, or potential customers of their customers? A direct connection between a Kenyan supplier and a Chinese importer or retailer for example. Probably quite easy to establish, but it wouldn’t be without risk. Why?

Dutch trading firms don’t like their business being snatched away like that. So, they launch a platform by themselves, or together with a few colleagues, where national and international suppliers place their web shops or their supply, they build up a pool of existing and new customers plus existing and new suppliers and they offer excellent customer service including logistics and secure payment systems, not in any way inferior to Royal FloraHolland. This would be a direct attack on Royal FloraHolland’s position of course.

At the moment, the top ten members of the VGB generate 50% of the transactions at Royal FloraHolland. 70% of these transactions consist of direct transactions between supplier and customer – payment is the only aspect that’s still handled by Royal FloraHolland. If all of those transactions took place on a platform jointly hosted by traders offering all the required services, and the large, global platforms got involved in the battle for interaction with the customer as well, who knows where that would end…

So maybe growers and traders should try to collaborate on a joint platform after all, in order to maintain the Dutch market leader position.

Herman de Boon,

President UnionFleurs

 

 

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