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W14652

FERNS N PETALS: FLOWERING THROUGH A UNIQUE FRANCHISING

MODEL

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V V Gopal, Suresh Kerani, and Balakrishnan Kondath wrote this case solely to provide material for class discussion. The authors do
not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain
names and other identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the

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permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.

Copyright © 2015, Richard Ivey School of Business Foundation Version: 2015-01-27

“Feelings need a language. No language could be better than the language of flowers.”1
-Vikaas Gutgutia, founder, Ferns N Petals
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In 1993, a botched order for a bouquet of flowers that Vikaas Gutgutia placed at a roadside flower stall
left him wondering if there was an entrepreneurial opportunity ready to be tapped. Though the flowers he
ordered were delivered, they were neither fresh nor in good condition. Gutgutia, hailing from a flower
growing and trading family, roped in a friend to set up Ferns N Petals (FNP), India’s first air-conditioned
outlet for the sale and home delivery of fresh flowers, in New Delhi the following year. Organized retail
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had picked up in India during the 1990s, providing growth opportunities for niche businesses.
Entrepreneurs across the country lapped up franchising opportunities. To tap the growing social
expressions market, Gutgutia scaled up FNP’s national footprint through a combination of own stores and
franchised outlets. From 28 stores in 2002, FNP’s network spread to 141 stores by 2012, 88 per cent of
which were franchisees.

Eighteen years after his venture started, Gutgutia had only a few competitors in the national branded
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flower business. By continuously diversifying the merchandise mix, adding e-retail operations, sharing
his clientele and vendor base with his franchisees and supplying trained manpower to his franchisees,
Gutgutia effectively leveraged the established brand equity of FNP. In 2009, Gutgutia took the
franchising route to scale up FNP’s most profitable business segment — floral decorations at weddings.
While the stores catered to individuals, the wedding market targeted both individual customers and
institutional clients. The service component in wedding flower decoration was relatively more varied in
terms of scale, image and criticality, compared to home delivery or bouquet sales to shoppers in its
outlets. Transferring FNP’s expertise to event management franchisees and monitoring them needed a
different approach. As Gutgutia and his wife, Meeta Gutgutia (director of Ferns N Petals Group), drove
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past FNP’s latest store in National Capital Region2 (the region’s 34th FNP store) in late 2013, Gutgutia
wondered whether the company’s franchising success in retail outlets through unique franchising
lifecycle management could be replicated in the wedding market segment.

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FLOWER USAGE IN INDIA

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Flowers had long played a significant part in India’s history and culture. Flowers historically played an
important decorative role at traditional Indian celebrations, but nowhere was their presence more
prominent or more appreciated than at weddings. Over the years, the use of flowers only for auspicious
occasions gave way to their daily use as decoration in homes, hotels and corporate offices, both for the

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ambience they created as well as their fragrance.

In modern times, flowers were offered as a symbol of love, affection, respect and courtesy. In restaurants,
they were even used to decorate dishes and not just the restaurant itself. The use of flowers by women in
rural and urban India to decorate their hair also continued to be extremely popular. Moreover, the
convenience of buying flowers online had increased their consumption.

As the income of the average Indian consumer grew, focus shifted from price considerations to a desire

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for better design and quality. Though flowers were traditionally sold by vendors who procured them from
local wholesale markets, there was a large segment of customers who were becoming increasingly
conscious of the quality and variety of flowers they gifted and received. To cater to this segment and fill
the gap, a few big retailers such as Ferns N Petals, Florista and others had entered the market in an
organized way.
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ENTREPRENEURIAL STRUGGLES

Identifying the Gap

Gutgutia spent his childhood in Vidyasagar,3 in a house located on a two-acre chrysanthemum farm. His
grandfather was a floriculturist, while his uncles supplied flowers to shops in Calcutta4 before setting up
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their own retail outlet, Plants and Flowers Boutique, in the 1980s. After his schooling, Gutgutia moved to
Kolkata for higher studies and subsequently relocated to Delhi. “When I moved to Delhi in 1993, there
were flower shops operating only as roadside stalls and the quality and service were not up to the mark,”
Gutgutia stated.5 Taken aback by the poor quality of flowers delivered by a roadside florist in Delhi in
1993, Gutgutia spotted an opportunity for a business. He elaborated:

I studied the entire Delhi flower market. I discovered that most customers were unhappy with the
quality and service of florists. The ambience of the flower shops and the way flowers were
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displayed were quite poor. There were only five or six players in the market enjoying a
monopoly. I realized there was a need for a good florist in the city.6

Though his family was in the business of growing and trading flowers, Gutgutia’s initial years of running
FNP were difficult. “My family had the same business in Kolkata, so I thought I would start something
similar when I moved to Delhi. My business had to be about making moments special for loved ones as
well . . . . There were no customized delivery modules in this business before FNP,” said Gutgutia.7
Pooling together an INR250,000 investment from a friend and INR5,000 of his own savings, the 24-year-
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old Gutgutia rented a store in the affluent Greater Kailash I area of South Delhi in 1994, branding his 200-
square-foot outlet as Ferns N Petals. The air-conditioned store offered relatively expensive fresh flowers
(with a door delivery option) and flower arrangement services. The tagline for the brand was: “Flowers,
anywhere anytime.”8

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The Problems

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To prolong the shelf life of perishable flowers, Gutgutia started sourcing directly from growers, bypassing
the middlemen.9 He recalled:

Previously, mandis (large markets) had local flowers only. There was very little scope for

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importing flowers from abroad. Moreover, there was no organized rental space and the concept of
gifting flowers was almost non-existent. The real challenge in running a business under these
conditions was to manage operations and the backend. FNP shops needed expert florists who
could make a good bouquet. To the company’s disappointment, such florists were not readily
available as there were no training facilities for this in India.10

Soon, a greater challenge arose. In 1995, the Municipal Corporation of Delhi launched a drive against

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illegal commercial establishments and sealed FNP’s outlet, rendering it inoperational. Gutgutia recalled,
“I did not lose hope and sold flowers from the roadside. My family thought I had lost it.”11 The following
year, his partner cashed out of FNP; by this point, Gutgutia had run up a debt of INR1.4 million.

In 1997, a chance order from a friend to handle the decorations for his wedding at Taj Palace Hotel, a
five-star hotel in Delhi, opened up a new revenue stream for FNP. The hotel’s banquet manager,
impressed by FNP’s decorations, established the company as a partner for all the weddings held at that
venue. Though in debt, Gutgutia managed to branch out in Delhi, establishing five more FNP outlets by
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1999. To overcome the shortage of trained florists, Gutgutia initially recruited traditional flower artists
from West Bengal to work at his retail outlets.

The wedding business subsidized his store operations, which had high overhead expenses. Gutgutia was
grateful for the additional revenue:
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Once my wedding business took off, it was instant money because it is a one-evening show and
you are paid a much larger amount than you get out of daily sales at a shop. The effort required
and the profit margins were much more positive in the wedding business than in retail. With that
money, I kept paying off my debt.12

BRANCHING THROUGH FRANCHISING

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Solutions

As organized retail grew through the 1990s (see Exhibit 1), more and more product categories became
increasingly professional. Niche services such as gifting came into the fold of organized retail, offering
professional services, a comfortable ambience and a wide assortment. Organized national players in
greeting cards such as Archies and Hallmark expanded their footprint through franchised outlets.

FNP’s first franchise store came up in Faridabad (part of National Capital Region) in 1999. Franchising
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offset the high store rental costs and ensured a steady revenue by encashing the brand equity established
since 1994. Being part of the social expressions segment, FNP had to be choosy about the location of its
stores, which made expansion through its own stores a costly proposition. Anil Sharma, vice-president,
retail and franchising, said, “We prefer our stores to be present in the high streets.”

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Through efficient logistics, FNP had managed to build a value proposition in a commoditized, perishable

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products business. Moreover, it had added several complementary product categories such as artificial
flowers, flower vases, photo frames, etc., to widen the assortment.

Franchisee Requirements

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The requirements for a potential FNP franchisee were:

 Store size of at least 200 to 300 square feet (owned, rented or leased);
 Store located on a high traffic road, with adequate parking space;
 Upfront payment of non-refundable franchisee fee of INR1-1.2 million (as of 2013);
 A fixed, monthly royalty.

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Before appointing a franchisee, FNP evaluated the catchment area of the proposed store and vetted the
promoter’s background. In a 2011 interview, Pawan Gadia, chief executive officer (CEO), said, “We
expect franchisees to expand the horizon of the brand while expanding the brand in terms of its physical
presence and also in terms of delivering the authorized brand value to its consumers.”13

The franchisees had to source fresh flowers themselves from the local wholesale markets and enjoyed
pricing flexibility.
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Franchisor Obligations

As the franchisor, FNP’s obligations to its franchisees were (see Exhibit 3):
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 Sending a visual merchandising team to design store interiors;

 Providing first fill of stock;
 Providing an air-conditioning system;
 Providing a computer and music system;
 Conducting a comprehensive training program in management, sales and technical operations;
 Supplying skilled manpower trained by FNP to help franchisees with the store layout (see Exhibit 2)
and the storing and packing of bouquets;
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 Providing training to franchisees on fresh flower management;

 Supplying flowers not available in the local markets, at the request of clients, at 20 to 25 per cent less
than the market rate;
 Sharing FNP’s vendor database with the franchisees for sourcing flowers;
 Passing on orders received directly by FNP for delivery in different cities across the country;
 Supplying a manual for store operations as per FNP standards of service;
 Passing on leads for local supplies;
 Paying a commission of 10 per cent to the franchisee on sales from reverse leads (leads from the
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franchisees to FNP);
 Conducting store revamps twice a year, at franchisees’ expense.

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Sharma explained further:

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We [also] run a convenience centre exclusively for our business partners, in which everything
required by any flower shop is made available at subsidized rates under one roof. This is the
biggest support for our business partners, wherein they can shop for all their flower shop needs.
Apart from this we offer a 90-day exchange policy along with credit of 30 days.

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FNP claimed that only six or seven franchisees’ agreements were terminated due to non-compliance of
terms and conditions.

Distributing Online Orders among Franchisees

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Every FNP flower boutique enjoyed exclusive patronage of clients within a two-kilometre radius of the
store. FNP’s policy was to have a minimum two-kilometre distance between any two FNP boutiques. In
the case of e-commerce orders, the shop closest to the recipient’s address was assigned the order to ensure
that fresh flowers were delivered at the stipulated time. FNP redirected deliveries in cities based on: a)
Location and postal code (the system allocated orders automatically so that the nearest florist by location
and postal code was given the first priority); and b) Capacity of the franchisee to handle the volume and
types of flowers ordered.
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As Sharma clarified:

We define the capacity of the franchisees on the basis of the performance of the e-commerce
orders. Performance parameters are: on-time order acceptance; on-time order delivery updates;
smooth e-commerce order operations; quality standards; availability of flowers; and delivery
service availability like fixed time and midnight delivery service.
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Control over Franchisee Operations

FNP monitored franchisee store operations by:

 Paying annual visits to the stores;

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 Following up with customers for feedback on services delivered on leads shared by FNP with
franchisees; in the case of unsatisfied customers, FNP imposed penalties on the franchisees or
arranged for re-deliveries;
 Fortnightly reports filed by the franchisees;
 Posting skilled manpower trained by FNP at franchisee stores;
 Binding franchisees to source non-flower merchandise only from FNP;
 Placing cameras in the outlets for remote surveillance on aesthetic display, quantity and variety of
flowers stocked.
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FNP devised its own parameters to evaluate its franchisees (see Exhibit 4). Sharma revealed:

Our quality control team makes surprise checks of the stores and submits detailed reports to the
head office. Moreover, we have a specialized retail software that gives us comprehensive details
on the daily operations of the stores. . . . We do not allow anyone who was once our franchise to

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operate from the same premise for a period of two years post-surrender/termination of franchise

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rights.

Support to Franchisees

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Every year, FNP organized an annual franchise meet to motivate franchisees and address any franchisee
questions or issues. Gadia stated, “We provide visual merchandising support every three months.
Moreover, we visit the stores and advise them on day-to-day issues.” Nita Wadhwa, a Delhi franchisee,
recalled, “FNP’s artistic ideas of using different materials excited me. The brand’s quest for innovative
products inspires us to do more than just sell.”14 In the words of Richard Anthony, manager of an eight-
year-old franchisee store in Hyderabad,15 “FNP’s network of vendors comes in handy, especially when
some special flowers are urgently required.” This outlet managed 70 to 80 deliveries per month, 90 per

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cent of which were generated online. FNP claimed a franchisee dropout of just 1 per cent and a six-month
average break-even period for an outlet. In the event of an outlet not making money for a year, the store
was closed.

FRANCHISEE LIFECYCLE MANAGEMENT

In traditional franchising models, the franchisor controlled supplies of the core product/service. However,
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FNP’s franchisees had to procure flowers from local markets on their own. FNP’s management of its
franchisees at different stages of the lifecycle is as shown in Exhibit 5.

COMPLEMENTARY INITIATIVES
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E-retail: FNP’s first brush with e-retail was when Indiatimes.com16 approached the company to deliver
flowers across the country for orders booked on its website. In 2001, sensing the potential of a new
channel, FNP launched its online retailing portal, www.fnp.com. Over the next six years, e-commerce
grew, contributing 25 per cent of FNP’s turnover of INR800 million by 2007.

Apart from its own e-commerce enabled website, FNP also advertised on and tied up multiple online
gifting portals.
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FNP Flori: While FNP stores mostly sold flowers that were available locally, in 2005, Gutgutia set up a
new chain of stores called FNP Flori to market exotic flowers. These were premium stores, to cater to
upstream customers who were willing to splurge for gifting unusual flowers.

Valaya Ferns N Petals: Tying up with one of India’s leading fashion designers, J. J. Valaya, Gutgutia
moved up the gifting value chain by launching Valaya Ferns N Petals in 2006.17

Business-to-business (B2B) selling: In 2007, FNP set up a marketing division and tapped the institutional
market by tying up with several portals to supply flowers.18 The company also entered into agreements
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with multiple corporate entities (see Exhibit 6).

Dedicated call centre: When its online payment gateway crashed two days before Valentine’s Day in
2008, FNP’s team had to call up customers and handle the emergency. Consequently, FNP set up a
dedicated call centre to provide a direct touch point to its customers.

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FNP Tahiliani: In 2009, Gutgutia tied up with another leading Indian fashion designer, Tarun Tahiliani, to

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set up FNP Tahiliani for exclusive flower arrangements.19

Backward integration: In 2011, FNP announced plans to set up a floriculture plant to produce five million
stems per year in Bengaluru20 to cater to the domestic and overseas markets.21

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FNP Weddings: The company set up FNP Weddings in 2011, to cater to the demand for floral decorations
during the busy wedding season. FNP supplemented the operations of its franchisees and its own stores
directly as well as through all of its supporting initiatives. Orders received through any channel for
deliveries in the territories of different outlets were redirected to the respective stores.

FNP in 2013

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FNP generated a profit of INR130 million on revenues of INR1.45 billion during 2011/12,22 delivered
flowers in 400 Indian cities and had 150 stores (of which 135 were franchised outlets) in 50 cities (see
Exhibit 7). E-commerce transactions accounted for one-third of its orders, and 85 per cent of its online
orders were delivered through its stores.

FNP sourced 95 per cent of its flowers from within India, from centres such as Bengaluru, Ootacamund,23
Nasik and Kolhapur. The country’s fresh flower market (see Exhibit 8) was estimated to be worth
INR800 million to INR900 million.24 FNP imported flowers from China, Thailand, the Netherlands,
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Singapore, South Africa and Australia. It set up three warehouses as distribution hubs. FNP’s floral
boutique offered a vast variety of fresh cut flowers, unique flower arrangements, exotic flowers, artificial
and dry flowers, and an exclusive range of home décor products such as scented candles, imported Italian
glass vases, potpourri and aromatherapy items.

With hundreds of vendors across the country, FNP promised same-day delivery in select cities for orders
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placed before 11:00 a.m. It tied up with 4,000 to 5,000 online links for promotion. About 25 to 30 per
cent of its turnover of INR1.45 billion was through online sales. While the average store purchase was
INR800, the average online purchase was INR1,100. FNP’s 50-seater call centre handled inbound and
outbound customer contact.

While the company had average sales during April to September, it witnessed an increase of almost 50
per cent in sales during the remaining six months of the year. Sales peaked on five occasions: Rose Day
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(February 7), Valentine’s Day, Mother’s Day, Raksha Bandhan25 and Diwali.

The returns indicated to the franchisees, as of 2013, were as follows:

 Break-even in three to six months;

 Profit of INR50,000 and above, depending on the store size and city of operation;
 Margins of 100 per cent and 200 per cent on the sales of gift items and fresh flowers, respectively;
 Each year, FNP gave an award to the best franchise outlet.
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FUTURE ROADMAP AND CHALLENGES

Expecting a turnover of INR1.75 billion in 2013/14, Gutgutia announced plans to set up FNP shops
abroad.26 Gadia envisioned backward integration into large-scale floriculture.

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In the fragmented domestic market, a few competitors with multi-city operations (see Exhibit 9) had

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emerged. An unperturbed Gadia said, “Our differentiators are the marketing and advertising activities we
have taken at the brand level.” Among the challenges he listed were high real estate costs to open shops
and “ensuring consistent and ‘wow’ delivery to every customer.” Tying up with gift houses such as
Archies and Crossword with the idea of selling FNP’s flowers as a bundled product had been proposed as
a marketing initiative.

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Tapping the Wedding Franchising Segment

Lavish, thematic weddings with customized décor and settings, and budgets stretching up to INR10
million were fairly typical among India’s affluent classes. These were elaborate, multi-day affairs of the
kind often featured in mainstream Bollywood27 movies such as “Band Baaja Baraat” and “Ferrari Ki

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Sawari.” Event management companies specializing in the design and execution of weddings catered to
this market demand.

Gadia noted that with two extended wedding seasons in a year, the wedding segment ensured stable
revenues for FNP throughout the year. “Weddings at farmhouses usually take place in the prime marriage
seasons of October to February and April to July, whereas parties and weddings at hotels take place
throughout the year,” he said.
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To tap the nationwide potential in the wedding segment, FNP appointed franchisees in five cities spread
across north, central and south India. FNP provided its wedding franchisees with the following:

 A comprehensive franchise training program;

 Exclusive wedding décor designs throughout the season;
 Established infrastructure support;
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 Trained manpower support;

 The latest wedding accessories at competitive prices under one roof at FNP Select;
 Distribution hubs in Delhi and Kolkata;
 Props available on rent or for outright purchase through FNP Prop Shop;
 The support of 20 international designers.

A major priority for Gadia and Gutgutia was to transfer the best practices in their franchised store
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operations to their wedding segment franchisees. Replicability and scalability of their franchising
business model to the wedding segment was the overarching concern. Sharma, however, pointed out that
the learnings from FNP’s franchise support team could be leveraged. “One key result area for our
franchise support team is to ensure and provide need-based assistance to all our business partners. We run
12 company-owned, company-operated stores and we do a lot of research and development on how to
increase sales, customer engagement, cross selling and up selling ideas,” he asserted. Transferring
expertise in managing franchised outlets to the wedding segment and monitoring the latter was the crucial
issue for team FNP.
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EXHIBIT 1: ORGANIZED RETAIL IN INDIA FROM 1990 TO 2000

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Following economic liberalization and the opening up of the Indian economy, one of the sectors that grew rapidly was
retailing. Organized retail’s share was growing very quickly in an expanding retail pie. Shopping centres, malls and
department stores cropped up across the country. Increasing urbanization and consumerism, coupled with a growing
young population and changing lifestyles and aspirations, led to a boom in retail formats.

To widen the geo-footprint of their stores, both Indian and multinational corporation (MNC) brands expanded their

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operations by appointing franchisees. This route not only was cheaper than investing their own money in the stores,
but also became a long-term revenue stream through franchise fees and royalty payments.

The growth in organized retail was fuelled by the rise in average household disposable incomes from 1990 to 2000,
up from INR69,249 in 1990, to INR93,542 in 2000. Between 1994/95 and 1999/2000, India’s consuming class almost
doubled from 29 million households to 55 million households.
Source: Note created by case authors based on: “The Bird of Gold: The Rise of India’s Consumer Market,” Report,
McKinsey Global Institute, May 2007, Exhibit 1.6, p. 29; and “The Great Indian Retail Story,” Ernst & Young, 2006, p. 10.

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EXHIBIT 2: VIEW OF AN FNP OUTLET

FNP Storefront
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Source: Company documents.

EXHIBIT 3: IMPORTANT CLAUSES IN FRANCHISE AGREEMENT

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Important terms of FNP’s franchising agreement with its franchisees:

 Monthly royalty to be paid on the seventh day of every month, reviewed annually.
 Franchisee to ensure entire ambience in terms of music, air conditioning, lighting, LED board and IP camera.
 Franchisee to print FNP’s website address on all stationery, as per franchisor’s guidelines.
 Franchisee shall not undertake any outside contract relating to flower decoration without the written consent of
the franchisor.
 Franchisees to conduct local advertising and promotional activities, at their own expense.
 The franchisee or its associates or sister concern or family members or any firm connected with the franchisee
will not create any website to do any kind of business that is similar to that of the franchisor.
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 Franchisees to send monthly sales report to head office and retain all books and records for a period of three
years.
 During the term of the agreement and for a period of two years after expiration or termination of the agreement,
the franchisee will not, either directly or indirectly, engage in any business that is similar to that of the franchisor.
 Franchisees shall not solicit customers from outside their assigned territory.

Source: Company documents.

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EXHIBIT 4: PARAMETERS TO EVALUATE FRANCHISEE OPERATIONS

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CATEGORY AVERAGE GOOD EXCELLENT
Board clean
Board lights working

FRESH FLOWERS

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Quantity
Quality
Variety

ARTIFICIAL FLOWERS
Quantity
Arrangements self-made

FNP BRANDED PRODUCTS

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Cellophane
Cake boxes
Message cards

DRY FLOWERS
Quantity

GIFT ITEMS
Quantity
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VASES
Variety
Quantity

UNIFORM

CLEANLINESS/MALI28 COUNTER AND

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BEHIND
MUSIC SYSTEM

DISPLAY
Colour-wise
Theme-wise

Remarks:
No

Source: Company documents.

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EXHIBIT 5: FRANCHISEE LIFECYCLE MANAGEMENT

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S No Franchise Lifecycle Stage FNP Support and Control
1 Penetration Supplying trained manpower
Visual merchandising support
2 Growth Sharing of flower vendors’ database
Monitoring customer satisfaction levels

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Supplying non-fresh flower merchandise
Defining the capacity of the franchisees
3 Maturity Monitoring of compliance with franchise terms and conditions

Extending cross-selling and upselling support

4 Late Maturity Supporting franchisees with extended business opportunities,
such as FNP Weddings

Source: Charles M Lillis, Chem L Narayana, and John L Gilman, “Competitive Advantage Variation Over the Life

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Cycle of a Franchise,” Journal of Marketing, October 1976.

EXHIBIT 6: TIE-UPS WITH CORPORATE ENTITIES

 Tata Sky, a direct-to-home (DTH) entertainment service provider, to facilitate ordering flowers
 Archies, a chain of greeting card outlets — for mutual promotion and sales on each other’s websites
 ICICI Bank, a leading sector private bank, to provide a 20 per cent discount to its customers on online
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purchases
 Kotak Bank, a private bank, to provide a 10-15 per cent discount to its customers on online purchases
 Indusind Bank, a private sector bank, to provide a 20 per cent discount to its customers on online purchases
 Taj Palace, Maurya Sheraton and Hyatt Regency hotels for their floral requirements
 Axis Bank, a private sector bank, to provide discounts to its customers on online purchases
 Reliance Mobile, a telecom service provider, to provide discounts to its customers on online purchases
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Source: Compiled by case authors from company sources.

EXHIBIT 7: GROWTH IN FNP RETAIL STORES

Year Own Stores Franchisees

2007 7 48
2008 10 60
No

2009 12 72
2010 12 86
2011 15 96
2012 15 91
2013 16 142

Source: Company documents.

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EXHIBIT 8: INDIA’S FLORICULTURE INDUSTRY

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The Indian floriculture industry was growing at a compounded annual growth rate (CAGR) of more than 30 per cent
29
during 2002 to 2012, and was worth INR37 billion in 2012. It comprised the florist trade, nursery plants, potted
plants, bulb and seed production and extraction of oils from seeds.

The industry comprised of a combination of traditional and cut flowers. Cut flowers such as bird of paradise flowers,

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roses and carnations were grown in controlled conditions in poly-houses. Traditional flowers such as
chrysanthemums and marigolds were grown in open areas with small investments. Roses were the most popular cut
flower and were grown all over the country. Other popular cut flower varieties grown in India were gladiolus, tuberose,
aster, gerbera, carnation, anthurium and orchid. Cut flowers had a high price and demand in the international market.

As of 2011/12, 0.25 million hectares of land was under flower cultivation in India, producing 1.6 million metric tonnes
of loose flowers and 7.5 billion cut flowers.30

Natural flowers accounted for 60 per cent of India’s INR350 million floriculture market. The market size of fresh

yo
flowers was expected to touch INR800-900 million by 2015.31

To promote floriculture, the Indian government offered subsidies for exports and establishment of cold storage units,
besides granting duty exemptions for imports. It also permitted 100 per cent foreign direct investment (FDI) in this
sector. Eleven model floriculture centres, six floriculture export zones and cold storage units at some international
32
airports in India had also been set up.

Other noteworthy facts about the industry include:

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 Sales doubled during the wedding season and on Valentine’s Day.
 Floriculture exports stood at INR42.5 million in 2012/13, INR36.5 million in 2011/12 (23.3 per cent increase from
2010/11), and INR29.4 million in 2009/10.
 India produced 1,000 tonnes of flowers annually; 0.5 million roses were produced daily.

With 65,000 hectares of land under floriculture, India accounted for 0.61 per cent of the global floriculture market.
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Source: Prepared by case authors.

EXHIBIT 9: FNP’S COMPETITORS

Player Profile
www.phoolwala.com Online delivery of flowers and complementary items
Florista Retail arm of Karuturi Global, the world’s largest
No

grower of roses. It has 11 stores in four states

Spring Blossoms Though it has one store in Mumbai, it delivers
across India through tie-ups with different florists in
different cities
Floral Mall Stores in four states
Floralis Stores in two states
www.fngstore.com Online store for delivery of flowers across India

Source: Compiled by authors from www.phoolwala.com, www.florista.in, www.spring-blossoms.com, www.floralmall.in,

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www.floralis.in, and www.fngstore.com. All websites accessed on January 14, 2015.

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617.783.7860
 Page 13 9B14A075

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ENDNOTES

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1
“What’s Next in Your Bouquet,” Tarun, September, 4(17).
2
National Capital Region encompasses New Delhi and its adjoining urban towns.
3
A city in the North Indian state of Bihar.
4
Capital of neighbouring state of West Bengal..
5
“Everyone’s Favourite Florist,” Femina, April-May 2012.
6
“Vikaas Gutgutia, Founder & MD, Ferns N Petals,” India Retailing, April 24, 2012,

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www.indiaretailing.com/article-detail.aspx?mcatid=23&catid=29&aid=8424, accessed January 28, 2014.
7
Ibid.
8
“Vikaas Gutgutia: MD, Ferns N Petals,” Your Story.com, September 24, 2008, http://yourstory.in/2008/09/vikaas-gutgutia-
md-ferns-n-petals/, accessed January 28, 2014.
9
Punita Sabharwal, “Running on Flower Power,” Entrepreneur India.com, September 2012,
www.entrepreneurindia.com/magazine/2012/september/RUNNING-ON-FLOWER-POWER_2-2-1/, accessed January 28,
2014.
10
Ibid.
11
Yeshi Seli, “Blooming Business,” Business India, May 2012.

yo
12
Sabharwal, op.cit.
13
Neha Prashar, “Bouquet of Franchise Expertise,” Franchise India.com, August 31, 2011,
www.franchiseindia.com/interviews/established/Bouquet-of-franchise-expertise-368/, accessed January 28, 2014.
14
“A Bouquet of High Returns,” The Franchising World, December 2012, p. 122.
15
Capital city of the state of Andhra Pradesh in South India.
16
A website belonging to Bennett Coleman & Company Ltd, publishers of India’s largest circulated English newspaper, The
Times of India.
17
“Fresh Flowers,” The Pioneer, October 10, 2006, www.fnp.com/flowers/faces/jsp/fnpNewsRoom2.jsp., accessed January
28, 2014.
18
op
Excerpt from The Economic Times, New Delhi edition, January 19, 2007,
www.fnp.com/flowers/faces/jsp/fnpNewsRoom2.jsp., accessed January 28, 2014.
19
“Designer Bouquet,” Hindustan Times Café, November 13, 2009, www.fnp.com/flowers/faces/jsp/fnpNewsRoom2.jsp.,
accessed January 28, 2014.
20
Capital of the state of Karnataka in South India.
21
Pravda Godbole, “Q&A: Vikaas Gutgutia, Co-founder & MD, Ferns N Petals: The Idea behind FNP Academy is to Promote
the Art of Floral Designing for Different Sets of Consumers,” Business Standard, August 8, 2011, www.business-
standard.com/article/companies/q-a-vikaas-gutgutia-co-founder-md-ferns-n-petals-111080800008_1.html, accessed
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January 28, 2014.

22
Prince Mathews Thomas, “Ferns N Petals Aims to Go Global,” Forbes India, September 19, 2013.
23
A city in the state of Tamil Nadu in South India.
24
“India’s Artificial Flower Business Blooms Abroad,” IANS, Hindustan Times, June 17, 2010.
25
An Indian festival that celebrates the bond between brothers and sisters, symbolized by a thread tied by sisters around
their brothers’ wrists.
26
Yeshi, op. cit.
27
Bollywood is the popular name of the Hindi language film industry based in Mumbai, India.
28
Hindi term for gardener or florist; here, the person preparing the bouquet or flower arrangement.
29
“Floriculture Industry to Cross Rs. 8,000 Crore by 2015,” The Economic Times, February 8, 2012,
No

http://articles.economictimes.indiatimes.com/2012-02-08/news/31037581_1_floriculture-industry-global-floriculture-flower-
industry, accessed February 3, 2014.
30
Indian Horticulture Database 2012, http://nhb.gov.in/area-pro/Database-2012.pdf, accessed February 1, 2014.
31
T. V. Satyanarayana and Anwar Huda, “Indian Floriculture Wins Cupid’s Blessings,” Floriculture Today, March 2013.
32
Annamma Oomen, “Flower Power,” India Now Magazine, India Brand Equity Foundation (IBEF), November 2008, 5(4).
Do

This document is authorized for educator review use only by Aarthy C, Christ University until Nov 2023. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or
617.783.7860