Every evening at the Kunming International Flora Auction Trading Centre (KIFA) in China’s southeast Yunnan Province, over 500 flower buyers sit on benches, glaring at the screen to bid on cut flowers by pressing a button.
Each bid has to be done in four to five seconds and the flower auction, which is used as a mechanism for price determination, will play a critical role in the cut flower market in Asia and China, as two-thirds of the cut flower transactions in China are made at KIFA, which is the second-largest hub for flower trade in Asia after Tokyo.
Flower Auction, which was first practised by the Netherlands hundreds of years ago aimed at protecting flower growers, has played an important role in the global distribution chain by determining market price, eliminating haggling and related problems, as well as mediating and settling all buyer-grower disputes.
In the auction hall, tonnes of fast-moving trolleys filled with fresh flowers will be displayed in front of the buyers, who will electronically bid on them according to the information on the auction screen. The atmosphere here is akin to a stock exchange.
KIFA uses the “the highest bid wins” auction method by using the clocks on the screen for price determination, whereby the clock starts at a high price and drops until the buyers press a button to stop the clock to bid.
KIFA, established in 2001, covers an area of 55,000 square metres, and has two auction halls with a total of nine electronic transaction clocks and 900 seats, and is able to accommodate up to 10 million deals daily.
The company has brought together 25,000 flower growers and more than 3,100 buyers in China, with a daily trade volume of two to three million flowers which can exceed five million flowers during peak season.
In 2014, over 750 million fresh-cut flowers were sold through KIFA.