Tea in China

PROSPECTS

Government initiatives benefit the category

The government’s focus on tea quality and production efficiency saw restructuring of the industry continue in 2018. In February 2017, the government first brought up the topic of expanding the country’s advantages in tea.

Consumers more knowledgeable

Rooted in traditional Chinese culture, tea enjoys an easy connection with consumers. In 2018 there were numerous tea products available, ranging from packaged tea to drinks from street stands, and consumers were exposed to various choices and social media information.

Tea still relies on offline channels to achieve growth

The traditional Chinese tea industry remained region-orientated – with product availability in retail outlets a significant factor in the purchase decision. Players continued to find it difficult to expand their businesses and encourage different tea-drinking habits and preferences due to limited penetration.

COMPETITIVE LANDSCAPE

Leading players choose online channel for promotion

Key sales areas for more than half of the income of most tea companies. To appeal to younger and larger consumer bases, leading players increased their online activities.

Slimming tea and instant tea decline

Slimming tea and instant tea continued to lose popularity due not only to the greater number of alternatives available but also to changing habits. Consumers seeking to lose weight are increasingly likely to raise their level of physical activity rather than purchase slimming tea products.

Innovative business model draws attention

Creative management brought vitality to the tea category. From the private label Yanxuan to Youpin, high-tech companies showed interest in tea.

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