The awkward position of Chinese tea – What is missing?

Nowadays, the way of promotion for Chinese tea is becoming increasingly narrow. The issue of product and culture is the key point that Chinese tea industry and companies are faced with. As a National Drink of China, thousands of years of tea culture is deeply ingrained, extensive and profound. However, there are very few scale sales of brand products. The industry does not lack of resources (bases of tea garden), brand descent (the long history), consumer base, and consumption custom, even background (state-owned companies) and capital force. Why we cannot establish a big tea brand? What is missing?

At the time of decreasing influence of Chinese traditional culture on young people, we cannot just emphasis on the history and cultural property of tea and neglect its basic consumption function of a kind of drink. This negatively influences tea in becoming a more and more confusing brand rather than meeting consumer needs as just a “drink”.

Who could revive you? Chinese tea in an awkward position

  1. Focusing on the major consumer groups-young people

The consumption groups in main production areas of tea almost cover all ages. As brand tea companies, they must deal with issues of education for the major consumer groups in main sales areas. The basic consumption model of tea should not only be a gift in business or government fields, but also be deeply rooted in the daily work, study and leisure time of local young consumer groups as their main source of beverage consumption. Therefore, it is incumbent for entire Chinese tea industry to educate young people on the culture, nutrition and healthcare of Chinese tea; including ways in which Chinese tea is brewed and drank.

  1. Positioning mass consumption

The young people who are still in school or just starting their careers have limited spending power. It is hard to attract young people if the price of a signal cup of tea is higher than a bottle of tea beverage (the general retail price is 3.5 RMB per bottle in supermarket). All in all, the convenience of buying a bottle tea beverage is slightly better than making a cup of tea even its ingredients and nutrition are always been criticized. As a result, the price of a single cup of tea is a critical issue and obstacle that avoid young people’s consumption.

  1. Pursuing competitive strategies

The reasons of preventing Chinese tea consumption of young people are not only the high-end positioning of tea, but also Chinese tea’s history and cultural background run contrary to young generation’s current consumption custom. The “fashionization” of Chinese tea could be embodied in the brand culture, style of stores and packaging, and the ways of Chinese tea’s brewing and drinking, etc. In this respect, it is necessary for tea companies to learn from Starbucks-how to integrate the consumer experience in stores with young generation’s emotional needs?

  1. Building diversified sales channels

Because of young people is buying tea in POS terminal. It is idealism if tea companies lack of building of channels, no matter how fabulous their marketing strategy for young generation is. So how to build a matched sales channel between their power of control and building cost is an inevitable challenge for each tea company to deal with. The exclusive chain store model that most tea companies of Fujian province use which is not a good example for building channels of tea company. The exclusive store of tea company should be more like a window to show their brand image, a center for consumer experience and a platform for retail training, meanwhile, use other forms of POS terminal as main sales channels. Although have strong power of control, the operation cost of self-construction sales channels is very high and increasing every year which is becoming a great burden on many tea companies with chain direct sales model. Tea companies’ ambition may fail within an ace of winning if they are without the aid of different kinds of shared channels to realize rapid distribution, widely sales point spreading to occupy the POS terminals that are conveniently appeared and bought by young generation. It is imperative for tea companies to achieve product differentiation and segmentation, build multiple sales channels, construct diversified and complementary POS terminal network.

  • Product marketing:

Through various forms such as agency, special offer, customization, merger and acquisition to cooperate with a variety of tea stores (eg, WUTAIYU, ZHANGYIYUAN) to develop product sales.

  • Supermarket business:

Cooperate with different kinds of supermarket chains to sell pre-packaging tea product (three major cooperation models: off-market store-in-store lease, on-site counter sales with joint operation, and purchase and sale cooperation for product display) to meet young generation’s personal or family reserves needs.

  • Teabag:

Develop various types of teabag by differentiation strategy to enter supermarket chains, chain convenience store sales and meet business offices’ convenience consumption demands.

  • Online sales:

Develop E-commerce channels by direct sales online, cooperation with TAOBAO platform or tea specific E-commerce portals like YIFUTANG to do marketing promotion to young generation countrywide.