Is the Pu’er Market Cooling Down?

Recently, the 《CCTV Financial Review》launched a special report named ‘Has the Pu’er market cooled down?’ In recent years, the Pu’er market has been widely noticed by people from all walks. At the mention of Pu’er tea, people always associate it with ‘appreciation, as well as skyrocketing and whopping prices’. However, the Pu’er market has declined from the second half of last year. The price of many Pu’er products has suddenly dived. Has the Pu’er market really cooled down?


The entire Pu’er market enter a period of adjustment

Pu’er tea has entered into a period of adjustment. Instead of cooling down, it is more like a temporary adjustment. From 2003, through continuous value exploitation and successful Pu’er culture developments, Pu’er tea’s value continued to appreciate and grow exponentially. As we all know, when the market value deviates from the product value too much, the bubble caused by excessive promotion will burst. Therefore, the entire Pu’er market entered a period of adjustment and gradually returned to a sensible developing trend.


The difference between Pu’er and other general investment collectibles is that Pu’er has the attributes of consumer goods simultaneously. From the history of Pu’er’s development, it has accumulated extraordinary quantity of customer bases. With the increasingly amount of people drinking tea, the quantity of consumers will keep increasing especially in ripe tea market that direct face to end-consumers. Will Pu’er tea really cool down? Well, I don’t think so. This regression is just a normal adjustment, and then with the gradually strategic transition to ripe tea and consumable tea products. I believe Pu’er tea market will usher a new springtime.


Pu’er ripe tea: the new favorite in the tea market

Raw tea always has a dominant position throughout the Pu’er tea market. The consumers who choose raw tea are mostly for collection. Because only after aging, raw tea will have higher drinking value. With the increasing year by year of tea consumption and in-depth promotion of tea culture, there are more and more young people know about and begin to drink Pu’er tea. At present, ripe tea is more popular with most Pu’er tea drinkers than raw tea because its taste is more acceptable. Ripe tea has gradually become a new favorite of Pu’er tea market. It is all known by people who are familiar with Pu’er tea that not only the taste of premium ripe tea is very good, it also has high aging value. After 3 to 5 years aging period, ripe tea will gain significant increasing in tea quality with generous palate for drinkers. Therefore, consumers can drink ripe tea while treating it as a collection.


The ripe tea is undervalued, and quantity of premium raw tea is limited

The value of ripe Pu’er tea is undervalued by the market all the time. It is no doubt that ripe tea is looked down because of the booming trendy of storage, collection and investment. It is a strange phenomenon that the market pays more attention to tea collection and long-term storage, but to ignore the ready-for-drink tea beverages. However, the fact is that results by far, which approve that Pu’er tea has a variety health protection functions such as hyperglycemic and hypolipidemic actions are obtained from the research of cooked tea. Therefore the value of ripe tea cannot be neglected from its function of health care enhancement.


To value the quality of both raw tea and ripe tea depends on the quality of raw material. In spite that the technique of blending and ferment are both highly demanded during the production, the inferior raw materials still cannot be selected to produce high quality ripe tea.


According to the feedback on general tea quality from tea lovers, who are very familiar with ripe tea and always love to drink tea, there are no huge differences of ripe tea products among all tea farms or tea factories. The reason, on one hand, is that the certain tea quality is hard to tell due to that the traits each kind of tea owns are temporarily covered after artificial fermentation and high temperature solidification. On the other hand, the fresh tea just collected from farms is not strictly selected while more premium fresh tea is used to produce raw tea.


There are still huge rooms of taste variety for boutique ripe tea company to develop. Whatever brand will gain the popularity, reputation, customers and chances of development as long as they can seize this almost blank market. After technology accumulation and raw materials reservation for many years, in 2015, one brand began to focus on product R&D in the field of boutique ripe tea to develop the brand – Menghai Spring Tea. They use high quality materials, refined fermentation technique and the perfect match with their huge volumes of raw materials silo to build an organic system linking with each other. Finally, they have developed a really boutique ripe tea.


Brand position is the key to open the ripe tea market


Dayi is the most successful company in ripe tea market. Not only has the brand Classic 7572 of Dayi been praised as a benchmark of Pu’er ripe tea, other classic brand ripe tea such as Jinzhenbailian, Danqing, etc. are also very popular products. Dayi ripe Tea use low-price and populism strategies and rely on accurate target marketing to gain dominant leading position among other contemporaneous competitors. Their businesses strategies focus on customer reputation to win the best develop opportunities. When you review the Pu’er market today, there are many ripe tea company but few of them can provide indeed superior high quality mature tea.


Strong brand is urgent needed to target boutique ripe tea market because the real superior ripe tea is very rare and scarce. As the theory of brand position, any brand can gain the largest market share and good profit margin as long as it monopolizes a niche market. In this year, one brand of High-end Ancient Wood Pu’er promoted a brand position of spring tea fermentation. They are the first one to raise the definite concept of ripe tea from the fermentation of spring tea in industry. The production costs and investment risks of ripe tea from spring tea fermentation are very high because of spring tea is the best one throughout the year. Nonetheless, the ripe tea from fermentation of spring has really high quality with the characteristic of thick taste, good smell and smooth mouthfeel. That brand sticks to use spring tea to ferment ripe tea to achieve differentiation strategy from other brands. They firstly target and seize boutique ripe tea market which has huge potential in market development. Ultimately, the thousands of tea consumers will be the biggest beneficiary when the boutique ripe market be captured and developed.