Afternoon tea culture is making a comeback

April 5, 2022

BEIJING – Coffee and snacks are also jumping on the consumer bandwagon

With improvements in consumption driven by rising purchasing power and living standards, Chinese beverage consumers are participating in a shopping windfall, leaving a large market space for post-tea-related brands. midday.

On a typical Sunday afternoon, Hai Mian, a 29-year-old programmer in Shenzhen, Guangdong Province, takes his girlfriend to a shopping mall near their apartment in Nanshan District. They first go to a handmade dorayaki shop to buy a box of Japanese pancakes, then visit a nearby teahouse.

At the tastefully decorated teahouse, Hai often orders a cup of Jasmine Matcha Eisbock for his girlfriend and a Royal Earl Gray black tea latte for himself.

“The two drinks each cost about the same as two Starbucks coffees. However, we prefer beverages here, because the shop offers diversified choices with refined flavors. For example, my Royal Earl Gray Milk Black Tea has both the flavor of Earl Gray and the bitterness of coffee,” Hai said.

Bei Bei, Hai’s girlfriend, opens a box of dorayaki pancakes, saying, “New Chinese consumer brands that offer afternoon tea sets amaze me. Same as the tea house, the dorayaki pancake shop indeed wins my heart. Take this box of dorayaki as an example. There are four pancakes in the box, and the recommended sequence to enjoy their taste is regular cheese first, then cherry mousse, Earl Gray cheese, and cinnamon mousse, since it’s best that the palate gradually appreciates a lighter to heavier taste. The whole tasting process has a very good sense of hierarchy, providing the ultimate drinking experience.

Whether judging by the slew of new Starbucks outlets constantly popping up or local beverage brands springing up like mushrooms, the Chinese afternoon tea market is transforming into a younger category, trendier and faster.

According to a report jointly launched by food delivery platform Ele.me and Alibaba’s research arm AliResearch, between 2015 and 2021, given the digitalization of China’s restaurant industry and upgrades of consumption, drinking habits and product formats of the country’s afternoon tea market have undergone two critical metamorphoses.

Before 2015, afternoon tea consumption was mostly offline, and the main places of consumption were mid-to-high-end teahouses, restaurants, and hotels. From 2015 to 2020, the scenario gradually shifted to workplaces. Since 2020, with the rise of guochao – where consumers increasingly appreciate local elements – afternoon tea drinking has become more closely aligned with traditional Chinese culture, and more snacks, such as braised foods and fried chicken have been incorporated into the category.

The tea market still has great potential that remains to be fully exploited. With the growing influence of the digital age, Chinese tea enterprises have gradually evolved from traditional teahouses and simple online tea sales platforms to various new business formats. Taking advantage of new ways of retailing and consuming, they are actually getting smarter in exploring channels and building brand image.

T9 Premium Tea, the teahouse that Hai and his girlfriend often visit, is a glimpse into how new Chinese beverage brands are enjoying the fruits of success. Founded in 2017 in Shanghai, in nearly four years, the company’s monthly sales in its first outlet in the city, which occupies only 28 square meters, has reached nearly 600,000 yuan (94 $459). On peak days, the daily turnover ranges from 40,000 yuan to 50,000 yuan, according to company data.

Wu Jianqing, CEO of T9 Premium Tea, said that currently the company’s tea portfolio includes three series: Colorful Collection, Legend Collection and Royal Collection. In total, more than 50 storage units cover black, herbal and fruit teas. Prices range from 100 yuan to 10,000 yuan per package, satisfying the demand of diverse consumer groups.

“Initially, we chose to explore the tea drinking market in China with the affordable Colorful Collection, which had an average unit price per customer of around 300 yuan. The redemption rate has reached 40%.

As for the secret of T9’s success, Wu said that on the supply chain side, the company cooperates with a 200-year-old tea supplier based in Hamburg, Germany to ensure flavor quality.

In addition, T9 has built its own warehouse to store tea leaves of different categories and has made great efforts in product quality control.

Other new Chinese beverage brands are also making progress. Guangzhou Zetian Trading Co Ltd, the dorayaki maker Bei loves, has launched stamp-collecting events, attracting dorayaki lovers to visit stores and buy their pancakes. Similarly, Shanghai-based Pros Coffee Roaster has developed Blue Latte, a flavorful blend that ranges in color from blue to white to appeal to visually oriented but “picky” coffee lovers.

Industry experts said that with the rise of Gen Z, consumers’ food and drink choices have been constantly improving, and the pursuit of health and quality now dictates trends. This is equally true for female and male consumers.

Raming Zeng, head of marketing department of Dongguan, Guangdong-based confectionery maker Hsu Fu Chi, said, “Instead of just pursuing delicacy, consumers prefer high-end afternoon tea choices. The new trend prompted us to remain vigilant to detect high-end and more diverse consumer needs and adjust our business strategies. For example, this Spring Festival, we launched 38 kinds of confectionery, 13 of which are new products, covering categories such as candies, cakes, gift boxes and chocolates, to provide a rich choice for consumers. consumers.

According to the report by Ele.me and AliResearch, currently the top four driving forces of China’s afternoon tea market are new consumer needs, supply shortages, industry coordination and government advice and oversight.

“Although the pandemic has brought many setbacks, afternoon tea drinking habits have formed and a new cycle of high-speed growth is looming. Meanwhile, market cultivation in some third- and fourth-tier cities has been initially completed, and the upper echelon of the afternoon tea market on the traders’ side has also been formed. Soaring demand has allowed businesses to expand rapidly,” the report said.

Bo Wenxi, chief economist at marketing firm Interpublic Group China, said: “Amid improvements in consumption, it is inevitable that people will buy healthier and higher-end afternoon tea products. . Therefore, merchants should pay more attention to changes in consumer demand and realize the close coordination between marketing, promotion, storage and sourcing so as to build more effective, timely and accurate business strategies. .

In May 2021, the Tea Research Institute of the Chinese Academy of Agricultural Sciences, in collaboration with several other institutions, jointly launched a product standard guideline for tea beverages, the first of its kind in the industry. The first batch mentioned in the standard covers milk teas, milk teas, fruit teas, bubble teas and chilled teas.

Independent economist Wang Chikun said the introduction of the standards, which signals the tightening of marketing regulations, shows that the industry has matured.

“Competition in the market is already fierce. As consumer demand grows, the number of businesses grows and the market approaches saturation. Therefore, to get the right break, companies need to focus on improving user experience and satisfying refined demand,” he said.

“In the future, afternoon tea will become a new standard for people’s more refined life, and Chinese afternoon tea culture will be popular around the world. And the rise of guochao and domestic products will be a good opportunity for local brands to grow rapidly,” the Ele.me and AliResearch report said.

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