Current Chinese Tea Market

Current Chinese Tea Market
Life is about not knowing, having to change, taking the moment and making the best of it, without knowing what's going to happen next.
Gilda Radner
Growth does not have a perfect, predictable path.

The pandemic of 2020-2021 has created opportunities and challenges.  We have all had to reset expectations and make choices about new challenges.  No aspect of life or business has been left unscathed by political tumult and global changes.  The Chinese Tea Market—in fact, all tea markets have been affected.

2020 was the year of holding on, restrictions and figuring a path forward.  Populations in most countries were relatively homebound and, if there was travel, it was mostly domestic travel.  In many countries consumption of tea increased due to many factors related to pandemic.

In China specifically, with lockdowns, and restrictions involving international travel, domestic consumption of tea increased.  As domestic travel became available, many wealthy Chinese traveled to tea growing regions (many of these are located in or near beautiful scenic regions (Yellow Mountains, Zhangjiajie, Wuyi Mountains—each a World Heritage site, West Lake area of Hangzhou etc.).  Interest in premium teas grew and a “rediscovery” of the beauty of these teas buoyed the premium tea market.

The Chinese lower and medium end tea industry also benefitted from the pandemic intensity and reduced production in other tea growing regions in 2021 (think India and Africa).

China is the largest tea consuming country in the world.  Chinese tea drinkers consume about 40% of total tea production in the world.  As consumers in China achieve higher incomes, the Chinese market continues to search for premium teas. 

1. Data Source: Qianzhan, Tea market in China report by daxue consulting. The tea sales revenue in China

In 2021, this has translated into higher prices for teas all over the world.  The premium tea market is the most affected.  This is because the demand for high end source material, sold either directly or for use in a blend, exceeds the availability of this material.  In some cases, the increases are multiples of the original prices, particularly in aged teas (especially for White teas from Zhenghe, Fuding or Jianyang) or for low quantity teas such as genuine Wuyi Wulong teas.

If this were not enough, there has also been disruption in logistics due to pandemic, increase in costs of getting tea through customs and the FDA inspections, and increased consumption due to perceived health benefits of tea.   

What does this mean for consumers?  The Internet market for teas has long been a gamble for the buying public.  Trying to figure out whether a tea matches the advertisement for it or worse whether it is completely a different tea than what is being advertised is not easy. 

Buying direct from producers is for the most part not really an option for most individual buyers because in addition to provenance issues, there are issues of language, issues of safety and issues of competition from home markets.

Top end teas are fiercely sought after by Chinese tea aficionados, large Chinese companies that are either blending or selling direct and a more savvy Chinese public who realizes where the best teas are and how to directly access them.  For top end producers of recognized famous teas this has been a significant boon.  For purchasers outside of China this has meant the real competition for the best teas is not with tea shops or companies outside of China, but instead with the knowledgeable tea drinking population in China.

For consumers here, the best options, short of going to China and buying direct, is to find tea purveyors that do exactly that and who understand the pricing in China.   This provides consumers the best chance of getting the quality they are looking for.  There are currently few bargains in this market.  Focus on the quality and look for sellers who truly understand the challenges of this market.  

We discuss these and other important issues related to the tea market during the Virtual online Tea Sessions at Sophie's Cuppa Tea.  If you would like to upgrade your enjoyment of tea please sign up for our zoom tea workshops.

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