The Inspiration of Lipton's Success: How Can China's Tea Industry Break Through

Chinese people have a history of drinking tea that spans a thousand years. To this day, the domestic tea market is worth 300 billion yuan, yet on the domestic A-share market, there is not a single listed company. There is even a saying in the industry that China's 70,000 tea companies cannot match one Lipton.

Why is it so difficult for Chinese tea companies to go public? In the final analysis, it still comes down to the problems of standardization, scale and branding. So in the future, how can our Chinese tea break through these difficulties and win the market? In today's Agricultural Economics Ramblings, we have invited Sun Liwu, a special commentator for China National Radio's "Voice of the Countryside," to talk about this topic.

Sun Liwu: China has a rich tea culture atmosphere. A cup of clear tea refreshes the heart and mind, enough to let people leave behind the bustle and feel the rich atmosphere of the times embodied in tea culture. But in recent years, the originally pure local flavor of tea culture has taken on a touch of foreign fragrance.

China is both the country with the longest tea culture history and the largest tea-drinking population, and also the world's largest tea producer. If these "world's best" titles already make you feel deeply proud, then when you hear that the world's largest tea brand does not come from China, the psychological gap is truly more than just a little bit.

The world's largest tea brand comes from Lipton, owned by Unilever, the world's second-largest consumer goods company. You heard that right: a small Lipton black tea bag sells for 1 billion euros globally every year. And after entering China for five years, it achieved first place in tea bag sales and first place in market share in a series of surveys of 100 shopping malls in China. Lipton, marketed in 110 countries and regions around the world, is the world's largest tea brand whether measured by brand awareness or sales volume of tea products, and is also the third-largest non-alcoholic beverage most chosen by consumers worldwide, after Coca-Cola and Pepsi-Cola.

Does this sharpness make China's tea industry, sheltered by a strong halo of era culture, pale by comparison? "Stones from other hills may serve to polish jade." Lipton black tea and green tea seem to spread the fragrance of tea more widely than the West Lake Longjing, Dongting Biluochun and others that we so readily speak of.

By contrast, China's local tea industry is the world's largest tea producer, and its tea garden area has maintained a steady growth momentum, yet among them there are pitifully few branded enterprises. The mainland A-share market still has no tea company to this day. Even counting tea companies already listed on the New Third Board, the number of listed tea companies still does not exceed 10, and their scale remains limited. The biggest problem in making scale hard to achieve is the low degree of standardization in the domestic tea company industry. The sluggish economic environment has intensified the reality of low profitability among tea companies, and their thinking is also too traditional, making scale-up too difficult. Of course, it is not exactly "the road to Shu is hard, harder than climbing to the blue sky."

Looking at Lipton tea's global success, one important reason is precisely that it is guaranteed by three major standards: a fixed and unified standard for tea bag flavor, globally unified testing standards involving food safety, and sustainable, traceable standards. These are all things the domestic tea industry needs to learn from. Of course, the establishment of standardization requires even more support and guidance from relevant departments.

For the establishment of local tea branding, traditional sales models need even more to be effectively combined with internet thinking, which will be more conducive to the process of tea branding. Even for high-end brands that were previously high and mighty, improving sales channels and returning prices to normal will also bring advantages. But it cannot be denied that the current adjustment of the domestic tea industry still has a long way to go. The mature use of new marketing models, the true construction of branding, and the improvement of sustainable standards all require dedicated effort.

Chinese tea culture needs the rich fragrance of globalization, and even more needs local tea fragrance to fill the garden.