How can the tea industry break the billion-yuan curse?
A super-populous country of 1.3 billion people generates enormous purchasing power every day. Backed by such a large market with natural advantages, mass daily consumer goods have vast fertile ground for growth and development. Whether it is oil, salt, soy sauce and vinegar, or industries such as tobacco and liquor, they have all given rise to major brands worth hundreds or even over a thousand billion. By comparison, tea, which like tobacco and liquor is also a rigid-demand product, has a long history and a huge consumer base, yet not a single one of the largest tea enterprises has annual sales exceeding 2 billion, and most tea enterprises are “small, weak, scattered and fragmented”, making this an odd phenomenon in a rigid-demand industry.
This odd phenomenon has long existed in the tea industry. Breaking through the “one billion” sales mark seems like a curse, becoming the pain of tea enterprises' development. Why is it that Britain, which does not produce a single tea leaf, can give rise to a multinational giant like Lipton with annual sales exceeding 30 billion, while Chinese tea enterprises still cannot escape the “one billion curse”? Ultimately, the tea industry has long been trapped by three major problems, making it difficult to cultivate influential well-known brands.
The standards dilemma, hard to systematize
Being trapped by standards is the first major problem hindering the development of the tea industry. The standards dilemma concerning the tea industry is mainly reflected at several levels: no standards for products, no standards for prices.
Chinese tea has a long history and a great variety of categories, such as “West Lake Longjing, Dongting Biluochun, Anxi Tieguanyin, Huangshan Maofeng” and so on. Adding up the well-known and little-known tea categories, there are more than a thousand, but they are merely well-known tea types representing regions, and have never been well-known brands. Compared with the famous cigarette “Chunghwa” and the famous liquor “Moutai”, when consumers choose tea, there is not a single trustworthy Chinese tea brand.
The current situation of no product standards leaves consumers completely confused when buying. What exactly counts as good tea? One has to examine the tea's raw materials, place of origin, color, aroma, and even picking time. For consumers who are “laymen”, these factors are inevitably too professional. Bringing a “tea connoisseur” along when buying tea reflects the lack of standards for products in the tea industry.
At the same time, because there are no product standards, there are no price standards, which makes the tea industry even more chaotic and disorderly. Take Pu'er tea as an example: from as low as a few dozen or a few hundred yuan, to as high as several thousand or even tens of thousands of yuan. For consumers, what exactly is the difference between these Pu'er teas at different prices? Where does the price positioning come from? The mixed and chaotic prices cause many consumers to shrink back when buying.
No product standards directly lead to consumers' lack of trust in products and brands. Without trust, how can there be scale?
The positioning dilemma, hard to produce major brands
To achieve a successful brand, one must first have a clear positioning for the brand. For example, the positioning of target consumers, the positioning of price, the positioning of product characteristics, and so on. But for a long time, most Chinese tea enterprises have not had much awareness in this regard, and the tea industry is basically still dominated by selling loose tea. Of course, more and more enterprises have begun to cultivate their own brands, but most brands either have unclear positioning or crude positioning. To solve the positioning problem, tea enterprises need to address issues at three levels.
First, the positioning of the target group. Is the brand's target group high-end consumers, the middle class, or mass consumers? What is their core demand? What is the core benefit the brand should give them? Second, the positioning of tea products. Is it organic tea or famous-mountain ancient-tree tea? Is it tea bags or whole-leaf tea? Is it mass tea, business tea, or other more innovative products, and so on and so forth? Tea enterprises must focus on one item for focused development and form their own unique and competitive products, so as to achieve differentiation among many brands and gain core competitiveness. Third, the positioning of tea categories. Is it to focus on one category, making it refined and strong, such as Zhuyeqing, or Zhengshantang's Jin Junmei? Or is it to start from being based on all categories of tea, such as Xiaoguancha, positioned as a high-end tea brand across all categories.
Only with precise positioning is it possible to develop products that truly meet the target consumers, truly satisfy the needs of target consumers, and make it possible to build a brand that consumers trust and love.
The culture dilemma, clinging to the old ways
The broad and profound “tea culture” has both nourished the entire tea industry and, to some extent, trapped it. At present, in order to complete their self-image packaging, almost all tea brands without exception treat “tea culture” as a sales driver, mistakenly binding tea history, tea craftsmanship, tea stories, and even some performance and skill-related elements into a modern annotation of “tea culture”, giving tea culture a flavor of being high and mighty or pretentiously refined. But this can only artificially create a barrier between consumers and brands.
A culture with vitality must change with the changes of the times and cannot cling to the old ways. An influential tea brand must, based on the matrix of traditional tea culture, shape its own unique brand culture, rather than merely following what others say.
Standards, positioning and culture have become the three major dilemmas hindering the development of the tea industry, leaving China's tea industry in an awkward and helpless position for a long time. Not only has it failed to give birth to influential brands domestically like tobacco and liquor, let alone go abroad and compete with international brands. Fortunately, some tea brands have already realized the current situation of the tea industry and proposed their own solutions to various dilemmas.
Take Xiaoguancha, which was newly launched in October this year, as an example: “6 major tea categories, 8 famous teas”, with only one product for each famous tea, all products with unified grade and unified price. Through relatively standardized products, consumers can choose products more simply. Xiaoguancha's 8 famous teas strictly limit the quality of raw materials, cooperate with eight national treasure-level tea-making masters in China, limit craftsmanship standards, and use original aluminum small-can packaging to limit packaging standards, giving the 8 famous teas relatively simple and intuitive selection standards.
Through the establishment of standards, good tea becomes simple and transparent. In this process, Xiaoguancha also completed its brand positioning: focusing on providing high-quality good tea for high-taste groups and creating a high-quality life.
With high-end consumers at its core, Xiaoguancha's brand positioning as a “high-end tea brand across all categories” truly focuses it on target customers and provides insight into consumers' true needs: tea is not only a necessary consumer product in life, but also a way to taste a beautiful life experience; tea is not only a healthy and natural beverage, but also an elegant social method for high-end groups on occasions such as work, life and business. Xiaoguancha is not only a high-end tea brand, but also a high-taste lifestyle.
Sixty years built Chunghwa cigarettes, a hundred years built Moutai liquor. It is believed that in the near future, with the rise of brand awareness among Chinese tea enterprises and the general trend of upgrading national consumer demand, the tea industry will certainly see super brands exceeding one billion and exceeding ten billion, leading Chinese tea to once again go global.