A Preliminary Study of Tea Merchants' New Ecological Marketing: The General Public Becomes the Main Consumer

“At present, the most urgent task for professional tea markets and tea merchants is to reconstruct marketing channels and return tea to its original place as an everyday item for ordinary people. In addition, the issues of branding and standardization in the tea industry also need to be resolved.” Before National Day, facing a tea market that was still at a low point, Xu Qiuxin, general manager of Jinan Ruichi Qilu Tea City, had a great deal to say.

With the establishment of the long-term mechanism for the central government's “eight-point regulations,” the tea marketing model based mainly on public-fund group purchases by government organs, public institutions and enterprises, collective welfare distribution and gift-giving has reached a dead end, replaced by a new marketing model based mainly on online sales and experiential marketing.

The General Public Becomes the Main Consumer

⟦NL> With the introduction and implementation of the central government's “eight-point regulations” at the end of 2012, demand for the government's “three public” expenditures and corporate gift consumption dropped sharply, and the domestic tea market entered a period of adjustment.

⟦NL> Ms. Cao, general manager of Lvran Trading, which operates both liquor and tea at Qilipu Tea City in Jinan, said that since the implementation of the “eight-point regulations,” consumption of high-end liquor and tea has been greatly affected, with sales falling by more than 30%. On the one hand, in response to market changes, various brands promptly adjusted the prices of high-end, high-priced gift tea, official tea and business tea, making prices more rational; on the other hand, demand in the ordinary mass consumer market rose rather than fell, and product prices rose slightly while remaining stable, with products priced at 100—500 yuan per jin becoming the mainstream of market consumption. In terms of product categories, in the past two years the market has changed from the previous “green fat and red thin” pattern to a mixed battle among “red, green, black and white,” with black tea continuously heating up and dark tea and white tea becoming increasingly popular.

⟦NL> At Ruichi Qilu Tea City on Zhangzhuang Road in Jinan, a Mr. Zhang who was buying black tea told the Economic Herald reporter, “There are far fewer drinking occasions now. I drink tea after every meal, and my health is much better than when I drank alcohol every day.” He said that in the past many people gave him tea, so he basically did not buy tea himself, but this year no one gave him any, so he came to buy it himself.

⟦NL> Tea Merchants “Go Online” to Transform

⟦NL> In 2013, the Dayi brand's sales on Tmall approached 100 million yuan, ranking first among traditional tea enterprises in internet sales. At present, Taobao, Tmall, JD.com, Dangdang, Yihaodian and others have successively become internet platforms that tea merchants have entered. With the launch of WeChat malls, traditional tea merchants, especially low-end tea dealers, are once again facing opportunities.

⟦NL> Ms. Cao said that she had also wanted to open an online shop, but considering the extremely fierce competition on Taobao and her own lack of operational experience, she ultimately chose to give up and has now begun to work on a WeChat shop. In response, Zhang Yang, a well-known domestic expert in tea brand operations, said at the recently held “Qilu Tea Merchants Summit Forum” that three to five years ago, Taobao was an era of rival warlords, and opening a shop then was roughly enough to make money. But now, there are already more than 50,000 tea shops on Taobao, and obscure small-brand shops are easily drowned out. To ensure a high search ranking, spending tens of thousands of yuan a month is no small sum. “In this situation, I do not recommend using Taobao. It would be better to move the Taobao shop to a WeChat shop. In the future, more than 50% of tea-buying behavior will be completed through mobile phones. The WeChat shop backend currently charges no fees, and the program design is very cheap. Turn yourself into an official account, and a small IT company can set it up for just a few thousand yuan.”

⟦NL> Zhang Yang also said that although e-commerce is developing rapidly now, no matter what stage e-commerce reaches, physical stores will not die out, because tea marketing is a very complex system and it is impossible to rely entirely on e-commerce to complete it. “Things with vintage, high value and that go into the mouth all need to be selected in a store.” He said, “From the perspective of traditional industries, there is no need to worry about the demise of physical stores for at least 15 years, but online shops and WeChat shops definitely need to be opened. This shows the difference between two different purchasing behaviors and purchasing needs. If there are only physical stores and no online shops, part of the sales opportunities will be lost.”

⟦NL> According to industry insiders, today, with tea online shops experiencing a “blowout,” in order to remove consumers' concerns that tea online shops are “invisible and untouchable,” the OTO e-commerce model of online transactions and offline experiences has emerged, and it is relatively popular in the product marketing of branded tea merchants. Especially in the offline experience segment, shopping-mall-style tea cities that focus on tea culture experiences will play important functions such as on-site tea tasting, tea play and socializing, thereby driving offline tea sales.

⟦NL> Tea Culture Experiential Operation

⟦NL> At present, affordably priced, high-quality branded products have become the public's first choice. Ms. Cao also said that tea merchants are paying increasing attention to brands and have successively registered trademarks and brands, striving to embark on the path of brand-based development.

⟦NL> At several large tea wholesale markets on Zhangzhuang Road in Jinan, the reporter found during visits that although tea merchants generally have brand awareness, the hardware facilities of the major tea markets have not kept up with the trend of the mass consumer market, and the vast majority are still market-style hardware configurations. “Market management is loose, parking is difficult, the functional layout is chaotic, and illegal parking is especially serious in normal times. Especially on rainy days, cargo vehicles simply cannot get out, which is particularly inconvenient.” Mr. Fan, who operates green tea at a tea city on Zhangzhuang Road, feels this deeply.

⟦NL> Industry insiders believe that for tea merchants to develop brands, they must rely on an operating environment with tea culture experiences. For example, the experiential, shopping-mall-style tea operating environment of “Beijing Maliandao” is the most favored.

⟦NL> At the same time, in the great tide of China's industrial upgrading, the tea industry's shift from a wholesale-market model to a shopping-mall experience model will be an inevitability of industry transformation, and also a good remedy for filling market gaps and enhancing tea merchants' brands. Xu Qiuxin said, “In this tea industry upgrade, shopping-mall-style stores with tea culture and experiential features will be the mainstream consumption venues for mass consumption. In our product design, we focus on creating public spaces for tea culture experiences needed by mass consumer groups while shopping, combining tea-themed business formats with tea culture derivatives, and adding atriums, dining, tea culture experience halls, tea culture leisure platforms, business office support and so on; in meeting the needs of tea merchants, we add central air conditioning, parking lots, large-scale warehousing and logistics and other hardware support, truly catering to the one-stop consumption experience of the general public and creating a secure and reassuring operating environment for tea merchants. While creating a tea culture atmosphere, we will build a tea culture-themed shopping platform integrating tea tasting, tea play, socializing, experience and other functions.” From this, it can be seen that the emergence of tea culture experiential shopping-mall-style tea cities will play a decisive role in the industrial upgrading of the tea market, the enhancement of tea merchants' brands and the prosperity of the tea industry.

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