The business model transformation from traditional tea industry to modern tea beverages businesses – make Fujian tea industry as a representative

Tea is the largest category of beverage consumption in China, and the per capita consumption of tea continues to grow. Based on China’s long-standing tea culture as well as the large and young tea consumption groups, new tea beverages will become the representative of business model transformation of Chinese traditional tea industry and Chinese traditional tea culture.

The new tea beverages refers to a drink made of high-quality tea as the base, supplemented by the concentrated liquid extracted by different extraction methods as raw materials, added with fresh milk, cream or a variety of fresh fruits, which quickly obtained the market recognition of the 90’s and 00’s. Under the trend of consumption upgrading, it provides the market foundation for the new tea beverages, and the modern new tea ushers in the 3.0 era. The new tea beverages began to grow rapidly since 2016, becoming the largest segment of the tea industry. At present, the market penetration of new tea still has a large space for development. In 2020, the number of new tea beverages consumers will exceed 340 million, and the market scale will be 410.7 billion RMB. The difference between new tea beverages and traditional tea industry comes from the innovation and upgrading of five aspects: new products, new tastes, new crafts, new forms of presentation and social attributes. The top market participants, represented by the tea of Heycha and Naiyuki’s tea, are actively deploying various markets, triggering a new wave of younger tea consumption.

The high quality of raw materials is the foundation of new tea brands. The productism of the new tea beverages is the nature of the tea drinking, which originates from the pursuit of the ultimate of raw materials. Now, new tea beverages in Fujian are sparing no efforts to build up the upstream tea supply chain, which is an opportunity for the transformation and long-term developing of Fujian’s traditional tea industry. This research will focus on the transformation and upgrading of traditional tea industry in Fujian Province, hoping to put forward some suggestions for the future development of digital transformation and upgrading of tea industry in Fujian Province.

Tangxi Chen

A Research Fellow in Rural Development and Revitalization