Table of Contents
Executive Summary
-
- The market
- Explosive sales value growth starts to cool down
-
- Figure 1: Sales value & annual growth rate of tea houses market from 2016-2019
- Figure 2: Average unit price per cup in RMB, China, 2013-2019
- Impact of COVID-19 on tea house industry
- COVID-19 leads to shutdown of some tea drinks consumption occasions
- Consumers’ uncertainty about economic outlook reduces purchasing power
-
- Figure 3: Impact from COVID-19 on consumers’ financial status, China, December to July
- Figure 4: Impact from COVID-19 on consumers’ economic outlook, China, April to July
-
- Figure 5: Short, medium and long term impact of COVID-19 on Tea House industry, August 2020
- Companies and brands
- Centralized market with five brands making up great proportion of value share
-
- Figure 6: Value share & volume share of the top brands, China, 2019
- Use sub-brands to attract new consumers with trading down products
- Rely on social media to engage consumers
- The consumer
- Most purchased brands are HEYTEA, alittle-tea and CoCo
-
- Figure 7: Purchased brands, March 2020
-
- Figure 8: Purchased brands – “HEYTEA & alittle-tea”, by age group, March 2020
-
- Figure 9: Purchased brands – “others”, by city tier, March 2020
- Desirable flavour and high accessibility matter the most
-
- Figure 10: Brand choice factors, March 2020
- More frequent tea drinkers go to offline channels
-
- Figure 11: Tea shops’ visiting frequency, March 2020
- Centralized tea base market, with fruit tea favoured by most
-
- Figure 12: Tea base choice, March 2020
- Passion fruit is a darling
-
- Figure 13: Fruit preference, March 2020
- Complementary combo of coconut jelly and oats most likely to please the market
-
- Figure 14: Ingredient perception, March 2020
- What we think
Issues and Insights
-
- Light mouth-feel with rich choice of fruits can better fit hot weather
- The facts
- The implications
-
- Figure 15: Mini-HEYTEA’s new launches of sparkling juices
- Develop ingredients that have mixed effects of flavour and texture
- The facts
- The implications
-
- Figure 16: The Alley’s milk tea with tapioca balls made of brown sugar
- Figure 17: Signature tea drinks from Chun Feng Tea House
- Tea houses to diversify revenue channels by marching into retail arenas
- The facts
- The implications
-
- Figure 18: HEYTEA and Nayuki’s flagship stores
- Figure 19: HEYTEA and Nayuki’s product display on Tmall
The Market – What You Need to Know
-
- Fast-growing market shows signs of slowing down
- Brands adapt to the new norm of “constant innovation”
- COVID-19 results in a loss of consumption occasions
Market Size
-
- Robust growth of sales value tamed in 2019
-
- Figure 20: Sales value & annual growth rate of tea houses market from 2016-2019
- Figure 21: Average unit price per cup in RMB, China, 2013-2019
Market Factors
-
- Investors’ consistent optimism in the market’s development
- Pressure of product innovation keeps mounting up
- COVID-19 wipes out a few consumption occasions for tea drinks
- COVID-19 arouses uncertainty for consumer expenditure & economic outlook
-
- Figure 22: Impact from COVID-19 on consumers’ financial status, China, December to July
- Figure 23: Impact from COVID-19 on consumers’ economic outlook, China, April to July
Key Players – What You Need to Know
-
- Leading brands’ dominance in sales value
- Eligible players to consider “subsidiary” strategy
- Up-to-date marketing tactics to enhance brand-consumer bonding
Market Share
-
- Five players contribute over half of the market sales value
-
- Figure 24: Value share & volume share of the top brands, China, 2019
Competitive Strategies
-
- Spin-off subsidiary offers price-tiered products, targeting various consumers
-
- Figure 25: Photos of the first Mini-HEYTEA shop in Shenzhen
- Figure 26: Menu comparison of HEYTEA (left) and Mini-HEYTEA (right)
- Cross-category business exploits purchase power, opening up another revenue channel
-
- Figure 27: Photos of Nayuki’s Bla Bla bar
- Figure 28: Bla Bla’s signature cocktails
- Cultivating high attachment to tea drinks among consumers
-
- Figure 29: Front page of Good Me’s official website
- Hidden menus to excite consumers’ curiosity purchase
Who’s Innovating?
-
- Product innovation: unstoppable flavour fusion of tea & alcohol hybrids
-
- Figure 30: Fresh milk tea with sweet fermented rice from Long Tine Tea Shop
- Figure 31: Osmanthus and sweet fermented rice tea drinks with taro balls from One More Time
- Marketing innovation: frequent feeds on social media to better engage with consumers
-
- Figure 32: Contents of HEYTEA’s WeChat feeds in 2018
- Figure 33: Content of HEYTEA’s WeChat feeds in 2020
- Packaging upgrades catering to multiple needs
-
- Figure 34: Bottled milk tea from Machi Machi
- Figure 35: Bottled milk tea from Xiexie Tea
- Brands taking the initiative in environmental protection
-
- Figure 36: HEYTEA’s environmentally-friendly products
The Consumer – What You Need to Know
-
- Concentration and divergence coexist in brand preference
- Diverse tastes contribute the most to luring consumers
- Divergent ingredient perceptions hint at potential business innovation
Purchased Brands
-
- Flourishing market led by a handful of big names
-
- Figure 37: Purchased brands, March 2020
- Brand preference of Post-00s and Post-90s diverges
-
- Figure 38: Purchased brands, by generation, March 2020
- One brand luring exceptionally more male consumers
-
- Figure 39: Purchased brands, by gender, March 2020
- First tier cities boasting higher brand diversity
-
- Figure 40: Purchased brands – “others”, by city tier, March 2020
-
- Figure 41: Purchased brands – “I haven’t purchased tea drinks from tea houses in the last six months”, by city tier, March 2020
Brand Choice Factors
-
- Consumers fall for abundant flavour options & easy shop access
-
- Figure 42: Brand choice factors, March 2020
- Parents value the application of fresh ingredients
-
- Figure 43: Brand choice factors – “using fresh ingredients (eg fresh fruit) in drinks”, by family structure, March 2020
- Premium brand consumers skewed towards rich flavour offerings
-
- Figure 44: Brand choice factors – “rich choice of drink flavours & convenient location”, by tea brands, March 2020
-
- Figure 45: Brand choice factors – “rich choice of drink flavours & convenient location”, by tea brands, March 2020
Tea Shops’ Visiting Frequency
-
- Offline shops see more frequent tea drinkers
-
- Figure 46: Tea shops’ visiting frequency, March 2020
-
- Figure 47: Tea shops’ visiting frequency – “once a day or more”, by gender and age, March 2020
- Figure 48: Tea shops’ visiting frequency – “2-3 times a month”, by family structure, March 2020
- Parents buy tea drinks frequently, those with more than one kid in particular
-
- Figure 49: Tea shops’ visiting frequency – “several times a week”, by family structure, March 2020
Tea Base Choice
-
- Burgeoning tea base market led by fruit tea
-
- Figure 50: Tea base choice, March 2020
-
- Figure 51: Tea base choice – “Pu’er tea”, by age, March 2020
- Floral tea garners general preference among females
-
- Figure 52: Tea base choice – “floral tea”, by gender and age, March 2020
- White tea lovers value internal brand choice factors
-
- Figure 53: Tea base choice – “white tea”, by brand choice factors, March 2020
Fruit Preference
-
- Nearly half of consumers add passion fruit to tea drinks
-
- Figure 54: Fruit preference, March 2020
-
- Figure 55: Fruit preference – “passion fruit”, by gender and age, March 2020
- Creative combos of tea base and fruit to stun the market
-
- Figure 56: Fruit preference – “apple & white peach & grape”, by tea base, March 2020
- Figure 57: Peach oolong tea and gin flavoured cocktail, China, 2020
-
- Figure 58: White peach oolong flavoured sandwich biscuits, China, 2020
- Figure 59: Peach and oolong cheese flavoured ice cream, China, 2020
- Locally-produced fruits win over regional consumers
-
- Figure 60: Fruit preference – “mango & white peach”, by region, March 2020
Ingredient Perception
-
- Fusion of coconut jelly and oats catering to all needs
-
- Figure 61: Ingredient perception, March 2020
- Purple rice, red bean and grass jelly each shine in two attributes
- Beloved cheese fails to stand out in any attribute
-
- Figure 62: Ingredient perception – “those think that cheese can enrich the flavour of drinks”, by gender and age, March 2020
Meet the Mintropolitans
-
- Concentrated brand preference among MinTs
-
- Figure 63: Purchased brands – “I haven’t purchased any tea drinks from tea houses in the last six months”, by consumer classification, March 2020
- Figure 64: Purchased brands, by consumer classification, March 2020
- MinTs are more stringent about products and experience
-
- Figure 65: Brand choice factors – “rich choice of drink flavours & using fresh ingredients (eg fresh fruit) in drinks & providing unique signature drinks & can customize flavour and ingredients & frequent update of products”, by consumer classification, March 2020
- Figure 66: Tea shops’ visiting frequency – “once a day or more & several times a week”, by consumer classification, March 2020
Appendix – Market Size
-
-
- Figure 67: Sales value & annual growth rate of tea houses market from 2016-2019
-
Appendix – Methodology and Abbreviations
-
- Methodology
- Abbreviations
Back to top