Issue link: https://read.dmtmag.com/i/491368
72 STiR tea & coffee industry international By Si Chen C hinese tea companies are attracting frugal middle-class customers with "right size" pricing, value packaging, and innovative tea café concepts. Sales of consumer goods grew at 7.4% last year, less than half the rate of three years ago, signaling a cooling of China's $US185.3 billion consumer goods market. The slowdown forces both local and foreign brands to target the same middle-class customers, according to a Reuters news service report: "Increasingly, the domestic firms are winning: nearly two-thirds of foreign brands surveyed report lost market share in China, according to Bain & Company and Kantar World Panel." "The good domestic brands are able to play off the idea that they know how to develop something that a Chinese person is going to want," Reuters reported. Here are three trends demonstrating the resiliency and market prowess of Chinese tea retailers: Tea service innovations How to serve Chinese tea? There is a renaissance of tea ceremonies in China but tea service means different things to different people. Tea houses now compete with cof- fee and international giants like Starbucks, which enjoys worldwide fascination. West- ern influences are beginning to morph the tea-making style in China's tea bars. Chi- nese retailers, inspired by Teavana, now serve tea alongside displays of retail products. Yunitea, a tea bar in Kunming (Yunnan province), offers eye-catching beverages like 'Green Teapucino' and 'Caramel Black Teachiato'. Owner Wei Wen Bin, young and sharp and confident, describes his view of the changing market as he tamps 4 grams of CTC black tea before inserting the tea into a fancy Italian espresso maker. "Chinese tea has been cultural-laden for centuries, which has been heavy and out- dated for lots of young people," said Wei. "I want to offer an alternative solution for people who are warded off by the tea tradition. Coffee should by no means be the only choice for the modern lifestyle. If they are in a rush, they can just grab something and leave." What's more, "if you really need to perk up," Wei grinned, "I can make you a double tea shot. Wanna try?" Long term prospects are optimistic despite the fact that wholesale and retail prices for the most prized domestic teas have dropped at least a third due to government enforced frugality policies following an anti-corruption campaign dating to 2012. Tea companies that specialized in luxurious high-end gift sets find "the loss nightmarish" writes STiR Tea & Coffee correspondent Si Chen. China's Cleverly Evolving Tea Retail Tea retailing has a bright future in China according to the China Academy of Social Sciences which reported the domestic tea industry generated $80.6 billion in 2013 with $1 billion in exports Matcha station at 'Yutai Oriental' cafe in Qianmen, Beijing