Tai­wan’s glo­ri­ous Oo­long tea mer­chants aim for main­land

China Daily (Hong Kong) - - BUSINESS - By CHINA DAILY

Around 200 years ago, Hsu Chien-fu’s an­ces­tors from Hs­inchu i n north­west Tai­wan were among the first to plant tea in the is­land’s fer­tile soil.

Now the fam­ily busi­ness sells tea to most of Tai­wan and half of the main­land. Hsu re­cently par­tic­i­pated in a trade fair in Bei­jing, hop­ing to in­crease main­land sales.

The three-day trade fair at Bei­jing Ex­hi­bi­tion Cen­ter, fea­tur­ing agri­cul­tural prod­ucts from eight coun­ties in Tai­wan, be­gan on Dec 24 and was backed by the cen­tral govern­ment aim­ing to heat up cross-Straits trade and tourism. Tai­wan’s tea mer­chants com­prised half of the 130 ex­hibitors. They hope to ex­pand rev­enues by se­cur­ing more sales chan­nels on the main­land, in­clud­ing e-com­merce, while their lo­cal sales have been hit by slow­ing eco­nomic growth and a falloff of main­land tourists.

Tai­wan is fa­mous for Oo­long, a type of fer­mented tea. White Tip Oo­long, bet­ter known as Ori­en­tal Beauty, is a spe­cialty from Hs­inchu. Hsu sold it at 380 yuan ($55) for 150 grams at the fair.

The Hsu fam­ily man­ages the Emei Tea brand, and has been sell­ing to main­land for nine years. Its main­land busi­ness peaked be­tween 2011 and 2014, with an­nual main­land sales tak­ing up 30 per­cent to 40 per­cent of their to­tal rev­enue.

They gained rep­u­ta­tion af­ter win­ning the ti­tle of “King of Tea” in the Cross-Straits Tea Cham­pi­onship in 2011, but the sales boom was more likely boosted con­sid­er­ably by a gen­eral spike in trade af­ter the sign­ing of the Eco­nomic Co­op­er­a­tion Frame­work Agree­ment in 2010.

ECFA was the main­land’s move to fa­cil­i­tate cross-Straits trade.

“We used to rely on the Mini Three Links, but tea sold this way reached more lim­ited num­bers of con­sumers,” said Hsu. “With the ECFA, we sell to more peo­ple in more places.”

How­ever, the slow growth of main­land econ­omy struck the tea busi­ness this year. Hsu’s an­nual main­land sales dropped to 15 per­cent of their to­tal rev­enue.

The sharp fall in main­land visi­tors to Tai­wan ex­ac­er­bated the sit­u­a­tion, said Lau Chin-yi, head of a Tai­wan-based tea product as­so­ci­a­tion.

“Many visi­tors bought tea in Tai­wan and car­ried it home be­fore. Now tea stores are empty of trav­el­ers,” he ex­plained. “This is a hard blow.”

Tai­wan’s data shows the main­land was the big­gest im­porter of Tai­wan’s tea in re­cent years. An­nual tea sales to the main­land in 2015 in­creased 60 per­cent to $24 mil­lion. Though the mo­men­tum in growth slowed sig­nif­i­cantly in 2016, sales still ex­ceeded last year’s by $1 mil­lion.

There is still room to grow: Tai­wan Oo­long only claims 11.4 per­cent mar­ket share of the main­land Oo­long con­sump­tion, ac­cord­ing to China Tea Mar­ket­ing As­so­ci­a­tion.

“The mar­ket is almost sat­u­rated in Tai­wan, but huge in the main­land,” said Tai­wan tea mer­chant Lin Yao-jing at the trade fair.

“Luck­ily, our tea is hand­made and more del­i­cate in pro­duc­tion, or else we could never com­pete in the main­land mar­ket.”

His next move is to seek deals with main­land e-com­merce com­pa­nies.

Sell­ing tea on­line has been gain­ing pop­u­lar­ity i n t he main­land. Chi­nese e-com­merce gi­ant Alibaba re­ported that an­nual tea sales on its shop­ping plat­forms rose 27.5 per­cent to reach 8.8 bil­lion yuan in 2015. More than 20 mil­lion peo­ple viewed tea prod­ucts dur­ing the Sin­gles Day shop­ping fes­ti­val, almost dou­bling the num­ber of 2014.

The Hsu fa mily be­gan co­op­er­at­ing with a main­land teashop on Taobao.com last year, but a monthly sale of 20,000 yuan is a tiny piece of its to­tal rev­enue. Hsu also runs an on­line shop in Tai­wan with top cus­tomer rat­ings.

“Tai­wan res­i­dents usu­ally buy some tea on­line to test the qual­ity, and come to shops to buy more if they like it, but main­land res­i­dents might be dif­fer­ent,” Hsu said.

Sun Hong, deputy gen­eral man­ager of a Bei­jing e-com­merce plat­form Ben­lai.com, said that Tai­wan tea could find its way in the main­land mar­ket as long as both sides form a sus­tain­able sup­ply chain and cater to the needs of main­land cus­tomers.

For Hsu, forg­ing links with more tea deal­ers through trade fairs is a pri­or­ity, while sell­ing more on­line is a plus. Yet he en­vi­sions open­ing stores in Bei­jing in the long term.

“Tai­wan is re­ally small in size. Bei­jing almost equals Tai­wan in pop­u­la­tion,” he said “But first, we need to make our brand known among main­land cus­tomers.”

The mar­ket is almost sat­u­rated in Tai­wan, but huge in the main­land.” Lin Yao-jing, Tai­wan tea mer­chant

HeFe­icon­tribut­ed­tothis story.

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