Profitable Transformation
Changes in tea industry boost farmers’ income in Songyang
On 7 September, just as the first rays of light reach Earth, Huang Faliang and his wife arrived at their tea plantation in Xuzheng Village of Songyang County, Lishui City, Zhejiang Province, to harvest fresh tea leaves. When they reached the market for tea leaves at Shang’an Village of the county at around 9 a.m. with their produce, it was already bustling.
In the market, over 5,000 people were busy with livestreaming tea products, trading of tea leaves and transportation. The Huang couple can earn around 500 yuan ($68.5) each day from selling their tea leaves in the market. According to Qian Yuanfeng, director of Songyang’s Centre for Tea Industry Development, the market is even more busy in the spring, with over 20,000 people visiting each day, when households like Huang’s can earn over 2,000 yuan ($273.9) each day.
Presently, Songyang boasts 153,200 mu (10,213.3 hectares) of eco-friendly tea plantations, producing 18,600 tonnes of tea valued at 2.049 billion yuan ($280.6 million) every year. Forty percent of the county’s population are involved in the tea industry, which accounts for 50 percent of farmers’ income and 60 percent of agricultural output in the county. The county has carved a new path of rural revitalisation through building a complete tea industry chain.
Tea business going online
In Luyunfeng, one of the many tea companies located in the county’s Xinxing Town, livestream hosts promote Songyang tea to a national audience. The orders are printed from a machine and workers in the warehouse pack and label the tea for distribution. According to Huang Jiefei, the company’s general manager, the sales revenue of the company reached 180 million yuan ($24.7 million) last year.
Songyang tea is a Chinese national geographical indication product. In the county the primary tea-producing region in Zhejiang, nearly all of the local farmers make their living from tea cultivation. Huang, whose father has been in the tea business, calls himself a second-generation tea practitioner. He returned to his hometown in 2009 after graduating from college
with a degree in marketing, with a dream to start a tea business. However, his return coincided with a saturated tea market, which, along with a lack of viable sales channels, made him realise how hard it was to succeed in the tea business.
In 2017, he got inspired by a friend who successfully ran a clothing business on an online platform. Huang decided to sell tea online. At that time, Pinduoduo, a group-buying shopping app, was on the rise. Its operating model allows users to initiate group orders, resulting in lower prices for the goods. Leveraging this model, Huang started selling Songyang tea nationwide. In 2018, his company’s revenue exceeded 20 million yuan ($2.7 million), reversing the previous poor performance in sales.
By 2019, China’s e-commerce market exceeded 6 trillion yuan ($821.8 billion). For Huang’s company, 70 percent of its annual revenue came from e-commerce platforms, marking a magnificent growth. In the same year, short video platforms and livestreaming sales gained rapid popularity across Chinese consumers. Once again, Huang keenly sensed a vast market linked through smartphones and opened accounts on short video platforms Douyin and Kuaishou. “We can sell 300,000 yuan ($41,087.7) worth of tea in just a few hours through livestreaming,” he said proudly.
Today in Songyang, data has become the new agricultural resource, livestreaming has become the new agricultural activity, and livestreaming hosts have become the new farmers. Currently, the county has nurtured over 1,500 online tea shops and more than 400 livestreaming e-commerce entities, providing employment for over 8,000 people. In 2022, the county processed 49.36 million online tea orders, generating sales of 4.25 billion yuan ($581.7 million).
Expanding industry chain
In Zentonghong, a tea company in Shiwuli Village, Gushi Town, Songyang County, its manager Tian Yijie and his team fully utilise low-grade tea, tea leave chips, and other by-products of the production of premium tea, as well as leaves from pruning tea plants. They produce tea powder and tea extracts from these materials. “These were once worthless, but now they sell for 10 yuan ($1.37) to 20 yuan ($2.74) per kg. This practice maximises the use of tea resources, increases tea garden output, and enhances the efficiency of the tea industry. This annually adds over 30 million yuan ($4.1 million) to the income of the county’s tea farmers,” Tian said, adding that this business that “turns waste into treasure” has received strong support from experts at the Chinese Academy of Agricultural Sciences and other research institutions.
In response to labour shortage in the industry, the county government, in collaboration with Zhejiang Sci-Tech University, the Tea Research Institute of the
1,500
Number of online tea shops in Songyang County
Number of livestreaming e-commerce entities in Songyang County
Online tea orders processed in Songyang County in 2022
400 49.36 MILLION
Chinese Academy of Agricultural Sciences and other organisations, has developed an intelligent tea picking machine. It is currently in the testing phase and is expected to significantly improve tea picking efficiency while reducing costs.
Boosting income with carbon sink
In March 2023, at the opening ceremony of the China Tea Trading Fair, Xiexikeng Village Cooperative in the town of Xinxing entered into a carbon sink deal with a Beijing-based company, involving the trading of 500 tonnes of carbon sink. This marked Songyang’s firstever carbon sink deal that involves its tea gardens. Songyang has been actively exploring a mechanism to gain economic benefits from its ecological resources as the country strives to meet its carbon peaking and carbon neutrality goals. The county has signed a framework agreement with the Research Centre for Rural Economy (RCRE) of the Ministry of Agriculture and Rural Affairs to develop low-carbon tea gardens, creating new ways for increasing tea farmers’ income and wealth.
According to Qian, starting with the construction of low-carbon tea gardens, the county has implemented a programme aimed at reducing the use of pesticide and fertiliser. It emphasises reduced use of chemicals, application of organic fertilisers, and enhancement of soil organic matter in tea planting as means for emission reduction and carbon sequestration. The county also aims to establish a complex ecological system in tea gardens, where tea plants and the forest coexist. These have benefitted tea farmers, who can sell high-quality tea produced through low-carbon methods for higher-than-average market prices.
In the future, Qian said, the county will collaborate with the RCRE to conduct in-depth research on tea garden carbon assets, carbon credits, and distribution of revenue from carbon reduction, and promote the green transformation of agriculture through eco-friendly and low-carbon approaches. In doing so, it aims to build itself into a model for high-quality tea industry development and shared prosperity among tea farmers.