Right Time for Tea
E-commerce boost to tea industry
What we are selling is more than a commodity, it is a culture. [While online tea sales are booming], physical stores are [still] good places for popularizing tea culture, through face-to-face teatasting and appreciation between businesses and customers.
Cai Banghong, online tea shop owner
The first thing Cai Banghong does every morning is to look at the sales figure of various tea brands on his online store, Hmongling Tea Garden, before posting promotional information and collecting customers’ feedback to help target his products. Cai spent two decades growing his tea company from a small backroom operation into a modern tea company integrating planting, processing and sales. As the chairman of Guizhou Duyun Maojian Tea Co., Cai also assists local farmers by running a cooperative tea plantation of about 16,000 mu (1,067 hectares). In the process he has raised the income of 448 farmers.
However, despite his success, Cai needed new challenges, which led to his online commercial venture. He wanted a wider consumer base for his tea brand and with the advent of social media and online trading, his dream came true in less than six months. Cai’s online store gained popularity quickly, and today his eponymous Cai Banghong black tea is his most popular tea product.
Brand building
Jing Linbo shared Cai’s dream to develop his own tea brand. Jing hails from Hetaoba Village in Meitan County, another major tea cultivation area in southwest China’s Guizhou Province, where 868 families throughout the county are involved in the tea planting and processing sector. The per-capita net income of local farmers reached 14,200 yuan ($2,157) in 2014, yet they were no longer content with making money simply by tea processing. Instead, they switched their attention to online trade. In 2015, the 30-something Jing, registered the trademark and started promoting local green tea on the Internet.
His fellow villager Liu Shengyan is busy recruiting skilled personnel in e-commerce in the hope of opening more online stores ahead of the spring tea-producing season. Currently, dozens of tea companies in the village have increased their online presence on Tmall and Jd.com, China’s online retail giants, seeing increase in sales year by year. Ubiquitous hi-speed Internet is promoting in-depth integration of information technology and traditional industries.
With its subtropical climate and clean air, Guizhou is ideal for growing high-quality tea. In recent years, the provincial government has vigorously supported the industry through attractive incentives. The tea industry three-year action plan in Guizhou, formally issued in 2014, gives pride of place to promoting brand building.
According to the plan, by 2016, Guizhou is expected to have a tea plantation area of more than 7 million mu (467,000 hectares) and set up more than 3,000 processing enterprises with an annual production capacity of 270,000 tons of tea. The tea industry’s consolidated revenue is expected to exceed 50 billion yuan ($7.6 billion).
The role of tea merchants in the online marketplace in achieving this goal should not be underestimated. Industry insiders projected that the revenue of the tea business online will reach more than 100 billion yuan ($15.1 billion) in five years from roughly 10 billion yuan ($1.5 billion) at the end of 2014.
Cai Banghong believes the industry needs to make full use of information technology to provide expert services along with the rapid growth of the online-to-offline business. He said an Internet community that is fair, open and transparent can make the consumer market much more transparent.
Apart from detailed photos and illustrations for tea products, Cai also displays each production process online, such as tea picking and processing. “How do you encourage customers to pay for the commodities like tea when they can’t taste it? So the more detailed information [included], the higher the confidence customers will have, which will make them believe your tea’s quality is guaranteed,” he told Chinafrica.
Precision marketing
The connection between the traditional tea industry, a visible and tangible entity, and e-commerce, an emerging and virtual information industry, sparked a fantastic “chemical reaction.”
Zhang Guanghui, Director of Luo Shi Ke Riverside Tea Farmers’ Cooperative in the city of Duyun, Guizhou, said that technology can allow consumers to see every link
in the chain of the tea industry, from tea planting and processing to sales. It plays a bigger role in tea marketing.
Zhang, along with more than 100 fellow farmers, not only established a standardized base for large-scale production, but also made use of the Internet, collecting after sales feedback to provide guidance for consumers through online communication - for example, how to brew tea and the best water temperature for each type of tea. The feedback became a guide for tea farmers to cultivate products more appealing to consumers.
Compared with other counterparts across the country, Guizhou’s tea e-commerce started late. The online retailers were few while facing great competitive pressure. Yet, Ma Wenbo, General Manager of Guizhou Qian Cha E-commerce Co., thinks differently. He viewed the combination of the traditional tea industry and Internet plus as a promising opportunity. “As the largest e-commerce platform for tea sales in Guizhou and leading tea businessto-consumer online shopping mall, we’re working actively to promote premium tea,” he said.
The company’s high-quality tea has the taste of success. Based on Internet data analysis, Ma adjusted the marketing strategy and took the initiative to start pre-sales ahead of the spring tea season so as to significantly improve efficiency. The company sold more than 1.2 million yuan ($180,000) online in March 2015. It is estimated that sales will be higher this year. In the first eight months of 2015, the tea export value of Guizhou totaled $15.67 million, an increase of 50.2 percent year on year. But even so, President of Tea Association of Qiannan Bouyei and Miao Ethnic Autonomous Prefecture in Guizhou, Liu Shijie, said it is important to increase brand awareness of Chinese tea and develop a growing international reputation.
Traditional tea expos, always the barometer of the tea industry and trade, have been taking cognizance of the Internet’s advantages. In May 2015, the China International Tea Cultural Festival and Tea Industry Exposition, held in Zunyi of Guizhou, made full use of the Internet to demonstrate tea fairs’ process and tea products, as well as promote exhibiting companies. Not only can customers know more about preferential policies quickly and efficiently through mobile apps and online stores, they are also able to directly order high-quality tea products online. It is part of Guizhou’s efforts to promote its tea while attracting more tea merchants.
Four months later, during the Guizhou Tea Industry Development Conference in Duyun, the Duyun Maojian Tea Commodity City officially opened, attracting the first batch of more than 200 tea enterprises. Meanwhile, in order to improve brand awareness, it opened its own online platform on Alibaba, a leading e-commerce platform in China. More than 40 tea-related enterprises have an online presence through the platform so far.
Chen Xiaoyun from one of the registered companies pointed out that compared with scattered individual shops, the requirement for registered stores on Alibaba Online Tea City is strict and demanding, requiring a series of certifications. In addition, it will implement spot checks for tea quality and safety.
The Internet can take Guizhou’s tea trade to another level, but traditional physical stores should be maintained and advertized by online shopping. That reflects Cai Banghong’s credo. “What we are selling is more than a commodity, it is a culture,” Cai told Chinafrica. “Physical stores are good places for popularizing tea culture, through faceto-face tea-tasting and appreciation between businesses and customers.”
yunan@chinafrica.cn