Young consumers’ growing interest in tea drinks

Liu Lijia takes a break from her computer screen in Beijing and places two orders on her mobile phone, one for herself and another for a friend in the southern city of Guangzhou some 2,200 kilometers away.

Before long, brick-and-mortar chain stores in the two cities have the orders delivered — two tea drinks blended with fruits and cheese. Taking sips of the tea-based beverages, the pair post snapshots on social media to show their visual “tea party”.

“Although we are apart from each other, we can share the same afternoon tea,” says Liu.

In recent years, China has seen a boom in “new tea beverages” that combine brewed tea, fresh fruits and vegetables, sometimes laced with dairy products or juice, which are particularly sought-after among young people like Liu.

With natural ingredients, fancy designs and digital services, such drinks cater to the spending habits and aesthetics of young consumers, a group that seeks novelty and has relatively strong buying power. Observers believe it reflects a new consumer market.

A statistical report by the China Chain Store & Franchise Association shows that there were about 378,000 chain stores selling teabased drinks across the country by the end of 2020, not only in metropolises like Beijing and Guangzhou, but also in second- and third-tier cities.

In June, Heytea, a popular beverage chain headquartered in Guangdong, launched a new product that was inspired by and named after A Dream of Splendor, a smash hit TV drama. The drink flew off the shelves and set a record sales volume of 300,000 cups nationwide in a single day.

As lightweight commodities, new tea drinks help meet young people’s desire for relaxation and social sharing, and have even become a vehicle for social life, according to a manager of Heytea.

Now, when a new flavor of drink is launched, hordes of young people line up in front of beverage retailers or flock to online takeaway platforms looking forward to a freshly made cup and then cannot wait to post it on social media, just like Liu and her friend did.

“People say that a cup of tea beverage a day keeps tiredness away, and I do agree with that,” Liu says.

According to data from iiMedia Research, the market scale of China’s tea-based drinks exceeded 279 billion yuan ($39 billion) in 2021 and is estimated to reach about 375 billion yuan by 2025.

The CCFA attributed the boom of the beverage industry to a consumption upgrade. Statistics show that China has a middle-income group of more than 400 million and the size is expected to continue expanding.

“Previous popular beverages like milk tea used to be brewed with tea powder and creamer. With higher living standards, customers are now demanding higher-quality food and drinks,” says Wang Jingyuan, founder of Linlee, a brand that focuses on novel tea-based lemon drink.

Tapping into the huge market, tea-based beverage chains have responded to the demand for lowsugar diets, using health-oriented ingredients such as natural sweeteners in place of syrup, an artificial sugar substitute that was commonly used in the past. Meanwhile, peripheral products have also been put onto the shelves to enrich the consumption experience.

According to Sun Gonghe, an official with the CCFA, the fashion for tea-based beverages has reignited people’s interest in tea-drinking generally and helped drive home Chinese tea culture among young people.

A recent report on tea beverages predicts that by 2025, the total scale of the tea beverage industry around the world will reach $318.5 billion.

While more and more China’s teabased beverage chains are eyeing overseas market, experts have cautioned against potential problems with food safety and industrial standards.

In May 2021, a specific product standard special for drinks made with tea was released, the first of its kind in China, in an effort to promote the long-term development of the industry.

Previous popular beverages like milk tea used to be brewed with tea powder and creamer. With higher living standards, customers are now demanding higherquality food and drinks.”

Wang Jingyuan, Linlee’s founder