Wangfu Tea House, Chaoyang Park branch, Beijing.
On June 30, the second session of the tea industry forum series “Adapting to Change, Opening New Prospects, Promoting High-Quality Development,” hosted by China Co-op Times · Tea Weekly All-Media, was held online and livestreamed through the Tea Weekly video channel. Themed “The Breakthrough Path for Tea Spaces (Teahouses) Under the Pandemic,” the forum invited Wang Xiaofang, chairwoman of Beijing Wangfu Tea House; Zhang Haiyang, chairman of Shaanxi Xi’an Shui Zhong Tian “Tea + Food”; Wu Xiang, founder and CEO of 6 Tea Shared Tea Room in Fuzhou, Fujian; and Huang Hongmei, operations director, and Zhao Lüdi, deputy general manager, of Waku Culture Communication Co., Ltd., to give keynote shares. More than 1,000 tea space and teahouse operators and tea culture enthusiasts from across the country watched the livestream. The forum also invited Deng Zengyong, a veteran tea industry observer and doctor of management, to comment on each teahouse’s presentation.
Since 2000, China’s teahouse industry has entered a stage of rapid development. According to incomplete statistics, at the peak of development there were at least 100,000 tea-centered spaces and teahouses nationwide. But since the outbreak of the COVID-19 pandemic in 2020, the teahouse industry — built primarily on providing space services — has suffered heavily: some teahouses chose to close, some explored new business formats, and some worked to raise their management standards. During this period, a number of teahouses have emerged that withstood the test, found ways to survive, and even grew their business against the trend under the pandemic. Their hands-on experience will bring inspiration to the tea space (teahouse) industry.
Wangfu Tea House: Private-Domain Traffic Brings Members to Life
In 2005, the first Beijing Wangfu Tea House opened. Today, Wangfu Tea House has 3 chain stores and 4,000 members, nearly half of whom live outside Beijing. Since the pandemic, travel restrictions have significantly reduced members’ visits to the store. How could members be reactivated and interaction with them strengthened? Through modern technological means, Wangfu Tea House converted 1,200 members into private-domain users, forming private-domain traffic and laying a solid foundation for service marketing. According to Wang Xiaofang, private-domain traffic has brought Wangfu Tea House three direct benefits in serving its customers: first, it built trust with customers and increased customer stickiness; second, it allows the house to listen to customers’ service needs at any time and improve service quality; third, it greatly raised the repurchase rate of its products.
Besides serving tea drinks, Wangfu Tea House also sells tea leaves and a full tea banquet. After the private-domain traffic took shape, Wangfu Tea House’s tea repurchase rate rose by 32%. At the same time, the private-domain traffic also spurred communication among members, greatly enhancing Wangfu Tea House’s reputation and transaction volume. In March 2022, Wangfu Tea House launched its full tea banquet, in which every dish, every drink, and every staple contains tea — each with a tea story to tell. From May to June 6 this year, when dine-in service was suspended across Beijing’s catering industry, Wangfu Tea House responded with a delivery tea banquet service brought to customers’ doors. In just 1 month and 5 days, sales of the tea banquet equaled the whole of 2021’s annual sales — thanks mainly to the benefits brought by private-domain traffic.
Wangfu Tea House invites Yang Jianping, a member of the National Committee of the CPPCC, to teach its staff “Learning Management from Dream of the Red Chamber.”
As a teahouse that has survived in Beijing for 17 years, Wangfu Tea House has earned its reputation in the national teahouse community through “service” and a “family culture.” In response to normalized pandemic prevention and control, Wangfu Tea House will in the future adopt a “one body, two wings” sales model — with offline teahouse experiential sales as the “main body,” and the accumulation of private-domain traffic and the building of private-domain spaces as the “two wings” — to drive the teahouse’s development.
Shui Zhong Tian Tea House: Surviving Through Product Innovation
Shaanxi’s Shui Zhong Tian Tea House has two stores, one in Weinan, Shaanxi Province, and one in the High-Tech Zone of Xi’an, opened in 2010 and 2017 respectively. The Xi’an store covers more than 2,000 square meters, and with high rent, sustaining the business on tea drinks and tea sales alone is difficult. Tea holds no natural attraction for young people — but good food does. So Shui Zhong Tian developed a hit single dish: suancaiyu (pickled-cabbage fish). For 128 yuan, customers could order a superb suancaiyu, and every day long queues of customers came for it, putting Shui Zhong Tian’s service quality to the test. To serve customers better, Shui Zhong Tian upgraded the 128-yuan suancaiyu into a 218-yuan “suancaiyu + 2 cups of tea” combo. After the suancaiyu had sold for some time, Shui Zhong Tian noticed that regular customers began to drift away, and promptly developed a 499-yuan-per-serving crayfish dish. Why price the crayfish so high? First, the quality is excellent — pollution-free, large, all live on the day, with no more than 10 servings sold daily; second, Shui Zhong Tian positions itself for business clientele, who come not only for good tea but also for good food. Because most of the teahouse’s receptions are business occasions, having customers peel the crayfish themselves seemed less than elegant. Upon noticing this, Shui Zhong Tian promptly introduced a complimentary crayfish-peeling service, dramatically improving the value proposition of a 499-yuan serving. Through promotion across various new media platforms, Shui Zhong Tian’s crayfish became a hit in Xi’an as well.
The suancaiyu launched by Shui Zhong Tian.
Whether suancaiyu or crayfish, both are traffic-driving products for Shui Zhong Tian. Constantly innovating traffic-driving products better drives tea consumption. Through this traffic, customers who had not intended to drink tea became tea drinkers, gaining a second impression of Shui Zhong Tian. More importantly, through tasting, customers came to recognize the quality of Shui Zhong Tian’s tea, creating the conditions for tea repurchases. Shui Zhong Tian has established production bases in Wuyishan City and Anxi County in Fujian Province, Anji County in Zhejiang Province, and elsewhere, with a strict set of tea selection standards. From traffic to awareness to recognition, Shui Zhong Tian has achieved a closed loop in teahouse marketing. As a teahouse, Shui Zhong Tian has always kept tea’s share of total sales greater than food’s share.
Shui Zhong Tian’s Wuyishan old-bush black tea base.
6 Tea Shared Tea Room: Opening a New Track with an Innovative Marketing Model
Where are the pain points of traditional teahouses? High shop rental costs, high staffing costs, heavy loss of regular customers, and low rates of new customers walking in — these have become the four major problems constraining the development of today’s teahouse industry. And for consumers, the opacity of teahouse pricing deters them. Riding on the development of the sharing economy, 6 Tea Shared Tea Room was born in 2017 in Fuzhou, Fujian Province, offering a reference for solving these problems.
Interior of a 6 Tea Shared Tea Room.
According to Wu Xiang, 6 Tea Shared Tea Room currently has stores in every province except the three northeastern provinces, Xinjiang, and Tibet. The more than 300 stores opened are mainly located in office buildings, street-front shops, and residential communities — all private rooms, guaranteeing consumers’ privacy. Each teahouse covers 100 to 300 square meters, operates 24 hours, and includes tea snacks and fruit in its packages, with per-person consumption of only 38 yuan. 6 Tea Shared Tea Room’s consumption model is “online” ordering with “offline” consumption at the nearest location. Each store has only one staff member, covering service management, marketing, and promotion. Since the 2020 pandemic, 6 Tea Shared Tea Room has achieved relatively steady growth.
At 6 Tea Shared Tea Room, consumers purchase tea leaves by self-service.
6 Tea Shared Tea Room’s small store area reduces rental costs; self-service reduces staffing costs; and internet big data solves customer acquisition. More importantly, the cost reductions translate into affordable prices for consumers. 6 Tea Shared Tea Room developed a standardized consumption process: before entering, consumers have already completed payment “online”; once inside, besides drinking tea, they can also purchase tea leaves. All consumption in the teahouse is completed through self-service vending machines; staff do not proactively disturb customers, giving consumers transparent consumption. The 38-yuan per-person price lowers the threshold for consumers to walk into a teahouse and brings 6 Tea Shared Tea Room a steady stream of guests.
Waku Teahouse: Maximizing the Value of Space
In 2004, the first Waku teahouse opened in Xi’an, Shaanxi Province, and 28 chain stores have since opened across 16 cities in 8 provinces nationwide. Waku has not only withstood the test of the pandemic but also delivered an impressive report card. Since the 2020 pandemic, Waku’s turnover has kept growing. In the third quarter of 2020, Waku set its highest turnover in history. Even more encouraging, since the pandemic Waku has opened 4 new stores, and 3 more will officially open in the second half of this year.
Interior of Waku Store No. 17 in Zhengzhou.
From the day it was founded, Waku has held to one mission, unchanged for 18 years — “Waku, a place to drink tea.” Waku has always regarded space-building as the teahouse’s first core competitiveness: each of its 28 chain stores is designed as an independent work of art, with materials always centered on earth, wood, brick, tile, and stone, adhering to a design philosophy of sunlight, air, and greenery, providing consumers with a space of warmth and emotion. Consumers who walk into Waku value the experiential feel of the space most. Before the pandemic, Waku’s customers were mostly businesspeople aged 40 to 55. After the pandemic, the “post-90s” generation around 30 years old has gradually become Waku’s main consumer force. Through research, Waku found that after experiencing the pandemic, these groups place greater emphasis on the experiential feel of a space, with comfort and safety becoming their top concerns.
How can space deliver maximum value? Beyond offering ecologically organic teas and light meals, Waku has endowed its spaces with more cultural attributes, making the teahouse an artistic space of culture and a living space of aesthetics. Through four major segments — the Kuli Art Gallery, the Golden Statue Cottage, Waku Readings, and horticultural aesthetics — Waku lets consumers who walk in realize the aestheticization of life and the living of art. For example, each store holds 4 public-interest art exhibitions per year, covering photography, oil painting, Chinese painting, sculpture, and other art forms; and each month hosts one public-interest Waku Readings salon for the appreciation of literary works. Through these activities, Waku has strengthened its bond with members and endowed its spaces with cultural attributes. To date, Waku has held more than 100 cultural events, drawing nearly 3 million visits to its stores. These high-quality cultural and artistic activities have received widespread social attention and high recognition from consumers, supporting Waku’s brand strength — culture is becoming another of Waku’s core competitiveness.
The mind map produced by commenting expert Deng Zengyong.
Produced by: China Co-op Times · Tea Weekly All-Media
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Author: Lam Sam (LamSam), the Old Tea Head
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