2024 is a key year for achieving the goals and tasks of the “14th Five-Year Plan,” with heavy and arduous tasks regarding reform, development, and stability.
2024 is an important year for implementing the “Suggestions for the 14th Five-Year Development Plan of China’s Tea Industry,” as the optimization and upgrading of the tea economic system are urgent.
Against the economic backdrop of a downturn and consumption downgrading, what new challenges and changes has the Chinese tea industry experienced in 2024? What new shifts and trends have emerged? How can development be sought amidst these challenges?
As a mainstream media platform for the Chinese tea industry, China Cooperation Times · Tea Weekly All-Media bears the responsibility of promoting industry development and has released the “China Tea Industry Observation Report” for three consecutive years. In addition to leveraging the expertise of professional journalists from Tea Weekly, the “2024 China Tea Industry Observation Report” also invited numerous experts and scholars with deep knowledge of industry patterns and years of experience in specific tea sectors to participate in its creation, identifying prominent issues, providing solutions, and contributing wisdom to industry development through profound reflection.
The “2024 China Tea Industry Observation Report” consists of eight chapters, covering eight key areas: industry development strategy, supply chain, technology, brands, e-commerce, physical spaces, consumption, and culture. It adheres to the principle that “observation stems from the front lines, and conclusions stem from practice,” seeking problems in practice, finding answers in practice, and observing trends through practice.
Slowing growth: The inertia of tea e-commerce
How to break through the difficulties?
Author: Wang Jing, reporter for China Cooperation Times · Tea Weekly All-Media, senior tea sommelier; has visited core tea-producing regions many times and conducted long-term field research in consumption markets; has published numerous articles on the tea consumption market.
Introduction: After years of rapid development and with the support of macro policies, China’s e-commerce is entering an era of structural reshaping and natural selection. As the e-commerce economy moves from wild growth to standardized development, tea e-commerce is also undergoing iterative upgrades. Following several years of significant growth, tea e-commerce has shown a trend of slowing growth in 2024. By reviewing the current state and difficulties of the e-commerce economy and tea e-commerce, this article analyzes the causes and explores coping strategies to help tea enterprises seize opportunities within the changing e-commerce environment and achieve sustained growth in efficiency.
(I)
Current State of China’s Tea E-commerce Development in 2024
In 2024, China’s e-commerce market continued to grow at a high speed. To promote the healthy development of e-commerce, the State Council introduced various policies covering cross-border e-commerce, platform regulation, and rural e-commerce to support e-commerce development.
E-commerce platforms are breaking down barriers, creating more convenience for consumers purchasing tea. In September 2024, Taobao announced support for WeChat Pay. Subsequently, JD Logistics fully integrated with Taobao and Tmall, achieving connectivity with the Cainiao system. In October, within the WeChat interface, users were able to open Taobao links to shop without needing to redirect. These changes reflect the trend toward interconnectivity in the internet industry, providing more convenience and choices for consumers and enhancing the vitality of the consumption market. By breaking down barriers and achieving interface interoperability, e-commerce platforms not only grant consumers more choice but also activate a more vibrant consumer market.
The proportion of online tea sales in China continues to grow; it is estimated that the growth rate of online tea sales over recent years has been between 8% and 10%.
Proportion of Online Tea Transactions in China, 2019–2023
As a non-standardized end-consumer product, consumers must distinguish between false advertising regarding origin, vintage, grade, and other aspects when purchasing on e-commerce platforms. This has seriously affected consumer enthusiasm for online tea purchasing, which is why online sales have failed to become the primary channel for tea sales despite years of development. Overall, the performance of China’s tea e-commerce in 2024 is as follows:
1
Live streaming has become the mainstream of e-commerce development, with increasing professionalism and professionalization among streamers.
Among numerous online marketing methods, live streaming e-commerce has become a focus for enterprises due to its unique charm and immense potential. Data shows that the scale of the live streaming e-commerce market has reached 4.9 trillion yuan. This figure is not only striking but also demonstrates its rapid momentum. In fact, the growth rate of live streaming e-commerce is as high as 35.2%, far exceeding other traditional forms of e-commerce. The Chanmofang “Douyin E-commerce Tea Industry Analysis Report” shows that in the first half of 2024, 80% of sales in the Douyin tea industry came from live streaming, proving the core position of Douyin Live in tea e-commerce sales. It is expected that in the coming years, live streaming e-commerce marketing will remain a normalized strategy for tea enterprises and tea farmers.
At the same time, professional streamers are on the rise. A group of professional streamers has emerged in the tea e-commerce sector, possessing professional tea knowledge, a certain number of followers, and deep expertise in e-commerce operations and live streaming techniques. Their audience includes not only ordinary consumers but also many seasoned tea enthusiasts. As the degree of professional segmentation among e-commerce streamers continues to increase, the field for tea streamers is expanding.
2
Top streamers are cooling down; tea enterprise store-streaming and tea farmer self-streaming are flourishing.
On today’s e-commerce platform live pages, one can see not only top streamers but also tea brands joining the ranks of live streaming, using store-streaming to showcase and introduce their products, while even more tea farmers are stepping in front of the screen to promote their goods with vigor. The “2024 Douyin E-commerce Small and Medium Merchant Live Streaming Development Report” shows that in 2024, over 2 million small and medium merchants achieved business growth through live streaming, with the number of small and medium merchants starting self-streaming increasing by 165% year-on-year.
The “de-top-streamer” trend has become a reality, and the released traffic will benefit brands and small/medium streamers. On the Douyin platform, 5_0% of the cumulative live streaming sales from influencer streamers are contributed by small and medium streamers with fewer than 300,000 followers; in 2024, the live streaming sales of these small and medium streamers grew by 58% year-on-year, becoming an important force driving the live streaming consumption market. Whether tea enterprises build their own streamer teams or tea farmers become streamers themselves, the increasing volume of live streaming is actually the result of the combined efforts of e-commerce platforms, sellers, and buyers. The collective effort of these three parties has made live streaming sales increasingly popular in the tea industry, becoming an indispensable sales force.
3
“9.9 Yuan Tea” is no longer appealing; consumers are losing their fascination with “extreme low prices.”
Considering the economic pressure in recent years, consumer decision-making has become increasingly rational. E-commerce platforms hoped to ignite downstream consumption passion using extreme low-price strategies, so marketing methods such as “9.9 Yuan with free shipping,” “10 Billion Subsidies,” and “Lowest Prices Nationwide” have almost become standard features on all e-commerce platforms. However, due to the pursuit of extreme low prices, the quality of most products cannot be guaranteed, leading to a significant drop in consumer satisfaction and subsequent cautious consumption. “Tea for 9.9 Yuan per jin, including free shipping” was once quite popular, and various e-commerce platforms offer such products, with pages showing sales exceeding 10,000 units; however, this tactic is no longer effective today. Even for some “100 Yuan per jin” products like Pre-Qing Longjing, ancient tree tea, or Niulankeng Rougui, the first reaction upon seeing them is “Is it drinkable?” “Is it safe?” or “It must be fake”; most consumers are no longer buying into it. Furthermore, under the guidance of e-commerce low-price strategies, some tea enterprises have created two different product lines: an “e-commerce line” and a “store line.” The “e-commerce line” has gradually become synonymous with “value for money” or even just “low price,” causing increasing skepticism among consumers.
4
Branded tea occupies a significant share of the e-commerce market.
Branded tea holds a significant market share and performs excellently. During the “Double 11” period, data released by Tmall showed that Fuyu Tang rose to first in the industry for the first time; Bama, Dayi, and Yifutang remained in the top ten; Zhang Yiyuan, Xihu Brand, and Xinyihe appeared on the list for three consecutive years; Shifeng Brand appeared for two consecutive years; and Zhengshantang and Huayanghua were the “dark horses” of this year’s “Double 11.” Additionally, Dayi, which has held the top spot on the “Double 11” tea industry list for nine consecutive years, ranked third this year, overtaken by Fuyitang and Bama. These well-known brands have gradually established strong brand effects through long-term market accumulation and word-of-mouth from consumers, making consumers more inclined to choose these guaranteed branded products when selecting tea.
(II)
Problems in China’s Tea E-commerce in 2024
1
Issues such as false advertising and lax quality control occur frequently.
Problems of exaggeration and false advertising in e-commerce platforms and live streaming rooms are persistent. Moreover, many top streamers have faced “scandals,” damaging the e-commerce ecosystem and seriously undermining consumer trust in e-commerce platforms.
The tea e-commerce market is a mixed bag; for consumers who do not understand tea or only have a superficial knowledge, it is very easy to be deceived. Tea that normally costs several thousand or even tens of thousands of yuan per jin is sold at “welfare prices” of a hundred yuan in live streaming rooms, attracting many curious consumers to place orders. However, this type of one-off consumption behavior is extremely detrimental to the long-term development of the tea market. It not only exacerbates the trust crisis in the tea market but also makes tea—an agricultural non-standardized product—increasingly “mysterious.” The perplexing prices leave consumers unable to grasp the reality, leading to a reluctance to purchase due to fear of being cheated.
2
“E-commerce exclusive” and “low quality, low price” have become synonymous.
The pursuit of extreme low prices through “involutionary” competition has damaged the ecological environment for the development of China’s tea industry. Many tea enthusiasts use the “image search” function on online shopping platforms to search for the same brand and product, often finding tea that is cheaper than in physical tea shops, only to find that the received goods differ from the products in physical stores. This situation is not uncommon; due to the rapid development of e-commerce, merchants have seen huge business opportunities in e-commerce channels. To cater to e-commerce product trends and reduce costs, more and more tea enterprises are launching “e-commerce exclusive” products on e-commerce platforms. In fact, these “e-commerce exclusive” goods are not fakes, but some products suffer from issues like “low quality and low price.” While the appearance of these “e-commerce exclusives” seems identical to offline products, they differ greatly in terms of product specifications and after-sales service.
(III)
The Future Path of China’s Tea E-commerce
1
The role of professional tea streamers is becoming increasingly prominent.
The rise of professional streamers brings a win-win situation. For merchants, leveraging the influence of professional streamers can quickly open up markets and obtain timely user feedback, thereby continuously optimizing products and services. For platforms, gathering a large number of professional streamers enriches the content ecosystem, enhances the user shopping experience, and attracts more users and merchants to join.
In the future, cooperation between platforms and streamers will involve more than just sales; it will be more about the transmission of knowledge and culture. Extracting professional industry knowledge and creating in-depth content will be the next important task for streamers. As demonstrated by Cao Han, Mengmeng, and Shengchun, streamers pursuing professionalism and knowledge sharing will lead the new trend in e-commerce live streaming. The trend of professionalization and knowledge sharing in e-commerce live streaming is changing the way traditional e-commerce operates, allowing more streamers and merchants to achieve sustainable development through profound professional knowledge and skills.
2
Physical stores are showing a trend of recovery; competition in tea e-commerce is intensifying.
In 2024, one can clearly feel that business in physical stores is gradually improving, which is quite heartening compared to the situation from 2020 to 2023. Compared to online channels, physical stores still possess significant advantages in creating an offline experience; e-commerce and physical stores are complementary in many ways.
Although e-commerce still occupies an important position in China’s consumer market, its growth momentum has slowed down. While e-commerce once disrupted offline stores with lower operating costs, physical stores are now winning back some consumers through high-quality service and more interactive experiences; the process of natural selection in future tea e-commerce competition will become even more prominent. Competition for tea enterprises on e-commerce platforms is no longer a simple price war, but a comprehensive contest based on service, efficiency, and user experience. Pursuing extreme low prices is a form of vicious competition; in the long run, price wars are no longer a winning formula. Tea e-commerce products must return to product quality and user experience, creating competitive advantages beyond price through targeted investments. This provides more possibilities for tea enterprises to improve product quality and increase brand benefits. “E-commerce exclusive” should not be synonymous with “low quality and low price”; “e-commerce exclusive” products should also be qualified products with proper performance.
Research Group
Chief Planner
An Mingxia
Members
Zhang Xinzhong
Chen Hao
Xiao Qiang
Tian Youlong
Wang Jing
Liang Yan
Deng Zengyong
An Mingxia
Copyright Statement
The “2024 China Tea Industry Observation Report” is released by China Cooperation Times · Tea Weekly All-Media,
—
Author: Lam Sam (LamSam), the Old Tea Head
ZENTEA MANOR
Alliance Supply Chain Services Limited
Unit 902-3, 9/F, Mini Cube, 10 Sam Chuk Street, San Po Kong, Kowloon, Hong Kong
www.zentea-shop.com Email:info@zentea-shop.com
