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Tea in China
Euromonitor International, July 2007, Pages: 48
Our Tea in China report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data (2001-2006), allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they legislative, distribution or pricing issues. Forecasts to 2011 illustrate how the market is set to change.
Product coverage includes: black standard tea; black speciality tea; green tea; fruit/herbal tea; instant tea.
Data coverage: market sizes (historic and forecasts), company shares and brand shares.
Why buy this report?
- Get a detailed picture of the hot drinks industry
- Pinpoint growth sectors and identify factors driving change
- Understand the competitive environment, the market’s major players and leading brands
- Use five-year forecasts to assess how the market is predicted to develop
Rising incomes boost growth
Hot drinks continued to see strong growth in 2006, being buoyed by rising consumer income levels. These encouraged higher consumption levels, a trading up to higher quality products and also a shift away from unpackaged tea. Growing health awareness also encouraged sales growth, benefiting traditional leader green tea and also a range of tea variants with a healthy positioning and also supporting growth in fortified/functional 'other' plant-based hot drinks.
Convenience drives growth for instant drinks
Instant tea and instant standard coffee both saw strong growth in 2006. With growing urbanisation and a greater focus on working long hours and socialising, time-strapped consumers were attracted by the convenience offered by these products. In addition, players attempted to position instant tea and instant standard coffee as an indulgent treat, with the launch of flavoured variants of coffee and instant tea containing jelly.
Heavily fragmented shares with a large number of specialists
Hot drinks is heavily fragmented, with many of the leading players being present in only one product area. Leading player VV Group is, for example, only present in soyabean powder with Wei Wei Soyabean Milk Powder. Third-ranked Guangzhou Kraft is only present in instant standard coffee, while fifth-ranked Unilever is only present in tea. The forecast period is expected to see an increasing number of competitors enter this dynamic area. Nonetheless, the leading players may well gain share as they continue to expand distribution and invest in marketing and new product development.
On-trade dynamic with new chained entrants
The off-trade continued to dominate volume sales of hot drinks in 2006. However, the on-trade proved considerably more dynamic. Growth in the on-trade was boosted in general by rising income levels, which encouraged consumers to socialise more away from home. In addition, however, on-trade sales of coffee were boosted by the expansion of Starbucks and a number of independent cafés following a similar formula. On-trade sales of tea were meanwhile supported by strong expansion of chained tea houses by Tenfu Group, Beijing Zhangyiyuan Beverage Co Ltd and Beijing Wuyutai Tea Co Ltd.
Growing maturity but growth to continue in forecast period
Sales growth is expected to slow for hot drinks during the forecast period. During the review period, expansion focused on the major cities, where an affluent and sophisticated consumer base responded enthusiastically to new trends. During the forecast period, however, players will be attempting to grow sales in smaller cities and rural areas, where consumers often have a preference for traditional products, such as unpackaged green tea. Nonetheless, growth will continue at a good rate, being largely supported by widening interest in coffee and in healthy tea variants such as Oolong and Pu-Erh.
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