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China Tea Shops Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Tea Shops market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

This report looks at consumers’ consumption behaviour towards tea shop drinks and their attitudes towards tea shop drinks, tea shops and related spin-offs.

Tea shops are defined as foodservice operators where freshly made soft drinks are the primary sales items and offer a wide variety of the drinks that mainly are milk tea, milk cap tea, pure tea drinks, fruit tea, matcha drinks, nut milk drinks, pure milk drinks and fresh juice drinks.

Traditional teahouses and morning teahouses are excluded.

Key points included

  • Younger consumers like blended drinks while older like pure drinks
  • Potential collaboration with different service shops
  • IP collaboration has potential to enlarge consumer scope

What you need to know

Mintel’s research shows that consumers’ choices of tea shop drinks are mostly taste-led, and they would like to pay more for natural and fresh ingredients. Going out shopping and hanging out with friends are the main consumption occasions; also most consumers would treat tea shops as a meet-up point or a resting place. Just over a third of people have bought tea shop drinks in working occasion, but this occasion has the potential to grow further.

Expert analysis from a specialist in the field

Written by Belle Wang, a leading analyst in the Food & Drink sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Consumers are mostly taste-led when choosing tea shop drinks, and they would like to pay more for natural and fresh ingredients. The seemingly non-stop innovation activity in this foodservice area has been driving much of the business revenue. As more consumers, including the young generation, pay attention to the nutrition value on drinks, tea shops can try to apply more types of coarse grains or traditional Chinese herbs to meet consumers’ demand for healthy drinks and nourishing the body. Belle Wang
Food & Drink Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
        • Excluded
        • Executive Summary

            • The market
              • A steep growth followed by a slow increase in value
                • Figure 1: Best- and worst-case forecast for tea shop drinks, by value, 2013-23
              • A steady growth in volume
                • Figure 2: Best- and worst-case forecast for tea shop drinks, by volume, 2013-23
              • Social media boosts new products promotion and sales
                • Companies and brands
                  • Brands with varied status have different strategies
                    • Natural sweeteners get a chance in tea shop drinks
                      • Innovating by providing extra benefits
                        • The consumer
                          • More heavy users prefer offline purchase channels
                            • Figure 3: Frequency and channels, China, August 2018
                          • Consumers with moderate consumption frequency prefer online channels
                            • Milk tea is the mainstream product followed by fresh juice
                              • Figure 4: Product penetration, China, August 2018
                            • More people consume tea shop drinks when going out shopping
                              • Figure 5: Consumption occasions, China, August 2018
                            • Bright prospect for work occasion
                              • Taste is essential for tea shop drinks followed by variety and price
                                • Figure 6: Purchasing triggers, China, August 2018
                              • Fresh and natural ingredients motivate people to pay more
                                • Figure 7: Premium factors of products, China, August 2018
                              • Spin-offs have the potential to generate incremental revenue
                                • Figure 8: Attitudes towards tea shops, China, August 2018
                              • What we think
                              • Issues and Insights

                                • Younger consumers like blended drinks while older like pure drinks
                                  • The facts
                                    • The implications
                                      • Potential collaboration with different service shops
                                        • The facts
                                          • The implications
                                            • IP collaboration has potential to enlarge consumer scope
                                              • The facts
                                                • The implications
                                                • The Market – What You Need to Know

                                                  • The market will keep growing
                                                    • Social media is the key marketing platform
                                                      • Freshness and nutrition stimulate consumption
                                                      • Market Size and Forecast

                                                        • Slow value growth in five years
                                                          • Figure 9: Best- and worst-case forecast for tea shop drinks, by value, 2013-23
                                                        • Steady volume growth
                                                          • Figure 10: Best- and worst-case forecast for tea shop drinks, by volume, 2013-23
                                                      • Market Drivers

                                                        • High frequency of product innovation
                                                          • Short video platforms help boost sales
                                                            • Nourishing body is deeply rooted in consumers’ daily lives
                                                            • Key Players – What You Need to Know

                                                              • Leading and smaller brands have different focuses
                                                                • Marketing strategies target female consumers
                                                                  • Health always takes vital place in consumers’ minds
                                                                  • Competitive Strategies

                                                                    • Leading brands put efforts beyond the core products
                                                                      • Figure 11: Using fashion elements, by HEYTEA, China, 2018
                                                                      • Figure 12: Enzymes and Seven-day tea leaves, by inWe, China, 2018
                                                                      • Figure 13: Membership card, by NAYUKI, China, 2018
                                                                      • Figure 14: Innovative eating ways, by NAYUKI, China, 2018
                                                                    • Crossover marketing
                                                                      • Figure 15: HEYTEA with Marie Dalgar and Pechoin, China, 2018
                                                                    • Desserts enrich consumers’ experience in tea shops
                                                                      • Secret menu drives curiosity
                                                                        • Figure 16: Hidden menu posted on Red by individual based on personal experience, China, April 2018
                                                                      • Smaller brands concentrating on developing new products
                                                                        • Figure 17: Flowing shimmers in drink with natural ingredients, by Juice Cubi, China 2018
                                                                        • Figure 18: Grapefruit enzyme rose cup, by Oritea, China, 2018
                                                                      • Eye-catching is the key to become internet-famous
                                                                        • Figure 19: Northern lights, by The Alley, China
                                                                        • Figure 20: Milk tea in perfume bottle, by TRIPLE P, China, 2018
                                                                        • Figure 21: Window display borrowed idea from clothing and accessories, by KOI The, China
                                                                    • Who’s Innovating?

                                                                      • Using stevia instead of sugar
                                                                        • Figure 22: Stevia with fewer calories, by HEYTEA, China, 2018
                                                                      • Chinese herbal functional tea for nourishing
                                                                        • Figure 23: BALANCE Lotus leaf Detox water, by Yan Yue Shan, China
                                                                        • Figure 24: Donkey-hide gelatine and jujube milk tea, by Yan Yue Shan, China
                                                                        • Figure 25: Freshly boiled donkey-hide gelatine and jujube milk tea, by Yan Yue Shan, China
                                                                      • Drink for beauty
                                                                        • Figure 26: Rose water with Lumi collagen, by Yan Yue Shan, China
                                                                      • Pairing with light meals or being meal replacements
                                                                        • Figure 27: Tea shop drink made of taro, brown rice and oat grain, by Mi Dou You Liao, China 2018
                                                                    • The Consumer – What You Need to Know

                                                                      • Opportunities in associating with working occasion
                                                                        • Nut milk drinks have potential to grow further
                                                                          • Premiums for consumers aged 30-49
                                                                          • Tea Shop Visiting Frequency

                                                                            • People visit physical stores more often than order online with one exception
                                                                              • Figure 28: Frequency and channels, China, August 2018
                                                                              • Figure 29: Purchase channels and frequency – less than once a month, by monthly personal income, China, August 2018
                                                                              • Figure 30: Purchase channels and frequency – 1-3 times a month, by gender and age, China, August 2018
                                                                            • Heavy users prefer to buy offline
                                                                              • Figure 31: Purchase channels and frequency – 3-4 times a week, by age, China, August 2018
                                                                              • Figure 32: Purchase channels and frequency – 3-4 times a week, by region, China, August 2018
                                                                            • More heavy users in tier one cities than lower tier cities
                                                                              • Figure 33: Consumption frequency and channels, by city tier, China, August 2018
                                                                          • Product Penetration

                                                                            • Milk tea has the highest penetration rate
                                                                              • Figure 34: Product penetration, China, August 2018
                                                                              • Figure 35: Penetration of milk tea, by city, China, August 2018
                                                                            • Nut milk drinks have a strong growing momentum
                                                                              • Consumers aged 18-29 and 30-49 have differences in choosing tea shop drinks
                                                                                • Figure 36: Product penetration, by age, China, August 2018
                                                                            • Consumption Occasions of Tea Shop Drinks

                                                                              • Shopping offline and hanging out are the main consumption occasions
                                                                                • Figure 37: Consumption occasions, China, August 2018
                                                                              • Consumption occasions affect the purchase channels
                                                                                • Figure 38: Consumption occasions, by channels and frequency – less than once a month, China, August 2018
                                                                              • More tier one cities’ residents have bought tea shop drinks at work
                                                                                • Figure 39: Consumption occasions, by city tier, China, August 2018
                                                                                • Figure 40: Drinks from tea shops consumed in working occasion, by selected city tier, China, August 2018
                                                                              • Popular tea shop drinks in entertainment occasions
                                                                                • Figure 41: Selected consumption occasions, by city tier, China, August 2018
                                                                            • Purchasing Triggers

                                                                              • Taste determines consumers’ purchase choice
                                                                                • Figure 42: Purchasing triggers, China, August 2018
                                                                              • Not desired third place at present
                                                                              • Premium Factors of Products

                                                                                • Innovative flavours encourage more than half of consumers to pay more
                                                                                  • Freshness and naturalness are always the key things
                                                                                    • Figure 43: Premium factors of products, China, August 2018
                                                                                  • Characteristics of premium tea drinkers
                                                                                  • Attitudes towards Tea Shops and the Drinks

                                                                                    • Half of consumers will not queue for hours...
                                                                                      • Figure 44: Attitudes towards tea shops, China, August 2018
                                                                                    • …but females will queue for nut milk drinks
                                                                                      • Figure 45: Selected attitudes towards tea shop drinks, by gender and product type, China, August 2018
                                                                                    • Two thirds of consumers like to buy spin-offs from tea shops
                                                                                      • Figure 46: Attitudes towards tea shops, China, August 2018
                                                                                    • Most consumers think tea shops are good places for meeting up
                                                                                      • Figure 47: Attitudes towards tea shops, China, August 2018
                                                                                  • Meet the Mintropolitans

                                                                                    • Tea shop drinks are indispensable for most Mintropolitans
                                                                                      • Figure 48: Attitudes towards drinks from tea shops, by consumer classification, China, August 2018
                                                                                      • Figure 49: Consumption occasions, by consumer classification, China, August 2018
                                                                                      • Figure 50: Attitudes towards drinks from tea shops, by consumer classification, China, August 2018
                                                                                      • Figure 51: Attitudes towards drinks from tea shops, by consumer classification, China, August 2018
                                                                                    • Mintropolitans have more requirements from drinks from tea shops
                                                                                      • Figure 52: Purchase triggers, by consumer classification, China, August 2018
                                                                                      • Figure 53: Attitudes towards drinks from tea shops, by consumer classification, China, August 2018
                                                                                  • Appendix – Market Size and Forecast

                                                                                      • Figure 54: Sales value of tea shop drinks, China, 2013-23
                                                                                      • Figure 55: Sales volume of tea shop drinks, China, 2013-23
                                                                                  • Appendix – Methodology and Abbreviations

                                                                                    • Methodology
                                                                                      • Fan chart forecast
                                                                                        • Abbreviations