China Menu Insights – Tea Houses Market Report 2021
“Tea house growth will accelerate into the next phase by adopting specific functional ingredients. Brands also need to leverage direct communication with explicit health perks. Facing unstoppable homogenisation in innovation,…

China Menu Insights – Tea Houses Market Report 2021

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Report Summary

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Covered in this Report
        • Executive Summary

            • The market
              • Sales value needs a year to recover while volume size continues to inflate
                • Figure 1: Value sales and annual growth rate of tea house market, China, 2016-2021
                • Figure 2: Volume and annual growth rate of tea house market, China, 2019-2021
              • Companies and brands
                • Distinct marketing tactics for similar products
                  • Revival of the classics: a fresh perspective on marketing nostalgic products
                    • Nutritious indulgence propels orders and higher spending
                      • The consumer
                        • Stable brand choice with two emerging players squeezing into the top rankings
                          • Figure 3: Purchased brands, 2020-2021
                        • Indulgence continues to play a big part in brand selection while loyalty is being cultivated
                          • Figure 4: Brand choice factors, 2021
                        • Out-of-home occasions record most purchases and relaxation needs spurs self-motivated orders
                          • Figure 5: Consumption motivation, 2021
                        • Health indulgence fuels growth by triggering higher spending
                          • Figure 6: Premiumisation factors, 2021
                        • Purple rice and red beans’ nutritious value is appreciated while agar jelly stands out for its low calories
                          • Figure 7: Ingredient perception, 2021
                        • Infancy stage of spinoff offerings ignites future opportunities
                          • Figure 8: Spinoff products at tea houses, 2021
                        • What we think
                        • Issues and Insights

                          • Direct functionality communication simplifies decision making process
                            • The facts
                              • The implications
                                • Move into meal catering to expand portfolio and confront looming competition
                                  • The facts
                                    • The implications
                                      • Unite tea drinkers with common interests via recreational and cultural icons
                                        • The facts
                                          • The implications
                                            • Figure 9: HEYTEA & Huanle Doudizhu’s pop-up store in Shenzhen and HEYTEA’s collaboration with Jiangnan Baijingtu
                                            • Figure 10: CHA BAI DAO & Dunhuang Museum’s collaborative tea drinks
                                        • The Market – Market Size

                                          • High single-digit growth will rejuvenate the market in 2021
                                            • Figure 11: Value sales and annual growth rate of tea house market, China, 2016-2021
                                          • Store numbers approaching 600,000
                                            • Figure 12: Volume and annual growth rate of tea house market, China, 2019-2021
                                        • Market Factors

                                          • Prevailing trend of homogenous offering brings mixed impact
                                            • Scramble for ingredient sourcing leads to rising costs
                                              • Amplified dominance means smaller brands follow suit
                                                • Figure 13: Emblic drinks from Guiyuanpu and Mizhilian
                                              • Traditional tea houses pose challenges for fresh tea drinks
                                                • Figure 14: Yinxi Teahouse’s in-store ambience
                                              • Multiple premiumisation opportunities to capture
                                                • Nayuki to IPO on HKEX, first ever in the market
                                                • Key Players – Market Share

                                                  • Diverse growth trajectory further intensifies
                                                    • Figure 15: Store numbers and volume share of the top brands, China, 2019-2021
                                                  • Southern cities take a giant leap in new store outlets
                                                    • Figure 16: Top ten cities with the most tea house outlets, China, 2020-2021
                                                • Marketing Strategies

                                                  • Case study – Nayuki & HEYTEA’s different marketing tactics for similar products
                                                    • Nayuki accentuates authentic ingredients and refreshing flavour
                                                      • HEYTEA bets on crossover marketing to enhance product perception
                                                        • Figure 17: HEYTEA’s collaboration with Mr Muscle
                                                      • Recalibrate nostalgic lemon tea in a modern context
                                                        • Figure 18: HEYTEA’s line of lemon tea drinks
                                                      • First domestic standards for fresh tea drinks published by Nayuki
                                                        • Figure 19: Pure tea drinks jointly launched by Nayuki and China Tea Science Society
                                                      • HEYTEA gears up to better food safety management and optimise supply chain
                                                      • New Product Trends

                                                        • Niche fruits come in handy for novelty and differentiation
                                                          • Figure 20: Emblic-based tea drinks from Nayuki and HEYTEA
                                                          • Figure 21: Tea drink with tomatoes & lemon juice with bitter gourd
                                                        • Advent of functional ingredients accelerates permissible indulgence
                                                          • Figure 22: HEYTEA’s probiotic adding option & tea drinks from Swisse
                                                        • Festive foods may become a new growth engine
                                                          • Figure 23: HEYTEA’s zongzi gift box designed for Dragon Boat Festival
                                                          • Figure 24: HEYTEA’s Dragon boat-shaped bread
                                                          • Figure 25: HEYTEA pork mooncake
                                                      • The Consumer – Purchased Brands

                                                        • Static penetration level with established brands dominant
                                                            • Figure 26: Purchased brands, 2020-2021
                                                          • CHA BAI DAO and Auntea Jenny squeeze into the top rankings
                                                              • Figure 27: Purchased brands – “CHA BAI DAO & Auntea Jenny”, by gender and age, 2021
                                                              • Figure 28: Purchased brands – “CHA BAI DAO”, by region, 2021
                                                              • Figure 29: Purchased brands – “Auntea Jenny”, by city tier, 2021
                                                            • MIXUE expands on a speedy track with the biggest rise in penetration
                                                                • Figure 30: Purchased brands – “MIXUE Ice Cream & Tea”, by dining habits, 2021
                                                            • Brand Choice Factors

                                                              • Flavour options wield decisive power in drawing purchases
                                                                • Figure 31: Brand choice factors, 2021
                                                                • Figure 32: Brand choice factors – “rich choice of flavours & convenient location”, by city, 2021
                                                                • Figure 33: Brand choice factors – “rich choice of flavours”, by dining habits, 2021
                                                              • Effort to increase brand attachment may start to pay off
                                                                • Figure 34: Brand choice factors – “used to the brands & exclusive signature drinks”, by gender and age, 2021
                                                              • Different expectations for spatial offerings
                                                                • Figure 35: Brand choice factors – “provide space to sit down”, by dining habits, 2021
                                                                • Figure 36: Brand choice factors – “have special stores”, by city tier, 2021
                                                              • Divergent purchase triggers for different brands
                                                                • Figure 37: Brand choice factors, by purchased brands, 2021
                                                            • Consumption Motivation

                                                              • Out-of-home occasions still dominate consumption overall
                                                                • Figure 38: Consumption motivation, 2021
                                                                • Figure 39: Consumption motivation – “order tea drinks on my own initiative when going out shopping”, by gender and age, 2021
                                                                • Figure 40: Consumption motivation – “order tea drinks on my own initiative when going out shopping”, by city tier, 2021
                                                                • Figure 41: Consumption motivation – “order tea drinks on my own initiative when dining out”, by region, 2021
                                                                • Figure 42: Consumption motivation – “order tea drinks on my own initiative when dining out”, by gender and age, 2021
                                                              • “Me time” indulgence prompts self-motivated purchases
                                                                • Figure 43: Consumption motivation – “order tea drinks on my own initiative when relaxing at home”, by gender and age, 2021
                                                                • Figure 44: Consumption motivation – “order tea drinks on my own initiative when relaxing at home”, by food-related behaviour, 2021
                                                              • HEYTEA’s invisible partnership with outdoor fun and relaxation
                                                                • Figure 45: Consumption motivation – “when going out shopping & doing recreational activities out of home”, by purchased brands – “HEYTEA”, 2021
                                                            • Premiumisation Factors

                                                              • Health perks breed opportunities to premiumise
                                                                • Figure 46: Premiumisation factors, 2021
                                                                • Figure 47: Premiumisation factors – “good for physical health”, by region, 2021
                                                                • Figure 48: Premiumisation factors – “good for emotional health”, by marital status, 2021
                                                                • Figure 49: Premiumisation factors – “good for physical health & good for emotional health”, by gender and age, 2021
                                                              • Different regional inclinations for premiumisation features
                                                                • Figure 50: Premiumisation factors, by region, 2021
                                                              • Pet owners particularly demanding about tea leaf provenance
                                                                • Figure 51: Premiumisation factors – “tea leaves from famous origins”, by living situation, 2021
                                                              • Open-minded about different premiumisation attributes
                                                                • Figure 52: Premiumisation factors – repertoire analysis, 2021
                                                            • Ingredient Perception

                                                              • Ingredients with balanced perception
                                                                • Figure 53: Ingredient perception, 2021
                                                              • Ingredients with polarised perception
                                                                • Elevating appreciation for the nutritious values of purple rice and red bean
                                                                  • Figure 54: Ingredient perception – “those who think purple rice/red bean/nuts is nutritious”, by city, 2021
                                                                • Meal indulgent consumers count on agar jelly for low-calorie tea drink alternative
                                                                  • Figure 55: Ingredient perception – “those who think agar jelly’s calorie level is low”, by dining habits, 2021
                                                                • Open to flavour enrichment
                                                                • Spinoff Products at Tea Houses

                                                                  • Low availability gives rise to light penetration levels
                                                                    • Figure 56: Spinoff products at tea houses, 2021
                                                                    • Figure 57: Spinoff products at tea houses – “those who haven’t purchased any products other than tea drinks”, by city tier, 2021
                                                                  • Consumers in their late 20s express exuberant interest
                                                                    • Figure 58: Spinoff products at tea houses, by age, 2021
                                                                  • Nearly half of purchasing consumers buy 2-3 types of spinoff products
                                                                    • Figure 59: Spinoff products at tea houses – repertoire analysis, 2021
                                                                • Appendix – Methodology and Abbreviations

                                                                  • Methodology
                                                                    • Abbreviations

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