New Tea Drink Market Definition and Market Size
New tea drink brands refer to a series of rapidly emerging tea drink brands that have emerged in recent years, as opposed to traditional chain-owned ready-to-drink teas. New tea drink brands are based on high-quality products, using natural and premium raw materials to innovate tea-making formulas to create their products. They focus on brand culture construction and the creation of brand IPs. In recent years, a number of leading brands such as Xicha, Naxue's Tea, and Cha Yan Yue Se have emerged in the new tea drink industry. Frost & Sullivan analysis suggests that the rise of new tea drink brands has redefined the new tea drink market and formed four major criteria that define the new tea drink industry:
Four standards for the new tea beverage industry
1. Product quality: Carefully selected materials and innovative formulas
2. Brand Influence: New Consumer Brand Culture
3. Online and offline full-scenario capabilities: Diversified consumption scenarios
4. Digital Empowerment: Comprehensive Digital Operations
Currently, the leading brands in the new tea beverage market were all established around 2015. 2015 can be considered the inaugural year of China's new tea beverage market. After more than five years of rapid development, by 2019, the scale of China's new tea beverage market had reached approximately 7.88 billion yuan, with a compound growth rate of nearly 300% from 2015 to 2019. By 2025, the market scale of new tea beverages is expected to reach 384 billion yuan, leaving hundreds of billions of market space to be penetrated.
New tea drink market participants, represented by Hita and NaiXue's Tea, are actively deploying in various markets, triggering a new wave of younger consumer consumption in the tea drink industry in recent years. Whether from the perspective of business scale or brand awareness, Hita is the pioneer and leader of China's new tea drink industry, as well as a typical representative of the new consumption trend sweeping across China. The leading new tea drink brands, represented by Hita, are entering an era that belongs to them for a long time to come and will be glorious.
Analysis of Driving Factors and Development Prospects in the New Tea Drink Industry
Based on Frost & Sullivan's continuous market tracking and in-depth research on the new tea beverage market, it is found that four fundamental domestic factors will continue to solidify the development foundation of the new tea beverage industry, driving new tea beverage brands to further penetrate domestic and international market spaces.
//Cultural foundation
Traditional tea culture serves as the foundation. China's long-standing tea culture has created a vast and youthful consumer group for tea beverages. The scale of tea consumers in China is about 500 million people, far exceeding the rapidly developing coffee market in recent years. New tea beverage products, rooted in Chinese tea culture, will become the inheritors of traditional Chinese tea culture in the new era.
//economic foundation
Income growth and consumption upgrading. The stable growth of disposable income among Chinese residents has driven continuous increases in food consumption expenditure. At the same time, higher purchasing power, brand consumption demands, and quality consumption needs have gradually become the main drivers behind the wave of consumption upgrading, driving the overall large consumer industry and the new tea beverage industry in China.
//population base
The rise of the young consumer group. The new generation has become China's main consumer demographic, with nearly 225 to 35-year-olds bringing about about 4 trillion yuan in annual consumption expenditure. The growing population and consumption base of the new generation have propelled new tea drink brands with youthful and social attributes such as Xicha to stand out.
//Consumer habit foundation
Online lifestyle. Driven by local online platforms such as food delivery and the 'stay-at-home economy' during the 2020 pandemic, online consumption has gradually become a new consumption habit among Chinese young consumers. Leading new tea brands have also adapted to this trend, improving their mini-programs and food delivery services. At the same time, the development of online social habits among Chinese consumers and the viral marketing on social media have also helped new tea brands continuously attract customers and maintain brand popularity.
Analysis of the Competitive Landscape in the New Tea Beverage Industry
As of 2020, the new tea beverage industry has seen the emergence of leading brands represented by Hibi Tea and Naxcel.Matthew EffectIt continues to stand out. Judging from the number of stores as of the end of 2020 (690 stores in Mainland China by the end of 2020) and the average customer order value (the average customer order value in 2020 was about 52 to 56 yuan), Xicha is far ahead of other new tea beverage brands, becoming a benchmark in the new tea beverage industry in China and leading the trend towards high-end and quality in the Chinese new tea beverage market.
New Tea Drink Industry Consumer Insights
According to the results of this consumer survey, when consuming new tea drinks, consumers attach the most importance to three core elements: taste (accounting for 80%), tea drink safety and quality (accounting for 71%), and tea drink brand (accounting for 56%). Consumers born in the 1990s and 2000s are more sensitive to the prices of new tea drinks than those born in the 1980s. As the 'backbone' and 'rich group' of society today, consumers born in the 1980s tend to pay more attention to the taste and quality of tea drinks.
In China, Xicha and Naysuki's Tea are two of the most well-known new tea brands, having already established a certain gap in brand advantage over other new tea brands. Especially Xicha, which has the highest awareness, with 41.5% of consumers mentioning it without prompting. In first-tier cities, the brand advantage of leading new tea brands is even more evident, with consumers' unprompted mention rates for Xicha, Naysuki's Tea, and Leluo Tea in these cities all higher than the national average.
