| | Savouring New Tea Culture and Exploring the Industry Potential China has a long history of tea culture. Dating back to the Tang Dynasty, Lu Yu, a Chinese tea master, composed a seminal work on tea culture titled the Classic of Tea. Before the Ming Dynasty, the tea culture had been mainly embraced by literati and scholars, and its popularity steadily expanded after the Qing Dynasty. Today, tea drinking has become deeply ingrained in the daily lives of the general public. Nowadays, contemporary tea beverages have incorporated cultural characteristics from diverse regions and ethnicities (for example, iced tea and afternoon tea), with its solid foundation rooted in the intrinsic value of the Chinese tea culture. This has given rise to a distinct and unique new tea culture. Following the big health trend, the tea beverage market places great emphasis on the raw materials as ingredients. In the emerging field of tea beverages, which garners significant attention from investors, leading brand enterprises have adopted a “farmer + company” model. They establish a complete industry chain which encompasses raw material sourcing, research and development, production, warehousing and logistics, operational management, and retail sales. These enterprises strategically expand their businesses with comprehensive plans targeting in third-tier and lower-tier cities, engaging in dislocation competition with other popular brands that have established their presence. | |
| | | In Macao, which focuses on the development of the big health industry through the research and manufacturing of traditional Chinese medicine, healthy tea beverages have emerged as a growing direction in Macao’s tea beverage market. To cater to the preferences of young people who like to try new options, the healthy tea beverage market introduces innovative flavours during product launch events. With Macao’s inbound tourists exceeding 22.72 million, which marks an increase of nearly 3.6 times higher year-on-year, a strong economic recovery momentum is clearly seen. Hence, investors have a positive outlook on the prospects of the Macao’s beverage market. They are opening factories and venturing into the healthy tea beverage market taking advantage of the Investor’s “One-stop” Service provided by the Macao Trade and Investment Promotion Institute (IPIM) and its Investment Committee’s cross-departmental co-operation mechanism. It is noteworthy that with the support of the Macao SAR government, the Traditional Chinese Medicine Science and Technology Industrial Park of Co-operation between Guangdong and Macao located in the Guangdong-Macao In-Depth Co-operation Zone in Hengqin, can provide a platform for Macao enterprises interested in running a factory production in mainland China for healthy tea beverages. Furthermore, the Traditional Chinese Medicine Industrial Park will establish co-operative relationships with Portuguese-speaking countries, facilitating the entry of healthy tea beverage products into the markets of those countries. | |
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| Seizing the Health and Wellness Trend and Uncovering Business Opportunities in the Tea Beverage Market Currently, when observed from the industry chain, we see that the upstream of the tea beverage market in mainland China involves raw material supply, while the middle stream engages in the design – production – packaging of tea beverages. The downstream encompasses offline stores and online delivery channels. In terms of classification, there are three major categories in the market: new tea beverages, bagged teas, and ready-to-drink teas, of which the new tea beverage sector has gained significant attention from investors. According to data from the China Chain Store & Franchise Association, the market size of new tea beverages in mainland China has grown from RMB42.2 billion in 2017 to RMB100.3 billion in 2021, with a compound annual growth rate of over 20%. Projections indicate that the market size of new tea beverages will reach RMB145 billion by 2023. The characteristic of new tea beverages is that they are available for purchase throughout the day, with orders primarily concentrated during lunch, afternoon tea, and dinner. In other words, new tea beverages are increasingly chosen to accompany meals. Typically, new tea beverage brands are labelled as “sugar-free”, “low sugar” or “high sugar” to indicate the sugar content level. In the past, due to the absence of unified standards for indicating sugar content in tea beverages, there was often a discrepancy between the actual sugar content of new tea beverages and consumers’ expectations. Moreover, some new tea beverages are made with processed ingredients such as condensed milk, hydrogenated coconut oil, colour thickeners, and flavours, which contradicted the consumers’ notion of pursuing natural and healthy diets. With the growing health consciousness among young people, “low fat, low calorie and low sugar” have become new consumer values for Generation Z, leading to a greater demand in the market for seeking transparency regarding the ingredients of new tea beverages. Consequently, industry representatives in mainland China recently launched the “Initiative for Transparency of New Tea Beverage Formulas and Product Healthification”, advocating the public disclosure of product formula ingredients and enhancement of product nutrition labelling. The objective is to establish a crucial foundation to foster consumer confidence. |
| | | | Compared to new tea beverages, the transparent tea bags of bagged teas offer a higher visual representation of the ingredients. Due to the minimal processing of the raw materials, and when product brands directly label the ingredients and consumption dates on the packaging, consumers can now see the natural freshness of the ingredients. Additionally, bagged teas are easy to brew and carry, making them perfect for various scenarios such as home, office, training, business travel, and gatherings. For bagged tea brands, they can promote their products based on the preferences and demands in different scenarios. For instance, some companies have launched bagged teas corresponding to diverse scenarios such as “energising breakfast”, “digestion enhancement after meals” and “refreshing afternoon”, positioning as the first batch of brands in the industry to lead bagged tea consumption tailored to different scenarios. Noteworthily, although new tea beverages and bagged teas have gained new momentum in the tea beverage market, their brand value has not yet been able to replace the traditional beverage market dominated by ready-to-drink teas. Therefore, traditional beverages in the form of ready-to-drink teas, continue to hold their own market domain. The sales of ready-to-drink teas are categorised as retail products, mainly sold through supermarkets and convenience stores. According to Euromonitor data, from 2017 to 2022, sugar-free beverages maintained a growth rate of 7.9%. Therefore, to meet the market’s changes, ready-to-drink tea brands also feature in promoting sugar-free beverages. It can be seen that regardless of different tea beverage types in market, the sales are closely tied to consumers’ lifestyle preferences for health and wellness demands. |
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| | Utilising Policy Advantages to Expand the Scale of Tea Beverage Industry Under the “1+4” strategy of appropriate and diversified development, Macao’s big health industry has entered an era focusing on the research and manufacturing of traditional Chinese medicine. In addition to the two state key laboratories of quality research in Chinese medicine, Macao has 341 traditional Chinese medicine service clinics. According to data from Macao’s Statistics and Census Service, in 2021, 40.0% of patients who sought primary healthcare services provided by private clinics chose traditional Chinese medicine, while 30.9% opted for general medicine. This data reflects the trend of society favouring traditional Chinese medicine as primary healthcare services. Indeed, traditional Chinese dietary culture emphasises the dietary habits of “food and medicine share the same function” which is an important way to prevent diseases. Macao, situated in the south China region, has long witnessed a demand for people to “relieve heat”, “clear internal heat” and “reduce throat discomfort.” Compared to using medication to alleviate symptoms, people prefer resolving their physical discomfort by consuming “cooling herbal teas”. Over time, “cooling herbal teas” have gradually evolved into regional healthy beverages. Furthermore, the south China region pays particular attention to seasonal diets, which give rise to people’s various demand for healthy beverages in different seasons. |
| | Traditional healthy teas mainly rely on the manual selection of herbal ingredients and in-store packaging, and their customer base consists mainly of “local neighbours” or “repeat customers”. Nowadays, traditional Chinese medicine dietary therapy is gradually taking a new direction by merging with the beverage industry, tourism industry and the big health industry. Macao’s healthy teas are also capable of catering to the preferences of tourists, thus creating a “Macao brand” of tea beverages. With the Macao SAR government’s specific funding programmes for “Community Economic Tourism Development”, “Food and Culture Promotion” and “Maritime Tourism”, community organisations are encouraged to leverage Macao’s unique tourism resources to organise diverse activities, attracting visitors to explore the areas and increasing their opportunities to encounter shops selling healthy teas or herbal tea stores within the community. In the future, enterprises can target this potential customer base, and also make use of the characteristics of immediate consumption when tourists come to the city and make purchases. They can focus on packaging and product functionality to drive their own development. In addition, the Macao SAR government has set up the Traditional Chinese Medicine Science and Technology Industrial Park of Co-operation between Guangdong and Macao (referred to as the “Chinese Medicine Industrial Park”) that is situated in Guangdong-Macao In-Depth Co-operation Zone in Hengqin, to provide a platform for Macao companies interested in establishing factory production in mainland China for healthy tea beverages. Furthermore, the Chinese Medicine Industrial Park has established co-operation with Portuguese-speaking countries, facilitating the expansion of healthy tea products into markets of those countries. |
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| | Macao as a multicultural city boasts a rich culinary culture. In recent years, a series of healthy beverages combining fresh fruit and tea has gained popularity in the market. Its rise not only satisfies people’s pursuit of taste but also aligns with the popularisation of a healthy lifestyle. The market share of healthy teas has gradually increased along with their unique flavours and health-conscious concepts, making them an essential part of Macao’s beverage market. In this issue, we introduce a company that specialises in offering various products using “mulberry” allowing us draw inspiration behind their brand promotion strategies: |
| What is “mulberry?” Mulberry is a type of tree that holds significant economic and ecological value. Its leaves are used in sericulture to produce silk. Mulberry leaves can also be used to make tea and herbal remedies, offering health and medicinal benefits. The tree bark, fruit, and wood can be utilised in the production of paper, food products, and furniture. |
| Enterprise Profile: The Morus Club This company, named after morus, (the Latin name for the mulberry tree) utilises raw materials such as mulberry leaves and mulberries to create products such as tea bags, fruit juice, and ice cream. Their promotion goes beyond just a cup of tea but also aims to convey a message of health, environmental protection, and well-being through tea culture. |
| | Business Insights: - Considerations Shown Internally and Externally
The Morus Club has its own orchard and revolves its brand concept around the various health benefits of mulberry trees. They have launched a range of products that cater to consumer preferences. The brand operation focuses on packaging design and incorporating the theme of “mulberry tree” to enhance the visual identity of their products, thus amplifying the brand’s promotional impact. It highlights the brand focus from the appearance to the content. - Strengths and Differentiation
Recognising the unique characteristics of their products, the owner of the Morus Club has dedicated their efforts to research and development to maximise the effectiveness of their products. For example, mulberry leaves are a common ingredient in traditional Chinese medicine. Their properties vary depending on the season of harvest, resulting in different efficacy. Hence, the company has focused on improving tea processing techniques to preserve the distinctive aroma of mulberry leaves. They have also been successful in tripling the GABA (Gamma -aminobutyric acid) content during the tea-making process, creating a distinctiveness and competitive advantage for their products to capture market share and increase sales. - Brand Expansion by Incorporating “Mulberry” into Daily Life
When it comes to brand expansion, the Morus Club considers four key aspects: 1) the target audience for tea beverages, 2) the consumption level of the target audience, 3) the consumer interest in the big health, and 4) the demand for big health products from buyers. Moreover, the company enhances market exposure by participating in various conventions, carnivals, and food festivals. - Increasing Sales Channels for Expanding Brand Effects
The Morus Club is currently considering the establishment of a co-operative pick-up shop in Taipa and exploring partnerships with online delivery platforms as well as other online platforms. By collaborating with various small and medium-sized enterprises (SMEs), they aim to secure orders and resources while expanding overseas sales channels. This approach brings them closer to consumers, fosters interaction, and generates customers’ interest in their brand.
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| | The Morus Club expands business opportunities by participating in the MICE platform provided by the Macao Trade and Investment Promotion Institute (IPIM). For more information about MICE in Macao, please visit: |
| | For more information on expanding business opportunities, please access IPIM’s “Online Business Matching Service Platform.” |
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| | The China Chain Store & Franchise Association’s New Tea Beverage Committee, in collaboration with Meituan’s New Catering Research Institute, released the 2023 New Tea Beverage Research Report. The report indicated that the market size of the new tea beverage consumption in 2023 could potentially reach RMB149.8 billion. By 2025, it is projected to further expand to RMB201.5 billion in the mainland consumer market. Under this trend, the tea beverage industry in Macao has also experienced continuous expansion in terms of form and scale in recent years. As an international city with diverse cultural backgrounds and dietary habits, Macao has witnessed the significant surge in the popularity of healthy tea beverages. Healthy tea beverages are formulated with natural ingredients such as herbs, plants, and fruit, known for their health and wellness benefits. The rise of the healthy tea beverage market in Macao is primarily attributed to people’s pursuit of a healthy lifestyle and their focus on natural foods. There is a rising awareness among the general public in Macao to maintain a healthy and balanced body, and they seek out natural beverages to fulfil this demand. In the midst of the wellness trend, restaurants and tea houses in Macao have introduced various options of healthy tea beverages to meet consumer demand. This also enhances the unique appeal of Macao as a destination for tourists seeking an “authentic culinary experience + wellness trend.” Consequently, this trend has injected new energy into Macao’s food and beverage industry and tourism sector. Additionally, due to the convergence of diverse cultures in Macao, the healthy tea beverage market in Macao possesses certain competitive advantages over neighbouring regions in terms of high quality, diverse choices, and cultural experiences. |
| Enterprise Name: Macao Seng Tak International Limited User of the Investor’s “One-stop” Service and its Investment Committee’s cross-departmental co-operation mechanism Service Content: Comprehensive follow-up, including enterprise establishment, organisation of ex-ante technical meetings, and licence application procedures. Successfully obtained the Industrial Licence issued by the Economic and Technological Development Bureau, and now officially in operation. |
| | In recent years, Macao Seng Tak International Limited has shown confidence in Macao’s healthy tea beverage market. Alongside their endeavours to establish a new Macao alcohol brand, they have expanded their production lines and dedicated themselves to researching healthy tea beverage products. They have opened a factory spanning approximately 2,200 square feet to produce healthy tea bagged drinks. They have developed eight varieties of essence-packed healthy tea bags, ranging from spleen-nourishing and stomach-strengthening tea, qi-boosting and blood-supplementing tea, to mind-refreshing and pulse-relieving tea. |
| | For more information, visit the IPIM Services |
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Macao Trade and Investment Promotion Institute Address: 1/F and 2/F of the office building of the Complex of Commerce and Trade Co-operation Platform for China and Portuguese-speaking Countries in Rua Sul de Entre Lagos, Macao Website: https://www.ipim.gov.mo E-mail: ipim@ipim.gov.mo Tele: (853) 2871 0300 Fax: (853) 2859 0309 © copyright 2023 IPIM.All rights reserved (Disclaimer) If you want to stop receiving these emails, please click here to unsubscribe. |
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