For several years now we have been hearing that the changing economy in China has increased the demand for high-end teas in their domestic market to an extent that we may not be willing or able to compete. On my December trip to Shenzhen, the reality of this became much more clear. To share my observations as examples, I am starting this “Shenzhen Series” with an example of one retail tea shop, Tea York Hub.
It is a high-end retail location in an elegant “tea mall” in the Bao’an District of Shenzhen. The mall hosts dozens of tea businesses, a tea museum, and several special, elegant rooms for enjoying tea. I’ll share more about the mall in another post; but today, I want to focus on this one concept – that there is a domestic market for tea that makes it much less desirable for growers to market their finest teas internationally.
We know that Dragon Well tea is traditionally graded in six levels: Superior is the finest and then there are grades one through five for lesser quality. Grade five is the lowest. This small bag of Xi Hu Long Jing is priced at RMB 4880 and I am assuming that it is “superior”. The current value on the market exchange would be approximately $700 USD.
Considering the rarity of this tea, there is not likely to be a significant volume available to export to what would be a small international market. This may seem like something of an extreme example, and most readers are probably muttering something about no tea being worth that kind of money.
My caution is not that we should be importing these teas and paying these prices, but rather that it will change the market of what will be available. Additionally, there is greater potential for abuse when we see prices rise to these levels. History is filled with stories of ways in which tea was adulterated and marketed to people who did not have the ability to determine the difference in quality or understand the value.
Another huge difference in the market for fine Chinese tea is in packaging. For the two presentations I was asked to give, they requested that I comment on the differences between packaging in the U.S. and China. The simple statement in this regard is that most U.S. tea lovers would rather pay for the tea in functional packaging but not in decorative boxes that generate additional trash. Above is one example of packaging for a dark, compressed tea that is certainly functional (preserving the quality of the tea) but excessive by our packaging standards. Notice that the price on this gift set is RMB 688 ($98 USD). Each ball of tea is individually wrapped, nestled in a small metal canister fitted with a plastic shield over the top of the tea ball. The outer box is very elegant, fitted with a frame to hold each canister.
Calculating my bit of tea math, I am assuming that each ball of tea would infuse at least 10-15 times. Generously assuming 15 infusions, this box of tea has the potential for 90 infusions. That would price each infusion at $1 USD per pot.
Does this help with the sticker shock?
Have I Piqued Your Interest?
Some of the additional posts in this series will include experiences from the annual Tea Science & Technology Conference, the One Belt, One Road Forum and the amazing Global Tea Fair. I invite your comments and questions and hope that we can begin a lively exchange of industry news.
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