The Crisis and Opportunity Brought by General Traffic to the Tea Industry

This is the thirty-fourth article in my "Tea Talk on Paper" series. Click to read more articles from the series.

In recent years, the tea industry (mainly referring to Yunnan tea, especially Pu'er tea, as below) has shown a declining trend. The performance of traditional tea enterprises, tea shops, tea houses, clubs, tea-focused individuals, and tea farmers has mostly decreased significantly, with some even not opening for half a year. A few years ago, it was hard to find a shop in several tea markets in Kunming, and some shops had transfer fees of hundreds of thousands. Now many shops are vacant, and even with lower rents, many remain empty. Prices on tea mountains have also been dropping repeatedly; in some villages in Bulang Mountain, tea prices have fallen to levels of fifteen years ago. People often ask me how things are going. I am formally stating here: in one word, it's "miserable"! It's a miracle that I haven't defaulted on my promises. An empty stomach doesn't affect thinking, so I write this article.

There are many reasons: the severe overall situation, the excessive bubble in the tea industry in the past, several raids by financial tea, the rise of live streaming... Many reasons, but I think one important reason is the arrival of the era of general traffic. This is unrelated to the economic situation or the disorderly development of the tea industry; it is an inevitable stage for the tea industry to move from a niche to the mass market. As I look ahead with an empty stomach, the future of the tea industry is definitely bright, but I fear dying tonight.

1. The Rise of Yunnan Tea: Formation of Professional Circles.

This article will not elaborate on the history of Yunnan tea; it will briefly cover it as needed, without strict rigor. If you are a stickler, please exit.

Since the 1990s, Pu'er tea began to rise, and Yunnan tea was no longer mainly red and green tea. Now, after more than thirty years of development, production and marketing have been dominated by practitioners, emphasizing seniority. But no matter how famous, they cannot break out of the circle. Consumers are mainly professional tea enthusiasts. With the rise of many famous mountains and increasingly smaller mountain cultures, if you don't study for a while, you won't know many places.

Take Mansong as an example: almost all its stories are fictional, but it doesn't affect the thriving business of Mansong tea. The fake tribute tea culture openly enters corporate culture and the history of tea mountains. With the help of some unscrupulous book authors, the price of Mansong tea skyrocketed. In just over a decade, even small-tree tea rose to several thousand yuan per kilogram, and ancient tree tea from Mansong rose to tens of thousands. The rise of mountain areas and soaring prices left many practitioners and professional tea enthusiasts stunned. During this period, Mansong tea was played within professional circles; those who made and sold tea were all professional practitioners. Mansong tea farmers also abandoned other slow-income activities and became true "tea farmers" relying solely on tea. Consumers were either persuaded by merchants, recommended by friends, or were professional tea enthusiasts who had some understanding or even studied Mansong tea specifically.

It's the same for Laobanzhang and other tea mountains. Mid-to-high-end tea is enjoyed within relatively closed circles.

Low-to-mid-end tea is also in professional circles.

The sales methods of large tea factories are mostly like this: the factory is responsible for raw tea, dealers (including factory direct outlets) are responsible for sales, and some are responsible for warehousing, forming scale advantages for wholesale or waiting for price increases to sell. Take Dayi as an example: Dayi has over 2,000 specialty stores nationwide. Dayi produces the tea, and these stores sell it. Of course, Dayi also has an important channel: financial tea. This circle is only played by professionals. Ordinary consumers who don't understand Dayi tea or the rules of financial tea would only play if they were fooled or crazy.

Other tea factories mostly follow this model. These teas are either sold or kept in factory and channel inventory. Practitioners are relatively professional.

2. The World Is Tired of Pu'er Tea.

The disorderly price increases of famous mountains, the endless emergence of small production areas, stories flying everywhere, and ancient tree tea that can never be fully understood—the world is tired of Pu'er tea!

As a senior practitioner of Pu'er tea, learning tea history is a history of blood and tears. To understand tea, I don't know how much garbage tea I've bought. Every day I fall for a different trick.

Feverish fans of Pu'er tea should deeply resonate with this. Fake ancient tree, fake famous mountain, fake brand tea, fake spring tea, fake old tea... Let's say this: most of the middle-aged and old Pu'er teas sold in live streams now are fake old teas produced in recent years.

Take Laobanzhang as an example: the annual output of ancient tree tea in Laobanzhang is less than 30 tons, but the total output of Laobanzhang tea is nearly 1,000 tons, and most of it is sold as ancient tree tea. It is said that the annual output of tea pretending to be Laobanzhang ancient tree tea is tens of thousands of tons. How can consumers choose?

Pu'er tea is a non-standard product. Consumers completely don't understand it. Whoever shouts the loudest or looks like a tea expert can sell tea.

This is the opportunity for general traffic!

3. The Rise of General Traffic.

With the rise of Douyin, Kuaishou, and WeChat Channels, the golden era of general traffic in the tea industry has arrived. Starting around 2020, the main battlefield for tea sales gradually shifted to live streaming, dominated by non-professional circles. As long as you have traffic, you can sell tea. Of course, you can sell not only tea but any product with traffic; with large traffic, you can sell out.

For example, there is a website called China's Search for Relatives Network, which recently announced its closure. The reason for closure is that searching for relatives has become a track: posting search information, gaining attention, and selling goods—what a standard three-step process.

A large amount of general traffic and the non-standardized tea industry have made Yunnan tea the main battlefield for live streaming. There should be few influencers who haven't sold Yunnan tea.

Let me give an imprecise figure. From the 1990s to 2020, Pu'er tea consumers should be around 50 million. But in 2023, live streaming sales of Pu'er tea exceeded 40 billion yuan, with over 200 million purchases. The arrival of the general traffic era has put the Yunnan tea industry on the fast track, moving from a niche market to a mass market.

4. Opportunities for Traditional Practitioners.

The market is a zero-sum game. General traffic has taken our market. What should we do?

1. Embrace general traffic.

No need to elaborate; it's about making yourself popular and getting traffic. Persona is crafted, and stories are more attractive. I'm not good at this, so I won't say much.

1. Become more professional.

Focus on your main battlefield, become more professional, and win a slim chance with depth.

Tea makers focus on raw materials and craftsmanship to make tea taste better. But that's not enough; you also need to tell your story and create professional traffic. This requires strong re-learning ability. In a small circle, you can't have a complete team; often one person holds multiple roles: making tea, warehousing, talking about tea, taking photos, live streaming, and finally selling and shipping.

Wholesalers focus on cost-effectiveness and warehousing; those in famous mountains focus on one or several mountains; tea farmers should stick to their roots, provide good service, and not deceive; tea shop owners must understand the tea they sell, not turn into a general store, but create a distinctive tea shop...

1. Survival is the only choice.

Have you noticed that all traditional tea circles complain about live streamers, and the whole tea industry is a mess, but it doesn't stop live streaming from making a fortune. There will definitely be an orderly stage suitable for traditional practitioners, but the key is whether you are still there. Maybe 80% will die tonight.

Reduce scale, cut costs, and first save before seeking new sources.

Or take a gamble: build a team and make yourself an influencer. This requires a certain amount of cash support.

Survival is the only thing.

5. Final Words.

I've always wanted to write this article. Tea articles won't break out of the circle and rarely get traffic, but I always use what I'm good at. Of course, writing is a summary of a stage and an outline for the next stage of work.