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

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

In recent years, the tea industry (mainly referring to Yunnan tea, especially Pu'er tea, same below) has shown a declining trend. Traditional tea enterprises, tea shops, tea houses, clubs, tea-focused individuals, and tea farmers have all seen significant declines in performance, with some even going half a year without a sale. A few years ago, several tea markets in Kunming had shops in high demand, with transfer fees reaching hundreds of thousands of yuan. 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 seen fifteen years ago. People often ask me how things are going. I am now formally stating publicly: in one word, it's "miserable"! It's a miracle I haven't defaulted on my debts. An empty stomach doesn't hinder thinking, so I write this article.

There are many reasons for this: the severe overall economic situation, the excessive bubble in the tea industry in the past, several plunders by financial tea, the rise of live streaming... There are many reasons, but I believe one important reason is the arrival of the era of broad traffic. This is unrelated to the economic situation or the disorderly development of the tea industry; it is an inevitable stage as the tea industry moves from a niche market to a mass market. As I look ahead with an empty stomach, the future of the tea industry is certainly 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; for the sake of the narrative, I will briefly outline it, without strict rigor. If you are a stickler for accuracy, please stop reading.

Since the 1990s, Pu'er tea began to rise, and Yunnan tea was no longer dominated by black and green teas. Over the past thirty-plus years, production and marketing have been led by industry practitioners, with an emphasis on seniority. However, no matter how famous one becomes, they cannot break out of the circle. Consumers are mainly professional tea enthusiasts. With the rise of numerous famous mountains and an increasingly fragmented mountain culture, if you don't study for a while, you won't even know many places.

Take Mansong as an example: almost all its stories are fabricated, but that doesn't stop Mansong tea from thriving. The fake tribute tea culture has openly entered corporate culture and tea mountain history. With the push from unscrupulous authors, Mansong tea prices skyrocketed. In just over a decade, even small-tree tea rose to several thousand yuan per kilogram, and ancient tree Mansong tea soared to tens of thousands. The rise of mountain areas and soaring prices left many practitioners and professional tea enthusiasts astonished. During this period, Mansong tea was traded within professional circles; those making and selling tea were all professionals. Mansong tea farmers also abandoned other slower-income activities, becoming true "tea farmers" relying solely on tea. Consumers were either persuaded by merchants, recommended by friends, or were professional tea enthusiasts who had some knowledge or had specifically studied Mansong tea.

Mansong is like this, as are Laobanzhang and other tea mountains. Mid-to-high-end tea is consumed within relatively closed circles.

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

Large tea factories typically sell in this way: the factory is responsible for raw tea, while distributors, including factory direct-sale points, handle sales. Some are responsible for warehousing and storage, forming scale advantages for wholesale or waiting for price increases before selling. 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 engage if fooled or insane.

Other tea factories mostly follow this model. The tea is either sold or kept in inventory at the factory or channels, with relatively professional practitioners.

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 in Pu'er tea, learning tea history has been a history of blood and tears. To understand tea, I've bought countless junk teas, falling for a different scam every day.

Fervent Pu'er tea enthusiasts should deeply resonate with this. Fake ancient tree tea, fake famous mountain tea, fake brand tea, fake spring tea, fake aged tea... Let's put it this way: most of the middle-aged and older Pu'er teas sold in live streams now are fake aged 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 falsely marketed as Laobanzhang ancient tree tea is tens of thousands of tons. How can consumers choose?

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

This is the opportunity for broad traffic!

3. The Rise of Broad Traffic.

With the rise of Douyin, Kuaishou, and WeChat Channels, the golden era of broad 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 high traffic, you can sell explosively.

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

A large amount of broad traffic and the non-standardized tea industry have made Yunnan tea the main battlefield for live streaming. There are probably few internet celebrities who haven't sold Yunnan tea.

Let me share some imprecise data. From the 1990s to 2020, the number of Pu'er tea consumers was 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 broad 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. Broad traffic has taken our market share. What should we do?

1. Embrace broad traffic.

This goes without saying: make yourself popular, generate traffic. Persona is crafted, and stories are more attractive. I'm not good at this, so I won't elaborate.

1. Become more professional.

Focus on your main battlefield, become more professional, and use depth to win a chance for survival.

Tea makers should focus on raw materials and craftsmanship to make better tea. 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 plays multiple roles: making tea, warehousing, explaining tea, taking photos, live streaming, and finally selling and shipping.

Wholesalers should focus on cost-effectiveness and storage; those dealing with famous mountains should 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 entire tea industry is in chaos, but live streaming still makes a fortune? There will definitely be an orderly stage suitable for traditional practitioners, but the key is whether you are still around then. Perhaps 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 internet celebrity. This requires a certain amount of cash support.

Survival is the only thing that matters.

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.