Introduction:Did you know? Guangdong is not only a province with a rich tea culture, but it has now also reclaimed the title of the nation’s top consumer of milk tea. From the salty butter milk tea of the Mongolian Plateau to Hong Kong-style "silk stocking" milk tea, and on to today’s diverse array of modern tea beverages, a single cup of milk tea reflects the evolution of millennia-old dietary cultures. This article takes you on a journey exploring how milk tea transformed from a daily drink of frontier herders into a multi-billion-dollar consumer market, while also analyzing regional tea-drinking habits and the current state of the industry chain.
Milk tea has once again become the center of attention, this time because Guangdong has secured the top spot in national milk tea consumption by sheer strength. The latest spring report from Alipay shows that as temperatures rise, overall milk tea consumption has increased by about 10%, with particularly notable growth among middle-aged and elderly users placing online orders—an astonishing 25%. In terms of regional distribution, southern provinces and cities occupy eight of the top ten spots in milk tea consumption, with Guangdong firmly in the lead. Its per capita consumption far exceeds that of the northeastern regions, averaging about 2.5 more cups per week.
It’s worth noting that milk tea has long broken free of its image as a drink exclusive to the young, becoming a leisure beverage enjoyed across generations. On the streets of Guangdong, the density of milk tea shops often astonishes visitors, with many locals joking that they could sample a different flavor every day of the week without repetition. Last year’s viral topic “The First Cup of Milk Tea in Autumn” made a comeback this spring in a “Spring Limited” edition, once again sparking heated discussions on social media, with related hashtags quickly surpassing 100 million views.
Looking back at the history of milk tea, its earliest form can be traced back to the salty butter milk tea of ancient Mongolian nomadic tribes, which primarily served as a nutritious beverage to replenish energy and warmth in high-altitude regions. With the trade along the Silk Road, the sweet milk tea preparation methods of the Middle East gradually made their way in, blending with local dietary cultures to give rise to a diverse array of styles. By the modern era, Hong Kong and Taiwan had respectively developed their own distinctive “silk stocking milk tea” and “bubble milk tea,” laying the groundwork for the later new tea beverage revolution.
Stepping into the 21st century, the new tea beverage industry experienced explosive growth, with even major players in the foodservice industry like Haidilao joining the fray by launching dedicated milk tea outlets. According to industry research data, the new tea beverage sector attracted over 4 billion RMB in investment in 2020. From high-end brands like HEY TEA and Nayuki, to more affordable options like Mixue and Guming, capital has flowed into all market segments. Market research firm CBNDATA noted that the new tea beverage market approached 100 billion RMB in 2019, with a compound annual growth rate of 48.75% between 2017 and 2019, and is projected to surpass 110 billion RMB by 2021.
Looking at consumer demographics, the post-90s and post-00s generations make up the main force of the new tea beverage market, accounting for the vast majority of market share. In terms of market structure, in 2019, tea-based drinks—including traditional milk tea—accounted for 57% of China’s freshly prepared tea beverage market, far exceeding coffee at 35% and other types of beverages. In first-tier cities, milk tea shops sell an average of about 100 cups per day, in second-tier cities around 60 cups, and in third-, fourth-, and fifth-tier cities approximately 40 cups, showing clear regional differences in consumption.
In terms of pricing strategy, commercially available milk tea can generally be divided into four tiers: premium products priced starting from 30 RMB, represented by HEY TEA and Nayuki; mid-range options between 16 and 20 RMB, including brands like Cha Yan Yue Se and Cha Bai Dao; mass-market choices concentrated between 10 and 16 RMB, such as chain stores like HeyTea (One Cup) and Guming; and budget-friendly series under 10 RMB, with Yihe Hall and Mixue enjoying widespread popularity due to their high cost-performance ratio. It’s worth noting that there are significant differences in ingredient ratios, production techniques, and marketing strategies across these different price segments.
Competition in the downstream of the industry chain is equally fierce. Take Nayuki, for example, a high-end freshly prepared tea beverage brand where nearly half of its orders in the first nine months of 2020 came from its membership system, highlighting strong user loyalty. Public data shows that if the brand successfully lists on the Hong Kong stock market, it will become the first publicly traded new tea beverage company. Looking at the overall trend, with consumption upgrading and product innovation, the tea beverage market still holds considerable growth potential, but consumers should also be mindful of moderate consumption to avoid excessive intake of sugar and caffeine.
The above content is compiled by CoffeeHunters, a coffee news website.
