Herbal Tea Industry Overview in China

Aug, 01, 2016, Mumbai, India: Market Reports on China presents the report, on “Herbal Tea Industry Overview in China, 2011-2020”. Herbal tea covers Chinese restaurants, large scale supermarkets and convenience stores at present.

Herbal tea is a generic name of beverages made from certain traditional Chinese herbal plants. Allegedly, it has functions like relieving summer-heat for consumers. On May 20, 2006, herbal tea was included in the first batch of state-level intangible cultural heritages by the State Council of China.

Herbal tea has a history of over 20 years while its market scale was less than CNY 1 billion in China before 2003. During 2003 to 2004, JDB group increased its investment in the publicity of herbal tea in red cans, which stimulated the explosive growth in the sales revenue of the herbal tea industry. According to the CAGR of the sales revenue of the herbal tea market was over 50% in China from 2003 to 2011. The growth rate of the herbal tea market size slowed down exceeding CNY 50 billion while the CAGR remained about 20% in China from 2011 to 2015.

According to the herbal tea industry is monopolistic in China. JDB and Wong Lo Kat accounted for about 80% of the market shares in China herbal tea in 2015, while a fraction of the rest was occupied by other enterprises. The number of herbal tea manufacturers is hundreds nationwide, but major brands familiar to Chinese consumers are JDB and Wong Lo Kat. Therefore, the barriers to entry in this industry are relatively high for new entrants. The competition between JDB and Wong Lo Kat is intense with a series of legal disputes.

Consumers from Guangdong Province as well as its nearby areas are the most powerful in the herbal tea market in China. Major functions of herbal tea are advertised as cooling and removing summer-heat, and they are accepted by consumers. The nationwide demand for herbal tea is relatively large of those frequent visitors to fried food, barbecue and hot pot. Many...