China is widely regarded as the birthplace of tea and remains the largest producer and consumer of tea in the world. The Chinese tea industry plays a significant role in both the domestic economy and global trade, contributing to the country’s rich cultural heritage and its agricultural sector. In 2023, the Chinese tea industry was valued at approximately $50 billion, with tea consumption per capita in China being among the highest in the world. The country’s tea market is diverse, encompassing a range of tea types, including green tea, black tea, oolong tea, white tea, and herbal teas.

The tea industry in China is deeply ingrained in the country’s social fabric, with tea being an essential part of daily life, cultural practices, and traditional medicine. The industry is also an important export sector, with China being the largest exporter of tea globally, supplying a variety of high-quality teas to markets around the world.

This report provides an in-depth look at the structure of the Chinese tea industry, market trends, key drivers, consumer behavior, and future prospects.

Key Drivers of Growth in the Tea Industry

Large Consumer Base and Tea Culture

One of the primary factors driving the growth of the tea industry in China is the sheer size of the population, with over 1.4 billion people. Tea consumption in China is deeply embedded in the country’s culture and history. Tea drinking is a daily ritual for many Chinese families and is also an integral part of social interactions, business meetings, and ceremonial events.

In 2023, approximately 80% of the Chinese population consumed tea, and the demand for tea remains robust across various demographic groups. As consumers increasingly turn to healthier alternatives to sugary drinks, tea, especially green tea and herbal varieties, continues to be a popular choice.

Health and Wellness Trends

The growing awareness of the health benefits of tea has significantly contributed to the industry’s growth. Green tea, in particular, has gained popularity due to its association with a variety of health benefits, including antioxidant properties, weight loss benefits, and its role in improving metabolism. The organic tea segment, which focuses on sustainably grown tea leaves free from pesticides and chemicals, has also seen growth, with consumers becoming more health-conscious and environmentally aware.

In 2023, health-conscious consumers accounted for over 30% of total tea sales in China. The rise of organic, herbal, and specialty teas has provided a significant market opportunity for local and international tea brands alike.

Government Support and Regulation

The Chinese government plays a pivotal role in supporting the tea industry, both through policies and regulations that encourage the growth of tea production and exports. The Ministry of Agriculture and Rural Affairs oversees tea production and ensures quality standards are met. The government has introduced various policies to improve the sustainability and efficiency of tea farming, as well as to protect and promote China’s tea heritage.

Additionally, the China Tea Marketing Association works to promote the international trade of Chinese tea and help domestic producers reach global markets. Government investments in infrastructure, farming technologies, and export incentives have also contributed to the growth of the industry.

E-Commerce and Digital Transformation

E-commerce has become an increasingly important distribution channel for tea in China. Platforms like Tmall, JD.com, and Pinduoduo are central to the growth of tea sales, as consumers increasingly prefer the convenience of online shopping. The rise of digital marketing, live-streaming sales, and social media platforms like WeChat has allowed tea brands to connect directly with consumers, further boosting the market.

In 2023, online sales accounted for over 20% of total tea sales in China. The ease of purchasing premium teas, alongside the rise of specialized subscription services for loose-leaf and rare teas, has led to an expansion of the digital tea market.

Market Segments in the Tea Industry

Green Tea

Green tea is the most widely consumed and produced type of tea in China. It accounts for approximately 60% of the country’s total tea production. Green tea is known for its health benefits, particularly its high levels of antioxidants and polyphenols. Some of the most famous green tea varieties from China include Longjing (Dragon Well), Biluochun, and Maojian.

Popular Green Tea Varieties

• Longjing (Dragon Well): This tea is one of the most famous green teas in China, known for its sweet, delicate flavor and high quality. It is grown primarily in the Hangzhou region.
• Biluochun: Grown in the Jiangsu province, Biluochun is a high-quality green tea with a light, floral taste.
• Maojian: Another high-quality green tea, Maojian is grown in the Hubei region and has a stronger, more robust flavor profile.

In 2023, green tea accounted for over 40% of China’s total tea exports, particularly in the form of loose-leaf tea and teabags.

Black Tea

Black tea, known locally as hong cha, is the second most popular tea in China, accounting for 20% of the total tea market. It is produced through a process that involves oxidizing the leaves, giving it a darker color and stronger flavor compared to green tea. Black tea is especially popular in southern China and is commonly consumed both domestically and for export.

Famous Black Tea Varieties

• Keemun: A highly prized black tea from the Anhui province, known for its smooth, malty flavor.
• Yunnan Black Tea: Often rich and full-bodied, Yunnan black tea has a unique flavor profile and is highly regarded in both China and international markets.
• Lapsang Souchong: Known for its distinctive smoky flavor, this black tea is grown in the Fujian province.

The black tea market in China continues to expand, especially as younger generations increasingly experiment with different types of teas and their preparation.

Oolong Tea

Oolong tea is a traditional Chinese tea that is partially fermented, lying somewhere between green tea and black tea in terms of flavor and oxidation. It is particularly popular in southern China, where it accounts for approximately 10% of total tea consumption.

Popular Oolong Tea Varieties

• Tieguanyin: One of the most famous oolong teas in China, Tieguanyin is grown primarily in the Fujian province and has a rich, floral taste.
• Da Hong Pao: Known for its robust flavor, Da Hong Pao is considered a premium oolong tea and is highly sought after by collectors.

Oolong tea is often associated with tea culture in teahouses and is a favorite among those who appreciate a more complex tea flavor profile.

White Tea

White tea is a delicate tea made from young tea leaves and buds, with minimal processing. It accounts for about 5-6% of the total tea market in China. White tea is known for its light, subtle taste and is prized for its health benefits, particularly its antioxidant properties.

Popular White Tea Varieties

• Bai Mudan (White Peony): Grown primarily in the Fujian province, Bai Mudan has a mild, slightly sweet flavor.
• Silver Needle (Bai Hao Yinzhen): Known as one of the highest-quality white teas, Silver Needle is made from young buds and has a delicate, floral taste.

White tea is growing in popularity both domestically and internationally, particularly in health-conscious markets where its health benefits are well-recognized.

Herbal Teas and Other Specialty Teas

Herbal teas, including chrysanthemum tea, jasmine tea, and lotus leaf tea, have become increasingly popular in China due to their perceived health benefits. These teas are typically made by infusing flowers, fruits, or herbs with hot water and are often consumed for medicinal purposes or relaxation.

Popular Herbal Teas

• Chrysanthemum Tea: Known for its cooling properties, this tea is commonly consumed in China to relieve heat and reduce inflammation.
• Jasmine Tea: A green tea or white tea base is flavored with jasmine flowers, offering a fragrant, aromatic tea that is widely consumed in China.
• Lotus Leaf Tea: Consumed for its potential benefits in weight loss and digestion, this tea is made by steeping lotus leaves in hot water.

These specialty teas are typically sold in teabags or loose-leaf form, and they often target the health-conscious consumer.

Export Market and Global Trade

China is the largest exporter of tea globally, with over 30% of its total tea production exported to international markets. In 2023, China’s tea exports were valued at approximately $7 billion, with major markets including the United States, Russia, Pakistan, the United Kingdom, and African countries.

Key Export Destinations

• United States: The U.S. remains a major consumer of Chinese tea, particularly green tea. In 2023, the U.S. accounted for about 20% of China’s total tea exports.
• Russia: Russia is one of China’s largest markets for black tea, with demand continuing to grow in recent years.
• UK and European Union: The UK is a significant importer of Chinese tea, particularly green tea and oolong tea. The EU also remains a strong market for Chinese tea, especially in the form of specialty and herbal teas.

Chinese tea exporters are increasingly looking to expand their presence in these international markets by promoting higher-quality products and developing sustainable practices.

Major Players in China’s Tea Industry

China National Tea Corporation (CNTC)

China National Tea Corporation (CNTC) is the largest state-owned enterprise in China’s tea industry. CNTC manages the production, marketing, and export of a wide variety of teas and has a significant role in both domestic and international trade. The corporation’s brands, such as Longjing Tea and Zhenghe Tea, are among the most recognized names in China’s tea market.

Zhejiang Tea Group

Zhejiang Tea Group is one of the largest tea producers in China, with a strong focus on high-quality green tea and green tea derivatives. The company’s flagship product, Longjing (Dragon Well) Tea, is among the most popular green teas in both China and abroad.

Tenfu Tea

Tenfu Tea is a major player in China’s tea industry, known for its retail chain and focus on high-end tea products. The company operates more than 1,000 stores across China and has a growing presence in international markets. Tenfu Tea offers a variety of premium teas, including green tea, black tea, and oolong tea.

Lipton (Unilever)

Lipton, owned by Unilever, is one of the largest international tea brands in China. It primarily offers packaged black tea, green tea, and herbal tea. Lipton has expanded its presence in China through its focus on ready-to-drink tea products, which appeal to younger consumers.

Twinings

Twinings, a British tea brand, has established a strong presence in China through its premium teas. Known for its high-quality black tea and green tea, Twinings is a popular brand among Chinese consumers looking for international tea products.

Future Outlook for the Tea Industry in China

Expansion of Premium and Organic Teas

The demand for premium and organic teas is expected to grow in China as consumers become more health-conscious and willing to pay a premium for high-quality products. Organic teas, especially those grown without pesticides and chemicals, are increasingly seen as healthier and more sustainable options.

Digital and E-Commerce Growth

With the growing influence of e-commerce and digital platforms, online sales of tea will continue to rise. Brands will increasingly invest in digital marketing, social media campaigns, and live-streaming sales events to reach younger, tech-savvy consumers. E-commerce platforms such as Tmall and JD.com will remain important drivers of sales, particularly for premium and niche tea products.

Increased Focus on Sustainability

As sustainability becomes a key concern for Chinese consumers, the tea industry is likely to focus more on eco-friendly production methods and packaging. The growing demand for sustainable and ethically sourced tea products will shape the market in the coming years, as both domestic and international companies seek to meet these consumer preferences.