Chinese Art Collector Buys 35 Million USD The Wine Cup (Meiyintang), But Sips Tea

chinese ming dynasty art collector

Liu Yiqian, a Chinese multimillionaire, recently bought a 35 million USD wine cup from the Ming Dynasty, but got in trouble online by showing a picture of himself sipping tea out of it. This is what the rich art collector said: “Emperor Qianlong of the Ming Dynasty has used it, now I’ve used it” and  “I just wanted to see how it felt.” The cup, he added, “isn’t a commercial product appropriate for the masses.”

On Weibo, a Chinese social media site, Chinese art lovers and people in the lower classes of society are furious:

“You think you can drink it and become immortal?”

“In fact, isn’t it just a way to satisfy your vanity?”

The reason of all this rage is because this ‘chicken cup’ (also known as ‘Mei Yin Tang’) probably the most celebrated porcelain in Chinese history and there are only 17 left in the world. See the tea cup in the below image. It’s delicately crafted with flawless translucent sides flaring out from the countersunk base to a subtly everted rim. The outside is painted in faint outlines of cobalt blue under the glaze and picked out in overglaze enamels of yellow, green, light and dark olive green. In addition, two tones of iron red is used with a lively continuous scene of a red rooster and his golden hen out in a garden with their chicks. One side of the cup depicting the rooster with his head turned back to see the hen pecking at a red-winged insect on the ground.

chicken cup meiyintang

chicken cup

China High-End Tea Prices In Decline, Chinese Tea Shops Changing Strategies

China’s Tea Industry Association released information regarding the Chinese market for high end teas. The prospects are not positive as upscale tea sales have declined anywhere between 10 to 50%. Especially provinces who are famous for producing black suffered the most. Besides black tea, the famous Xinyang Maojian as well as high-end Tie Guan Yin are in decline.

The only two tea categories that are on the rise are white teas from Fuding as well as Pu’er teas from Yunnan.

Due to the above trends, tea shops in China are slowly adjusting their strategies, which include the following:

  1. Spend less on expensive packaging
  2. Sell smaller portions when it comes to high-end tea
  3. Offer more value for money assortment.

The Hubei Lu Yu Tea Culture Research Association also confirms that the luxury market is in decline in Hubei. Given the high operating cost, the this market segment is challenging to be in. Meanwhile, the association also reports that low-end teas (below 100 RMB/15USD per KG) is showing a steady but slow rise in prices.

Sources:

http://hb.ifeng.com/news/cjgc/detail_2014_07/10/2568653_0.shtml

http://news.163.com/14/0710/06/A0P8A9HA00014Q4P.html

Global Starbucks Succeeds In Tea Oriented China By Adopting Local Strategies

Though we recently discussed the decline and exit of Nestea (a Coca Cola & Nestle Joint Venture) in China, Starbucks continues to sell the average cup of coffee above for 5 USD in China with high volume. With about 1100 stores the American coffee chain has achieved its last year’s target and has become the market leader in the coffee industry in China with another 400 stores opening by the end of 2015. This year it will shift its focus from central locations to expanding into local communities. According to the chain, employees will start promoting the brand by building connections with local communities, by being part of local projects and organizing volunteering activities.

“It’s a market where we continue to see traction around the Starbucks experience, and there are a number of things that are helping demographically and environmentally for Starbucks in China,” Mr. Maw said during a June 11 presentation at the William Blair Growth Stock Conference.

starbucks in china

The growing middle class in China and the enthusiasm for the coffee culture are one of the main factors for Starbucks success. But that’s not it. The American firm is doing a great job to tailor its offerings to the local needs. Take for instance the recent Starbucks frozen dumpling offerings that has caught much attention in China, which is proof that the coffee chain is listening to its customers. Dumplings are traditional Chinese snacks.

Besides it’s drinks and sweets, Starbucks adjusting it’s employee policies. The coffee giant is redefining what it means to be family-friendly. As families play a tremendous role in life and career choices in China, Starbucks is including the family members in the career conversations by organizing a Partner Family Forum. This indeed proofs that a company with its own strong flavor of corporate culture is tweaking it to fit China’s work life customs, which incorporate the family.

starbucks fuzhou

Though all the news above is good, we do need to mention that there is one product line that’s not selling well: Tea. The coffee chain hasn’t succeeded until today to attract Chinese tea lovers to it’s stores. Starbucks, offerings are awkward to the Chinese who are confused about what Starbucks tea stands for. To succeed, the chain has to focus on creating a tea line that looks more foreign, or it will face a similar fate as Nestea.

starbucks tea in china

NesTea: Coca Cola’s and Nestle’s Defeated In China’s Competive Ice Tea Market

With the Chinese middle class become more and more wealthy in large Chinese cities such as Beijing, Shanghai, Guangzhou and Shenzhen, many multinationals are entering the Chinese market. While big success has been recorded in the sales of foreign goods such as cheese, wine, and milk, this is not the case for tea.

According to the China Daily, it’s hard for foreign companies to enter very localized markets:

The exit of Nestea, an iced tea beverage from the world’s largest food and beverage company Nestle SA, shows the challenges faced by international food and beverage companies trying to compete in a highly localized category.

chinese nestea

This is completely true. One of the successful western companies that entered China is KFC, but to do that KFC had to offer bubble tea, 1000 year old fermented egg porridge and rice meals besides their Colonel’s Chicken snacks. KFC managed to succeed by hiring a talented pool of local Chinese managers and executives to get the job done.

kfc porridge

This case reminds me of Starbucks that is expanding fast in many countries over the world (including China) with success, except for Italy, the country where the Coffee culture started.

starbucks china logo

When it comes to Ice Tea, the branding matters the most. Taste is a challenge but can be tested through tasting sessions. The big questions is, how do you get into the mind of the customer and allow them to identify their lifestyle with your brand? After all, tea lovers believe that the tea they drink says something about you. The lesson learned here is that for foreign companies to succeed in any localized market is to listen to the customer and either hire local staff to absorb awareness of local needs or to acquire a local company (or start a joint venture).

Tea Tourism is Taking Off

Though tea travel has always been popular in China as regions such as Yunnan and the West Lake are attracting many national visitors, now more tea pilgrimages are made by foreign tea lovers. As reported by Smithsonian.com tea travel has become popular among the geek tea lovers. There is a difference though:

while Chinese visitors were interested in relaxing and tasting teas, tourists from outside of China were more drawn to the production side of things—they want to hike through the plantations where the tea is grown and pick some for themselves.

Due to development many China tea guides are being published. For instance the recent publication by Fiona Reilly, reported of CNN, is detailed and accurate. Here’s one of her observations:

Now, a small but growing band of tea aficionados is traveling across the country in pursuit of tea at its source, fueled by an appreciation of China’s ancient tea culture and traditions and a more modern interest in green methods of cultivation and artisanal production.

This recent development is definitely spurred by many tea festivals that are organized worldwide, such as in Canada and Vietnam. Here’s a list of world wide tea festivals for those who are interested. Tea festivals are great occasion for tea drinkers to really get into the culture of tea by watching how tea is steeped and tasting all the different varieties. More and more tea drinkers will become tea lovers and some of the tea lovers will decide to visit the source in China.