---
title: "Surge 156% in Tea Bags, Yet They Look Increasingly Alike"
description: "The Chinese tea bag market is booming, with online sales expected to surge 156% in 2020, but products are becoming increasingly homogeneous. This article explores the reasons behind this trend and suggests opportunities for differentiation, such as targeting specific consumer segments, emphasizing functionality, and embracing cultural trends."
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published: "2021-04-04"
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# Surge 156% in Tea Bags, Yet They Look Increasingly Alike

> The Chinese tea bag market is booming, with online sales expected to surge 156% in 2020, but products are becoming increasingly homogeneous. This article explores the reasons behind this trend and suggests opportunities for differentiation, such as targeting specific consumer segments, emphasizing functionality, and embracing cultural trends.

Have you noticed that tea bags are starting to look more and more alike? Naixue's 'One Week of Good Tea' and Heytea's 'One Week Tea' gift boxes both come in packs of seven, emphasize daily tea drinking habits, and feature similar flavors like peach oolong, which is becoming a standard. On Xiaohongshu, bloggers have compiled common tea bags by type, enough to overwhelm anyone with choice anxiety. From packaging style to ingredients to product names, these products are hard to tell apart. Data shows that from 2015's 230 million yuan to 2019's 5.03 billion yuan, the online tea bag market in China has grown rapidly. In 2020, it's expected to reach 12.87 billion yuan, a 156% increase. In this promising market, tea bags are looking increasingly similar. What development opportunities remain? This article will explore.

**-01- Why Are Tea Bags Looking More Alike?**
Last September, Xiaoguancha incubated a sub-brand 'Chaxiaohu' focusing on tea bags with zero sugar, zero calories, and zero additives. In November, CHALI, a tea bag brand that has sold 300 million bags in six years with daily sales exceeding 500,000 bags, completed a hundred-million-yuan financing round. New brands like Chaxiaokong and Yibaoshenghuo also made the Tmall new brand list. CHALI Peach Oolong
Tea bags are loved for their convenience, and the pandemic home-stay scenario, along with the growth of 'lazy homebodies,' has fueled this track. Live streaming and lifestyle bloggers have added a trendy halo. In Li Jiaqi's live stream, CHALI Peach Oolong sold 60,000 orders in two hours. On this seemingly bright track, tea bags are looking more alike. In packaging, square filter bags, pastel colors, and brand names and logos printed in the center seem to be the 'three tricks' of tea bag packaging.
Tea bag packaging
Many foreign surveys indicate that consumers are sensitive to tea bag shapes, and unique shapes can boost purchase interest. Unfortunately, most tea bags available are triangular, with few creative shapes. Heytea's hanging ear tea bags and Chabiubiu's DIY packaging are considered creative. DIY packaging
The contents are also similar. Searching 'peach oolong tea bag' on Tmall yields 15 pages and 841 products. Peach or grape with oolong tea seems to have become synonymous with tea bags. Many peach oolong products
So why are tea bags looking more alike? **1. Supply chain constraints** An industry insider shared: 'The entry barrier for tea is not high. Many newcomers lack deep supply chain experience, so they lack independent R&D capabilities and mostly copy others. They also lack the ability to optimize taste, leading to similar products.' This is why tea bags look alike, not just in packaging but also in product.
**2. Ingredient limitations** Tea is hard to innovate. Single-origin natural teas are criticized for being monotonous, and blended or flavored teas struggle to break through in taste. For example, in the popular peach oolong, the tea base already has a peach flavor, making it hard for other fruit and flower flavors to stand out. Additionally, tea taste is affected by brewing time, water temperature, and water amount, but if consumers strictly follow recommended brewing methods, it defeats the convenience of tea bags.
**3. Marketing lacks soul** Many tea bag brands show blindness in production and sales, lacking unique brand personality and sustainable traffic generation. Everyone emphasizes 'convenience' and 'suitable for young people,' falling into a trap of uniformity. Moreover, to cater to the market and channels, brands fail to lead new consumption trends and instead are led by them. For example, when peach oolong became a Tmall hot word, a 'peach oolong trend' swept the tea industry, with every brand launching peach oolong, and even if there are differences, consumers can hardly perceive them.

**-02- Five Consumer Concerns May Hold the Key to Breaking Homogeneity**
Perhaps the answers lie in the questions. Data on China's tea bag industry development issues in H1 2020 shows that consumers have perceived some problems. Tea bag development issues
So, how to solve these problems? We've selected some cases for discussion. First, 42.5% of consumers think 'tea quality is poor.' According to iiMedia Research, the quality of Chinese tea bags has improved significantly, but many consumers still have a stereotype of 'poor quality.' This impression is not about the tea bags themselves but stems from our tea culture. Chinese tea selection emphasizes single buds and leaves, and watching the leaves unfurl in water is an aesthetic pleasure. Tea bags filled with CTC tea (crushed, torn, and curled tea powder) are seen by tea culture enthusiasts as losing the soul of brewing and raising doubts about quality. Tea bag brands are improving products. For example, CHALI's red bean and coix seed tea clearly shows the grains through the bag, what you see is what you get. CHALI red bean and coix seed tea
Health tea brand T FUN has launched large freeze-dried fruit tea slices, each weighing 1.5g, making ingredients visible and enriching the taste. Freeze-dried peach oolong tea
Strawberry black tea
35.8% of consumers think product design is poor, such as labels and strings falling into the cup. We can learn from foreign examples. Japanese tea brand minorien uses cute cats to hold the string, which is adorable and Zen-like. Cat Fishing Tea
Another tea bag label design simulates animals bathing, with low caffeine content for evening teas, where animals have closed eyes or wear nightcaps. Daytime teas have animals with wide eyes, very cute. Animal Tea Party
The Suzhou Museum has a similar design, letting you 'soak' Tang Bohu while drinking tea, experiencing the talent and elegance of the Jiangnan scholar. Tang Yin tea bag
Japan's ocean-teabag brand combines the founder's love for marine life and tea, designing tea bags as marine creatures, making brewing like returning them to the sea. Marine life tea bags
Japanese brand VIASA designs tea bag packaging as postcards. Brew a tea, write a postcard to a friend, how nice! VIASA tea bags
Regarding the 33.8% who think product innovation is insufficient, we've noticed brands making efforts. Yinxiaocha, positioned as 'light luxury tea for young people,' uses rare pyramid-shaped tea bags, priced at 3-4 yuan per gram, compared to the market average of 2 yuan per gram. Yinxiaocha pyramid tea bags
Another new brand, Chaxiaokong, with daily sales exceeding 100,000, has established a tea research institute in Hangzhou with academic and industry experts to develop 'super-extraction tea' using purely physical processing, allowing whole-leaf tea to brew quickly in cold water, achieving 'any water temperature, instant brew.' Chaxiaokong super-extraction tea
UMTEA, founded in 2014, focuses on Western-style blended teas with 'pure and safe flavoring,' combining natural spices and tea leaves. According to the founding team, blending is like perfume with top, middle, and base notes. The tea bag smells one way, and when drunk, you can feel the main and other notes, creating layered flavors. UMTEA
Through continuous innovation, tea bags can win more consumers' hearts.

**03**
## **How to 'Brew' This 156% Growth Track?**
In 1992, Lipton brought tea bags to China, redefining the unit of tea as 'bag,' standardizing and industrializing the tea industry, similar to Ford's assembly line for automobiles. After tea bags appeared, tea drinking became more convenient, and consumption scenarios diversified. In 2019, the China Federation of Supply and Marketing Cooperatives issued an industry standard for flavored tea, indicating the tea bag industry is becoming more standardized.
So, what opportunities lie hidden in this rising star track?
**1. Precise positioning to find niche groups**
Brands can target specific consumer groups with tailored products. A British tea brand focusing on women's tea, Hottea Mama, offers pregnancy tea, breastfeeding tea, and menopause tea. In the competitive UK tea market, it has carved a niche through unique positioning. Chaxiaohu's pink BUFF sugar-free black tea blend also targets women, with packaging colors and ingredients like lychee, longan and red dates, pineapple, and raspberry rose, all favored by women. It's a product designed around the user. Besides women, another group worth attention is office workers. iiMedia Research data shows that in 2021, 44% of Chinese white-collar workers drink tea bags at least once a day, 35.6% several times a week, and 62.4% are most interested in 'heat-clearing' tea bags. White-collar interest in different tea bags
For those who often work 996, staying up late and stress can cause 'heatiness,' and a tea bag that's easy to brew and 'said' to clear heat is a comfort.
**2. Emphasize functionality and expand drinking scenarios**
Capturing pain points in specific scenarios and reinforcing 'my brand can help in this scenario' is a great way to expand brand influence. What scenarios can be developed? According to iiMedia, the main scenarios are home and office. Most products target these. Tea bag consumption scenario analysis
For this generation that eats heavy oil and spicy food but also likes 'goji berries in a thermos,' there are many more specific needs. For example, on a sleepless night, Twinings' purple sleep tea might offer comfort, containing chamomile, passionflower, apple, and vanilla, with reduced caffeine. Twinings functional tea bags
UK brand OFFBLAK focuses on functional products. OFFBLAK tea bags
On its website, products are categorized by ingredient, scenario, and caffeine content, allowing consumers to choose according to their needs. OFFBLAK tea bags
Expanding scenarios has practical benefits. Data shows the functional beverage market for sleep, stress relief, and energy is growing, exceeding 50 billion yuan in 2019 and expected to reach 81.24 billion yuan by 2024. The tea bag market was 5.03 billion yuan in 2019, a tenfold difference with countless opportunities. Starting from scenario expansion might be a good chance for tea bags to take a bite of the functional beverage market.
**3. Young people may avoid hassle but love national trend culture and ritual**
Young people may dislike complicated brewing, but they are enthusiastic about national trend culture and willing to buy domestic brands. On the first day of Tmall 618 in 2020, over 37,000 Chinese brands saw sales grow at least 100% year-on-year. National trend has become a hot topic. Many tea bag brands emphasize: 'We eliminate the tedious brewing process of traditional tea; we are convenient for young people.' But they seem to ignore that traditional tea culture also has elements young consumers like, such as elegance, the identity of a 'cultured person,' and the experience of watching leaves unfurl. No one likes hassle, but tea culture is not just hassle. There are many beautiful things worth preserving and letting young people experience. Perhaps brands just need a better way to communicate with young people. Chayanyuese often combines its products with Changsha local features and various cultural IPs, adding cultural and regional attributes to shorten the psychological distance with consumers. Chayanyuese tea bags
Since consumers already have awareness of these cultural IPs, brands can transfer that psychological asset to themselves through co-branding, achieving rapid growth. This approach may be a better way to spread tea culture than preaching high-end positioning. New brand HASHTEAG engages young people through co-creation. Its tea bags are designed as small clothes, including JK uniforms, Lolita dresses, and Hanfu. HASHTEAG tea bags
The packaging box is a small wardrobe, making tea selection like choosing clothes, full of girlish charm. The brand also connects with the popular OOTD (outfit of the day) trend. Many people have participated in co-creation on Weibo and Xiaohongshu. Consumer creations
The tea bag market holds many potentials waiting to be tapped.

## **-04-**
## **Conclusion**
According to iiMedia Research, tea bags account for an average of 23.5% of total tea consumption globally, 80% in Europe, and up to 90% in the US and UK. In China, it's only 5%, with only 15% of consumers saying they regularly drink tea bags. The tea bag market is undoubtedly full of potential. Many industry insiders have noted that 2019 showed rapid growth, and it's just the beginning.

Source: FBIF Food & Beverage Innovation (ID: FoodInnovation)
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