Produced by | At the forefront of entrepreneurship
Author | Feng Yu
Edit | Egg Total
Editor | Li Yufei
Audit | Ode
After the Qingming Festival, spring tea was listed in a centralized manner, and it was the "hunting moment" for new and old tea customers to look for green tea everywhere.
As one of the top ten teas, the first batch of Biluochun tea has already been on the market in March this year, with Dongshan Town and Xishan Town of Taihu Lake in Wuzhong District, Suzhou as the core production area, and the total output of Biluochun is estimated to be 105 tons.
The production process of Biluo spring tea is complicated, 60,000 to 80,000 buds only get a catty, the output of Biluo spring tea before the Ming Dynasty is even rarer, and there are even rumors that "the Biluo Spring of Dongting Mountain before the Ming Dynasty, 99% of people can't drink it".
Such "sky-high prices" have also made tea sales a business that some traders can see as high profits.
(Photo / Photo Network, based on VRF protocol)
Not only Biluo spring tea, there are many types of Chinese tea, and there are more famous teas, but under the traditional sales path, it is often difficult to escape the fate of being "counterfeited" - new tea mixed with old tea, old tea renovation, and surrounding production areas pretending to be core production areas and other routines emerge in endlessly; For new and old tea customers, the lack of tea appreciation, the opaque price of tea, and the overall premium are even more obstacles for them to buy tea.
In the face of complex industry chaos, some e-commerce platforms are trying to break the industry slump.
At the spring tea listing ceremony on March 17, Jingdong Supermarket announced the purchase price of Biluochun in the core production area of Dongting Mountain, and the purchase price of the second-grade Dongting Mountain Biluochun tea was 1000-1100 yuan per catty, and its selling price was only about 1200 yuan per catty, far lower than the market circulation price of 3000 yuan per catty.
As soon as the purchase price of Jingdong tea came out, it was like dropping a bomb on the industry.
The traditional tea industry is closer to the sale of agricultural products, and the production and distribution links are not very transparent, so it is often considered "very deep" by the outside world. And JD.com's move is like tearing open a hole in the tea industry, exposing the affordable and good tea itself to the sun.
1. "Fry" the tea leaves to the sky
One of the important reasons for the long-standing saying that "Chinese tea has categories but no brands" is that the entire production and sales chain is not transparent, resulting in unclear tea grades and no standard overall pricing, making it difficult to build a mature tea brand.
"Tea is a non-standard product, the price is not transparent, consumers do not have a clear grade standard and guide price as a reference when purchasing, and novice tea customers usually have a black eye." The person in charge of tea procurement and sales at Jingdong Supermarket said to "Interface News, Entrepreneurship Frontline".
Behind such opaque spaces, there is often a profit gap of dozens of times.
After accounting, the market circulation price of the second-class Dongting Mountain Biluochun currently on the market is about 3,000 yuan per catty, while the "catty price" of the same grade product in Jingdong Supermarket is only about 1,200 yuan.
The disclosure of this data also means that there is a lot of "moisture" in tea products with the same grade of tea that is significantly higher than the purchase price.
Not only is the price of e-commerce channels not transparent, but offline channels are also a high incidence of tea premiums.
"The owners of some offline tea stores even sold last year's spring tea at a high price of 1,800 yuan per catty." Liu Yang (pseudonym), a veteran observer of the tea industry, said.
The production of some tea categories is very limited, which has led to market speculation and price mystery. "If you look at the tea industry yearbooks of the past three years, you will find that all categories have transparent industry prices, but Longjing tea does not." Liu Yang added.
(Photo / Photo Network, based on VRF protocol)
The price of tea sold through traditional distribution channels will also rise compared with the ex-factory price.
According to Liu Yang's calculations, tea dealers from all sides of the channel to receive bulk goods need to increase the price, in the production area to take the price of tea is lower, if the hard cost of tea can reach 800 yuan / catty, plus the packaging materials and labor costs of the ex-factory price can reach 900-1000 yuan / catty. Each link retains 10% of the profit, and finally the price in the terminal store has reached 2,000 yuan / catty.
But for most new and old tea drinkers, they are willing to spend for expensive and good tea, but they are not willing to bear the additional cost of channel redundancy.
Now, Jingdong Supermarket has disclosed the purchase price, and the price is much lower than the previous market price, which to some extent, has indeed stirred up the price system of the traditional tea industry, which undoubtedly seems a bit bold.
So, what is the purpose and confidence behind JD Supermarket's move?
2. E-commerce sells tea 2.0
From the perspective of the tea business team of Jingdong Supermarket, it is the purpose of this public purchase price to help practitioners and tea enterprises simplify the link and improve efficiency from the upstream.
But for tea companies, the price of supply means thinner profits, which also makes convincing tea companies a difficult task.
On the one hand, the supply price belongs to the core data of tea enterprises, and the opening of this price is equivalent to disclosing the operating costs of the enterprise, which has certain challenges; On the other hand, tea is an agricultural product, and the annual harvest is greatly affected by the climate, which will also directly affect the price of final tea.
"Jingdong and tea companies have reached a long-term strategic cooperation, and the platform can link more e-commerce and group supply chain resources to the latter, so as to eliminate the worries of tea companies." The person in charge of tea procurement and sales in Jingdong Supermarket said.
In fact, as more consumers buy tea online, tea companies have also begun to take the initiative to promote online tea sales.
"In addition to OEM and offline self-operated products, 5% of our tea is sold through online channels, and the future of e-commerce in tea sales must be promising." Hu Biru, general manager of Hangzhou's high-end Longjing tea brand "Lu Zhenghao", said to "Jiemian News - Entrepreneurship Frontline".
As the third generation inheritor of the brand, she once deeply appreciated the value of new e-commerce channels for the traditional tea industry.
(Photo / JDL Jingdong Logistics official Weibo)
After all, the advantages of selling tea through online channels are obvious compared to offline channels.
"The online sales of goods are more complete, diverse, and have a price advantage, which is also the reason why JD.com and tea companies will jointly customize online products." The person in charge of tea procurement and sales at Jingdong Supermarket said that what JD needs to do is to promote tea companies to cover all the company's tea SKUs to online channels to ensure the richness of products.
The online and offline linkage is also an important way to help tea companies sell online.
"Many consumers don't know how to choose tea, let alone make tea, and if they want to know the story behind tea culture, they have nowhere to go. In response to this market pain point, JD.com will cooperate with tea companies to hold experience activities in offline stores, or carry out global linkage and marketing. The person in charge of tea procurement and sales in Jingdong Supermarket revealed.
According to the changes in market demand, customized tea products can also better link consumers.
"According to industry practice, Longjing tea likes to make 200g and 250g carton packaging, but consumers prefer to try a variety of flavors of goods, so we also cooperate with tea companies to customize 150g or 100g carton packaging specifications, integrating different flavors of tea into a whole tea combination packaging." The person in charge of tea procurement and sales in Jingdong Supermarket said.
(Photo/"Lu Zhenghao" Jingdong self-operated flagship store)
Since the beginning of this year, Jingdong has also launched the "Jingdong Procurement and Sales National Search for Good Tea" activity, more than 40 live broadcasts in the country more than 10 are traceable live broadcasts, that is, the Jingdong procurement and sales team has traveled to the country's core tea producing areas such as Jiangsu, Zhejiang, Anhui, etc., to present the production and picking process of tea raw materials to users, and convey tea culture from the source.
"When more young people start to consume tea online, offline traditional individual tea estates and wholesale markets may slowly withdraw, after all, these offline channels do not have a fixed customer flow, and the pressure on offline operations is increasing." The person in charge of tea procurement and sales in Jingdong Supermarket said.
3. Let "black technology" empower
In addition to the need to rectify channels to make prices more transparent, the traditional tea industry is also receiving more "black technology" empowerment.
"Senior roasted tea masters are an important asset for tea companies, but many of them are getting older, and there is no new generation of young people to take over, so the digitalization of the tea industry is inevitable." Hu Biru said.
The temperature of the traditional tea-making hand-wok is 200 degrees, and the roasting master needs to press the fresh leaves into flat flakes by hand, and this process cannot be completed without more than ten years of skill. In the future, more tea companies will need to realize these traditional skills through digital factories.
According to Hu Biru, Lu Zhenghao's brand factory currently has four digital production lines - the first is the digital intelligence production line, that is, the initial processing production line, which processes fresh leaves into dry tea, which can achieve full automation; the second is the refining automatic production line, that is, the refining of the initial tea; In addition, there are logistics production lines and packaging intelligent production lines.
Some old tea customers once believed that machine-made tea is not as soulful as hand-made tea, but in fact, there is no absolute good or bad difference between machine or manual tea in terms of quality.
"Tea made by machines can also be sold at a high price, even surpassing some handmade teas that are not made with care." Hu Biru said that hand-made so-called "soul" is not necessarily a good thing, and machine-made tea is not necessarily bad.
Today, the high-speed operation of the four digital production lines has also greatly improved the efficiency of Lu Zhenghao Tea Factory. "Now the factory can complete the processing of 15,000 catties of fresh leaves per day, which used to require 130 people to complete the processing, but now only 10 people are needed, and the efficiency has increased thirteen times." She added.
Standardized and large-scale digital factories have also gradually recognized the value of high-priced tea.
(Photo / JDL Jingdong Logistics official Weibo)
This year, Lu Zhenghao developed a Longjing tea, and the terminal price was sold to 3,000 yuan per catty, which was in short supply. "It's not that consumers are reluctant to buy high-priced tea, if they need to be given a reason." Hu Biru said.
In addition to the production process, green tea is generally more focused on freshness, so logistics and distribution efficiency are very important.
Taking Huiliu Tea Company as an example, the tea company has JD logistics points in more than 30 core producing areas across the country, which also means that JD can efficiently send the brand's fresh green tea to all parts of the country at the fastest speed.
(Photo / JDL Jingdong Logistics official Weibo)
In addition, the introduction of the new packaging law in 2023 will also have a certain impact on the tea industry, which was once over-packaged.
"For the simple new packaging of tea, JD will do detailed accounting. However, in order to ensure that the package is not damaged during transportation, JD.com will upgrade the grade of the entire packaging to ensure that the product can still maintain the expected condition and appearance without over-packaging. The person in charge of tea procurement and sales in Jingdong Supermarket said.
In the production process, Jingdong is also piloting drone picking, and the young leaves picked by tea farmers are collected and transported by drones to shorten the transportation time so as not to affect the freshness of the tea.
For JD.com, through the advantages of the supply chain, it can help tea companies save the costs and expenses of the back-end of the tea industry chain, and then bring down the price through cost accounting, so that the famous and high-quality tea varieties can remain relatively low, and at the same time strengthen the supervision and screening of prices to prevent shoddy or fake situations.
What is even more pleasing to tea companies is that through online and digital transformation, the traditional tea industry is fully "turning red".
*Note: The title image in the article is from the photo network and is based on the VRF protocol. Liu Yang is a pseudonym in the article.