Local beverage may not be everyone's cup of tea
Brand China
"We mainly sell tea as a raw material rather than a branded product," said Li Jiaxun, board secretary of Zhejiang Tea Group, China's largest tea exporter and the world's leading exporter of green tea.
Zhejiang Tea sells its tea in Africa, the largest importer of Chinese tea, and also Europe and the US, although they account for less than 10 percent of the company's market overseas.
"The profit margin is only about 5 percent, and sometimes we even lose money," admitted Li.
China provides 80 percent of the green tea on the global market, which is supposed to give a country a bigger say in the pricing of the "soft" commodity. However, the country's voice has gone unheard in recent years. Although more than 400 companies in China export the beverage, only three of them sold more than 20 million kg overseas in 2011, while 260 sold less than 100,000 kg.
Li said the number of tea exporters has been rising in recent years, since the government abandoned its system of quotas and licensing restrictions on tea exports in 2006. Moreover, the newcomers have been engaged in a price war, expending valuable energy that they could otherwise have been harnessed in promoting the product instead.
"It is a pain that we have to endure during this period of transition," said Cai Jun, director of department of tea, drinks and horticultural products under the China Chamber of Commerce for the Import and Export of Foodstuffs, Native Produce and Animal By-products.
He said that before the reforms only a few State-owned companies were allowed to export tea, but they had little conception of brand awareness. Meanwhile, the problem for today's private enterprises is that they don't have enough money to undertake promotions overseas.
"In the other major exporters such as Sri Lanka and Kenya, the government takes a leading role in the tea industry. But tea only accounts for a very small part of our country's total exports (0.0027 percent in 2011) and the trade in other agricultural commodities takes priority," said Cai.
"But China used to be famous for its teas, so it's important that we restore it to its former glory."
