Chinese tea company ventures into European luxury market
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- Published on Monday, 23 January 2012 02:40
CHINA - While many producers in China are trying to lower prices to boost exports, one Chinese tea company has decided to take an alternative route.
Eight Horses Tea Co Ltd from Anxi, Fujian province has decided to go directly into the European market and focus on the high-end market with their gourmet tea products.
Lin Rongxi, Eight Horses’s deputy general said, “Right now everyone is talking about the rise of China. In my opinion, Chinese tea should be the symbol of that rise, much as Louis Vuitton bags and Porsche or Ferrari sports cars are.”
Together with four tea producers from Anxi County, Eight Horses is now currently in the midst of setting up its first marketing center for Oolong tea in Saint-Germain-des-Pres, in Paris, France.
This venture is part of an agreement the Chinese companies made with Leblond Gre’gory, their European partner, which stipulates that the five companies will jointly operate the center under the brand name Anxi Tieguanyin, with the objective of providing high quality tea products to the European premium market.
“With the launch of the marketing center, we plan to enter the core area of the high-end market in Europe and build up our networks and regional influences,” Lin explained.
According to Wang Wenli, head of Anxi Tieguanyin Tea Association, the European market is “the symbolic spot” for tea companies in China to go global, particularly in Paris, where many luxury brands are present.
"Through this marketing center, we would like to promote Tieguanyin as a luxury product and look for a broader international market," Wang said.
Currently, Eight Horses has more than 800 stores spread across China, and sells about 1,000 tons of Oolong tea. In 2010 the company sold 2,000 tons of Oolong tea outside of China - about 15% of China’s total annual export for the tea products.
About 20,000 tons of Oolong tea are currently exported from China annually and priced between $2 - $3 per Kilo. However, Lin said that the existing price is not consistent with what the real value of the product really represents.
“Tea is a good and fine product, not just some raw material for industrial processing of bottled drinks,” he explained.
"Previously our products were mainly sold overseas in bulk. Now we want to sell packaged tea at a much higher price. Western consumers may need time to accept the fact that tea can be really expensive.”
The first container of Eight Horses tea has been delivered to France and is pegged between £50 - £500 (US$77 - 772) per kilo.
According to Lin, the Paris center will be ready in late January in time for the Chinese Spring Festival. Lin also said that the companies have already invested about 30 million yuan (US$4.76 million) for the construction, management and promotion of the center.
The 100 square meters center has been divided into a sales and tasting area, and will also host various cultural activities to help boost tea awareness specifically for their tea variety.
"We want to raise another round of Chinese tea mania in Europe," Lin said.
He expects Tieguanyin to be popular in the European Union within five years. "It is our aim, but it all depends on our long-term efforts."
