Youngsters in China prefer tea houses to coffee brands

Youngsters in China prefer tea shops to coffee outlets, despite tea prices going up, according to market research.

NPD Group, a research institution focused on consumer insights, has found that freshly brewed tea is the fastest growing category in the beverage sector, followed by coffee, juice and soda.

An industry report conducted by Meituan-Dianping and Anchor, a dairy brand under Fonterra, meanwhile shows that consumers in China are willing to pay more for their tea.

The price for tea drinks – among them fruit, cheese and bubble milk flavors – has been on the rise since the third quarter of 2017.

The survey found that the percentage of tea drinks priced below 15 yuan ($2.2) has lowered from 63 percent to its current 57 percent. Those priced between 15 yuan and 29 yuan grew from 32 percent to 39 percent.

The survey noted that coffee products priced above 50 yuan account for 19 percent of all coffee drinks, compared with 18 percent a year ago. The percentage of coffee products priced between 30 yuan to 49 yuan remained still at 45 percent.

Last year the freshly brewed tea sector expanded quickly, with new brands entering the market. The number of tea shops grew from 330,000 outlets in the first quarter of 2017 to 570,000 in the third quarter of 2018.

According to Meituan-Dianping, Starbucks is the only coffee brand appearing in the top 10 most searched freshly brewed beverage brands in 2018. The other nine are all tea house brands. There were three coffee shop brands on the same list in 2017.