Hema's tea business starts by breaking the information gap.

This article source: Times Weekly Author: Liu Ting

In China’s consumer landscape, tea remains one of the few industries highly dependent on information asymmetry to do business.

The same Longjing tea can vary in price by several times or even dozens of times; similarly branded as “Mingqian Tea,” its origin, picking standards, and processing techniques behind it are rarely clearly explained.

“Some things are very cheap, some are very expensive, mainly because the industry lacks transparency,” said Shan Shen, head of Hema’s supplement brand “He Bubu,” during a visit to Longjing tea producing areas recently. For a long time, the tea market, worth over one trillion yuan, has been supported by high premiums from gift attributes on one side, and consumers’ general perception of “water depth” on the other.

This opacity is gradually being challenged.

Since 2025, Hema has been expanding into the tea sector through its health supplement brand “He Bubu.” From direct sourcing and regional division, to picking standards, processing techniques, grading systems, and self-built logistics networks, Hema aims to deconstruct this typical non-standard product into a supply chain system that can be defined, quantified, and replicated.

In this process, the pricing logic that originally relied on brand premiums and information gaps is beginning to loosen. “Many sky-high priced teas will gradually return to their original prices,” Shan Shen predicts.

When prices are no longer dictated by storytelling and gift boxes, the underlying rules of this trillion-yuan industry are being rewritten.

Rebuilding the trillion-yuan tea business

If we observe tea within China’s consumer market, it resembles a special category that has long been outside the standard system.

According to the China Tea Circulation Association, by 2025, China’s tea industry will maintain steady growth, with a national dry mao tea output of 3.7051 million tons and a value of 340.1 billion yuan, up 5.89% and 5.69% year-on-year respectively; the entire industry chain, including tea tourism integration, will reach a total output value of 1.14 trillion yuan; the domestic market for traditional raw leaf tea will surpass 350 billion yuan, with nearly 2.6 million tons sold domestically; tea exports will reach 418.8k tons and $11.4k in export value, both hitting record highs.

In traditional tea sales systems, prices are often not solely determined by cost or quality but are shaped by brands, channels, and storytelling capabilities. The same type of tea, distributed through different packaging and channels, can have its price multiplied several times or even dozens of times.

Li Xiaojun, chairman of Yifutang Tea, openly states that if gift boxes and branding are added, “a little advertising plus a gift box can multiply the price by 5 to 10,” which is common in the industry.

This pricing logic is built on consumer perception thresholds.

“Consumers may think this industry is very deep, and I don’t know how to choose,” Shan Shen says. He believes that from planting in tea gardens to picking and processing, different stages greatly impact quality, but these details have long been neither effectively standardized nor made public. “Many family workshops produce without uniform standards, relying more on experience transfer. From planting to processing, no one can clearly explain why some tea tastes better.”

Against this backdrop, consumers find it difficult to establish a stable judgment system and can only decide based on brands, store recommendations, or price levels. This “incomprehensible” state further reinforces the industry’s premium space.

Meanwhile, the industry structure itself amplifies this issue. Many small and medium-sized tea companies focus on a single category, with obvious regional characteristics, making it difficult to form unified standards; some gift tea channels rely on high-margin models to sustain operations, and the relationship between price and quality is unstable.

But this logic is changing.

With the proliferation of information channels and increased consumer awareness, the tea price system is beginning to show signs of loosening. “As the consumer market develops, the quality of products should be getting better, but prices are trending downward. Many previously overpriced products are returning to normal levels,” predicts Shan Shen. The model that relied on emotional value and brand premiums is gradually giving way to more rational consumer choices.

Standardizing non-standard products

Unlike traditional tea companies, Hema’s entry into the tea sector did not start from branding or channels but chose a more fundamental approach: reconstructing the supply chain from the source.

In the view of the He Bubu team, the core issue in the tea industry is not simply inflated prices but the lack of a reusable standard system across the industry. Therefore, before officially entering, the team spent a whole year deeply exploring the origin areas, visiting factories, and dissecting the supply chain to fully understand the current industry situation.

Shan Shen recalls that during the initial research phase, the team visited multiple tea-producing regions across the country, from wholesale markets to tea gardens and factories, screening and mapping them one by one. They found that “less than 1% of factories meet cooperation standards.”

This process of starting from zero to deeply understand the industry laid an important foundation for Hema’s subsequent development of a standardized tea system.

On a practical level, Hema deconstructs this typical non-standard product into multiple quantifiable links: origin, tea garden, tree age, picking method, processing technique, grading standards, etc. “We break down the supply chain into tea gardens, regions, tea varieties, and every step from picking to processing, redefining standards,” Shan Shen explains. This dissection makes previously vague quality standards clear and actionable.

For example, in the green tea category, He Bubu uses the “one bud, one leaf” ratio as a core grading indicator, clearly agreed upon with upstream suppliers; the picking process distinguishes between hand-picking and machine-picking to ensure consistent quality across different specifications; on the processing side, higher-standard factory systems are introduced, using professional equipment and standardized techniques to stabilize product quality, gradually transforming quality variables that once relied on experience judgment into verifiable, traceable parameters.

In addition to upstream standardization, logistics and fulfillment systems are also optimized. Relying on Hema’s self-built supply chain network, once tea leaves are processed at the origin, they can directly enter the distribution system for the fastest delivery to stores and consumers, minimizing intermediate losses and preserving the tea’s best flavor.

If the core logic of the traditional tea industry is “multi-layer circulation + information opacity,” then Hema’s goal is to maximize the compression of circulation links, making every part of the supply chain visible and traceable, breaking the long-standing information barrier in the industry.

This supply chain reconstruction directly drives a shift in tea pricing logic.

“We source everything directly from the origin, and the costs and profits at each step are calculated very clearly,” Shan Shen states. “From tea farmers to the end consumer, we know the profit margins at every stage.”

Li Xiaojun also mentions that compared to traditional e-commerce, which requires continuous advertising expenses, they prefer to invest those funds into supply chain development, achieving “better tea with the same money.”

Beyond supply chain reconstruction, Hema also leverages its data capabilities to reverse-define tea products, precisely matching consumer needs.

Based on user purchase data and feedback, He Bubu continuously optimizes product specifications and formats: for example, reducing the original 150-gram large package to a 90-gram small size, aligning with consumers’ actual drinking cycles to avoid waste; structurally, they differentiate products for daily consumption, gifts, and souvenirs, developing targeted offerings to better meet user needs.

Supported by this comprehensive standardization system, tea is no longer a non-standard product relying on experience and storytelling but gradually acquires core features similar to industrial products: controllable standards, reproducible quality, and price derivation, breaking the long-standing black box in the industry.

Shifting pricing power

If we place Hema’s attempts in the broader context of consumer trends, their significance may go beyond merely expanding a product category. The more critical change is the transfer of pricing power.

For a long time, the pricing system in the tea industry was built on brand, channels, and information gaps. Gift attributes, store explanations, and packaging narratives formed the main basis for consumer decisions. Under this logic, prices do not fully reflect quality but depend more on who holds the interpretive authority.

But as information transparency increases, this pricing system is beginning to loosen and collapse: on one hand, consumers have more channels to access information, continuously compressing traditional premium margins; on the other hand, channel platforms like Hema, through their own brands and supply chain capabilities, directly participate in product definition and pricing, redistributing profits that were once dispersed across upstream and middle links.

This transfer of pricing power also causes a profound shift in channel roles. Unlike traditional supermarkets that merely serve as sales terminals, Hema functions more as an integrated platform combining channels, brands, and supply chains: on one side, its own brand “He Bubu” directly participates in product development and standard setting; on the other, its offline stores and instant retail systems provide stable reach and fulfillment capabilities.

As part of the Hema ecosystem, He Bubu naturally inherits trust, brand endorsement, and user access, shifting the channel’s role from mere seller to definer. This transformation is especially significant in a long-standing highly non-standard industry like tea. As origin, picking, and processing elements are gradually standardized, and prices can be clearly broken down and explained, the traditional reliance on experience and storytelling for pricing becomes increasingly unsustainable.

Behind this change lies a deep iteration of consumer logic. In recent years, China’s consumer market has shifted from brand-driven to value-for-money driven; currently, a new trend is emerging from value-for-money toward quality-price ratio, which emphasizes maintaining quality while reducing prices through supply chain efficiency.

Under the logic of quality-price ratio, what truly determines a company’s competitiveness is no longer just brand influence but also its ability to integrate upstream resources, control cost structures, and accurately understand consumer needs.

Tea is merely a window into this industry transformation. When an industry moves from “who tells the better story” to “who does the work more solidly,” the underlying operational rules have fundamentally changed.