Summary of Key Points
New Chinese-style tea houses became extremely popular in 2023, riding on the wave of "New Chinese-style+" trends and attracting significant capital investment. However, due to over-reliance on internet celebrities for publicity, mispositioning, and severe homogenization, many of these businesses closed down in 2026 (with leading brands such as Tea Yan Yue Se Xiao Shen Xian and tea'stone shutting their doors). The surviving brands have begun to transform their strategies, shifting from a focus on traffic generation to value creation. They are integrating tea with other elements like food and cultural experiences, removing the internet celebrity element, and diversifying into larger venues (for a more immersive cultural experience) and smaller, more efficient establishments (for convenience). In the future, Chinese-style tea houses may evolve into three main models: daily tea consumption spots, urban public spaces, and community-based tea houses, with the ultimate goal of returning to their core function as places for genuine tea enjoyment.
I. The Illusory Prosperity Behind the Internet Celebrity Label
The sudden popularity of new Chinese-style tea houses was largely a result of capitalizing on temporary trends. In 2023, "New Chinese-style" became a dining trend, with leading brands like Xi Cha and Tea Yan entering the market, and numerous new stores opening within a year (a total of 20,000). These shops attracted young customers with their traditional Chinese decor, exquisite tea sets, and photo-friendly atmospheres. For example, Xiao Shen Xian was once known for its long queues, while Shan Cha Tea House had over 5,000 Rednote posts. However, this success was short-lived:
- Traffic is fleeting: Young people visited these places to post on social media but did not return.
- Severe homogenization: New Chinese-style tea houses across the country looked similar, leading to rapid fatigue among consumers.
- Low frequency of consumption: Drinking tea is not as frequent as drinking milk tea or coffee; customers did not come regularly.
By the end of 2023, some stores were already closing within three months, and by 2026, brands like Xiao Shen Xian had completely disappeared, indicating that the internet celebrity model was unsustainable.
II. The Root Causes of Mass Failure
The failure of new Chinese-style tea houses can be attributed to two main issues:
1. The "New Chinese-style" concept is misleading: Tea houses are a traditional Chinese culture, but the "new" aspect was merely an internet-friendly label that did not address real consumer needs. Data shows that social media discussions around tea were more about the setting and photography than the tea itself.
2. Mispositioning the target audience: Most new Chinese-style tea houses targeted urban young women, presenting tea as a luxury experience. However, this group does not drink tea frequently; they only visit occasionally. In contrast to coffee (drunk daily) or milk tea (consumed several times a week), new Chinese-style tea houses had low customer turnover and repeat business rates, despite high rent and operating costs. For example, a tea house in Xi'an lost 50,000 yuan per month on a 2 million yuan investment, while another in a first-tier city closed within two months after a 6 million yuan investment.
III. Surviving Brands: Adjusting Strategies to Meet Consumer Needs
The brands that survived have made the following adjustments:
- Adding value: By integrating tea with other services (food, cultural experiences), they increased the frequency of customer visits.
- Removing the internet celebrity element and localizing their approach: They differentiated their styles by avoiding the uniform traditional Chinese decor. For instance, Xi Cha opened premium stores with copper teapots, while Yu Lian Tea House focused on high-end, authentic tea using local ingredients to attract true tea enthusiasts.
- Diversifying formats: Larger venues became cultural complexes, while smaller ones (like Ba Wang Cha Ji) focused on convenience and quality products to meet daily tea consumption needs.
IV. Future Directions: Moving from Trend-following to Sustainable Models
For Chinese-style tea houses to thrive, they need to return to their fundamental role as public spaces:
- Daily tea consumption: Brands like Xi Cha are developing regular tea products for young consumers.
- Urban public spaces: Large venues with cultural experiences that attract a wide audience (e.g., Dong Mao Street and Da Qi Tea House).
- Community-based tea houses: Small, affordable establishments in neighborhoods that provide convenient and affordable tea options.
V. The Lesson from the Industry
The rise and fall of new Chinese-style tea houses highlight that internet popularity is temporary, while real consumer needs are essential. Although China's love for tea remains unchanged, the way people consume it has evolved. Future tea houses should focus on providing practical and accessible solutions. As Liang Shiqiu said, "Wherever there are Chinese people, there is tea." The essence of tea will always be there; it just needs to adapt to modern lifestyles.
(The translation maintains the original Markdown structure and uses clear, financial journalism-style language to make the analysis understandable to a non-financial audience.)