Rapid development of Chinese tea trade in Russia

The Chinese tea in Russia is not a novelty. Tea from the Middle Kingdom first reached tsarist Russia in the 16th century via the ancient Silk Road. However, as history unfolded, the Indian tea gradually held sway over the market leaving its Chinese counterpart behind by offering lower prices and greater accessibility to tea products.

The modern period for the wider Chinese tea trade in Russia began around 1990s after the Soviet Union collapsed. Before, the Soviet people enjoyed dark tea from India, having tea breaks at work, drinking tea at home after the main meal accompanying it with a dessert. Nowadays, as China’s role in international affairs continues to grow along with its influence, Russians developed a greater interest in their closest neighbor, its culture, language and business with China. Chinese tea culture marked its comeback to the market of Russia and gained popularity among the tea lovers. However, quality tea from China still comes at a very high price and only a few people, genuine tea lovers, can afford it. During the current tough economic times, both tea traders and tea connoisseurs are now in a difficult situation, but none of them want to part with their habit of drinking good Chinese tea. For many of them, Chinese tea has gone far beyond just a business deal, it has became their life philosophy, a way to learn China and an inseparable part of their everyday living.

Turning hobby into business
Chinese culture is rich and its aspects are interconnected. For instance, through practicing martial arts one can learn not only fighting stances, sometimes basics of traditional medicine as well as being able to speak some simple Chinese and tell one sort of tea from another, as tea is usually served after the practice. In Russia, Chinese wushu is speedily gaining its popularity. Denis Kryuchkov, a resident of Moscow, discovered his way to Chinese tea trade through practicing martial arts in the remote 90s. Back then he founded a teashop called "Red Dragon" that specialized in Chinese tea, it still functions today. As Denis puts it, it was impossible to get a quality Chinese tea at that time, and while being away on wushu practice sessions in Beijing, he used this chance to buy good tea and bring it to Moscow for his friends and family. At first, he didn’t view it as a source of income, it was merely a hobby. But from 2012 his hobby started generating revenue, so Denis was quite optimistic about filling the vacant niche market of Chinese tea in Russia.

At the same time, in the 90s, Chinese tea clubs began to spring up major in Russia cities. Alexander Zhiryakov, a tea entrepreneur and a founder of Laos Tea company, was one of the frequent visitors to a Chinese tea club in Moscow. There he got acquainted with other tea lovers and made a decision to enroll for a two-year Chinese-language training program in Peking University to get closer to China. As with Denis, in the beginning he treated tea as his hobby, but later it turned into business. Now he lives in Laos, China and Russia, preparing different sorts of tea, participates in tea fairs and has written a book on red tea.

Turbulent times
However, even though for the Chinese tea trade was a promising start, now the business doesn’t look as lucrative as it used to do. When we just started our business, the economic conditions in Russia were more favorable. We actively promoted Chinese tea to the restaurants, created a website where we advertised different types of tea, added description and photos from our trip around China. In 2012 our business was growing at a good pace, but now it all has changed due to the economic situation. The consumer power in the country dramatically decreased and people were no longer willing to spend money on expensive tea. Even respected restaurants, in order to cut costs, turned to cheaper teas", - said Denis.

According to Denis, since 2012 his company was selling 800–1,000 kg of Chinese tea per year, 50 percent of the sales were made up from average priced red (black) tea at the price of 100 yuan per kg. Black tea has been all-time favorite among Russian consumers. The rest 30 percent of the tea sold was middle category and 20 was elite tea, namely some kinds of pu’er and oolong tea. However, by 2017 the amount of tea sold fell by half, and the company managed to sell only 400–500 kg a year, while the proportion of inexpensive red tea went up to 70 percent and middle category tea stood at 30 percent. Only 5 percent of quality tea was distributed with mixed success. Denis Kryuchkov said that under the given circumstances Chinese tea can only be made a hobby, not a source of income. For single tea traders, it is hard to survive making business chiefly on good tea; however, big corporations who focused on price not quality remained afloat.

Alexander Zhiryakov agreed with this opinion. He said that the worsening of the economic situation in Russia had negatively impacted Chinese tea sales in the country. While in the beginning he planned to turn high-quality tea into his company’s main product, now this seems unlikely.

Optimism against all odds
Notwithstanding the fact that nowadays business climate for Chinese tea market in Russia doesn’t look appealing, Russian businessmen haven’t lost hope. According to Denis, he keeps promoting Chinese tea wherever he can. "Since I work in the movie industry, I use every opportunity to promote the Chinese tea culture. Chinese tea has become part of my life along with the Chinese culture," Denis added.

Another entrepreneur and tea ceremony master Fanil Makhmutov from Kazan, Tatarstan Republic, who has always expressed great interest in Chinese tea and culture, only recently launched a tea club called "Kazancha" in Kazan with the main focus on tea from China. Despite the economic pitfalls, he keeps coming to China on a regular basis, eager to get a better understanding of the Middle Kingdom, improving on his language skills, and exploring new aspects of the great culture of China.

Moreover, rapidly developing ties with China also add to the spark of interest toward China in Russia. Experts noted that more people, due to the growth of exchanges and tourism in both countries, now became aware of good qualities of Chinese tea, they could name different kinds of it and even had their favorite, like oolong, pu’er, dahongpao, flower teas. Almost all big cities in Russia have tea clubs and tea houses and many supermarkets offer made-in-China tea.

After the economic crisis broke out, many tea sellers who used to deal with Russia now distribute tea to other countries and regions. Alexander Zhiryakov, whose tea production suffered from the economic slowdown, claims that sales in the US and Europe helped the company to stay on balance.

Tea providers in China who work with Russia noted that the tea market in Russia shrank by two thirds. For instance, a tea shopkeeper named Lin who collaborated with Russia since 2005 provided tea to more than 20 tea shops and single tea distributers in Russia. However, after the economic situation worsened the majority of them shut down their shops. But, in comparison with other countries, Lin claims, Russian market stills look profitable.

Extracted from chinadaily