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Fuding tea merchants expand into Kunming, tapping into the southwestern tea market.

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2013-08-14

  [Lead] At the South Asia Expo held in Kunming in early June this year, reporters met with these Fuding tea entrepreneurs who have been making their mark in Kunming for nearly a decade, uncovering the lesser-known stories of how they once pioneered new markets and turned tea trading into a thriving business.

  At the beginning of this century, capitalizing on the business opportunities presented by hosting the World Horticultural Exposition, Fuding tea merchants made a major foray into Kunming—yet their journeys almost universally shared a common thread: they were "forced" to leave their hometowns and venture into the city.

  Carrying tea bags on their backs, roaming through streets and alleys became their common strategy for tapping into Kunming—and even the broader southwestern tea market.

  The emergence of specialized markets allowed them to move beyond the chaotic "street and alley competition," and their "shop-based trading" helped them accumulate their first pot of gold.

  Brand franchising has enabled some tea merchants to embark on a journey of modern enterprise development, fostering an integrated production, supply, and sales model.

  If, in recent years, the group that has generated the most buzz—and immense wealth—among Fuding’s business circles refers to the Fuding merchant guilds that thrived by mining coal in Shanxi and operating the stone industry in the Yangtze River Delta, then in the past few years, another remarkable wealth-creating group has also begun making waves across the national market: the Fuding tea traders.

  At the South Asia Expo held in Kunming in early June this year, reporters spoke with these Fuding tea entrepreneurs who have been making their mark in Kunming for nearly a decade, uncovering the lesser-known stories of how they first broke into the market—and ultimately turned tea trading into a thriving business.

  "Forced" to leave home and venture into the market

  In fragmented, individual interviews, a clear thread emerges—revealing how Fuding tea entrepreneurs began venturing into Kunming, Yunnan, on their own initiative starting from the turn of this century. Today, many of these accomplished tea merchants were initially "forced" out of their comfort zones, driving them to step boldly into the "tea world" and carve out their own paths.

  Liu Jingping, the owner of Haiwan Tea Garden who has been running his business in Kunming Xiongda Tea Culture City for nearly 10 years, bears the unmistakable marks of that era. Deep in his memory lies the reason behind the subsequent exodus of many Fuding tea merchants: it was fundamentally tied to Yunnan Province’s aggressive promotion of Pu'er tea during the Kunming World Horticultural Expo.

  In 2001, Liu Jingping from Qiantou Village in Ganyang Town, his hometown, arrived in Kunming, Yunnan, from Quanzhou just as the region was experiencing a major boom in Pu'er tea leaf cultivation.

  In 2002, Liu Jingping, finally unable to bear it any longer, raised 10,000 yuan and began exploring the tea market in Kunming. Although he eventually spent every last penny—and even had to borrow money to buy a plane ticket back home—Kunming’s significant profit margins in the southwestern tea market only boosted his confidence even further. Determined to collaborate with local large-scale Pu'er tea growers, he decided to set up a factory, producing raw materials before returning to tap into the market once again.

  However, beneath the glamorous facade of the market lies a hidden, massive vortex. When Liu Jingping arrived in Kunming in 2003 with tea that had cost him over 300,000 yuan, he nearly stepped into an irreversible abyss. Despite his previous optimism about the market, not a single pound—or even a single tael—of his tea could be sold. No matter how hard he tried, lugging his goods from shop to shop every day, he simply couldn’t move a single piece.

  Next, Liu Jingping almost pleaded as he extended credit—selling tea on account—to those tea vendors who “rented a counter but had nothing else to offer.” Recalling this situation, Liu admitted he was constantly worried that one day his pager might stop working altogether. After all, if he couldn’t reach them anymore, the entire stock would be lost.

  Days filled with anxiety and trepidation dragged on—year after year. "Every time I return home, I have to act as if nothing’s wrong," says Liu Jingping, who, despite his scholarly demeanor, possesses remarkable psychological resilience. "There’s no way out anymore—so I’ll just have to brace myself and keep moving forward."

  While Liu Jingping stumbled through the bitter taste of selling tea, Fuding tea artisans who shared a similar journey were also walking the very same path.

  Cao Chuansai, also from Guanyang Town, was no exception. "When I first arrived in Spring City, I couldn’t even tell north from south—or east from west. People just ignored me altogether since they could see I was a newcomer." For a long time afterward, Cao Chuansai didn’t close a single deal. To cut costs, he teamed up with other tea traders he’d just met and rented space together in basements or budget-friendly hostels. Winters in Kunming brought bone-chilling winds; on days when temperatures plunged to around minus 7 or 8 degrees Celsius, Cao Chuansai would bundle up in his padded cotton jacket, carry bags of tea on his back, and head out onto the streets to hawk his wares. "There were times when I could only manage one meal a day—and after several months like that, I felt utterly drained, physically and mentally exhausted."

  Being new to the area, no one paid him the slightest attention—so not a single pound of his hundreds of pounds of tea managed to sell. As days slipped by, Cao Chuansai grew increasingly anxious, pacing back and forth like an ant on a hot pan.

  In the days that followed, Cao Chuansai left his busy footprints—and heard his lively cries as he hawked his wares—across Dali Prefecture, Honghe Prefecture, the city center, and its suburban areas. It wasn’t until 2006, when the second-phase project area of the Kunming Xiongda Tea Wholesale Market officially opened, that Cao Chuansai became one of the first tea merchants to set up shop there alongside several other tea traders.

  Get your footing and build your first fortune.

  Looking back now, the successive openings of several major tea markets in Kunming around 2006 finally gave these gypsy-like itinerant tea traders a permanent base to settle down and establish their operations.

  The days of standardized buying and selling—and focused, dedicated management—are finally here.

  With the successive openings of major tea markets like Xiongda in Kunming, tea merchants from across China—including those from Fuding—have flocked to the city’s bustling tea hubs, intensifying competition. This is exactly the platform Cao Chuansai has been eagerly anticipating after six years of navigating the challenging tea trade scene. Thanks to his established sales network and the solid business groundwork he laid over the past few years, Cao’s newly opened “Lao Tongzhi” tea shop quickly thrived, with his renowned “Lao Tongzhi” Pu-erh tea earning immediate market recognition—and sales skyrocketing as a result.

  Liu Jingping, who has navigated this journey, believes that after the market exploration phase from 2001 to 2003 and the challenging entrepreneurial period from 2004 to 2006, Fuding tea merchants have now essentially completed their initial accumulation of seed capital. Liu Jingping defines this primary capital as being within 5 million yuan.

  Liu Jingping believes that, starting now, tea merchants are moving toward a future of brand franchising—leveraging iconic traditional teas to drive growth. Ultimately, this shift is being propelled by market forces, enabling Fuding tea producers to advance and finally leave behind the chaotic era of "door-to-door sales."

  After more than a decade of accumulation, Fuding tea producers are beginning to make their presence felt in the expansive Yunnan market.

  In fact, during the era when many tea merchants were "carrying their tea into Spring City," Liu Jingping seemed to have quietly sensed that there were more opportunities available in the retail sales of tea.

  “Making tea means creating culture.” This is essentially Liu Jingping’s core philosophy in selling tea. By joining the “Haiwan” brand, Liu Jingping is determined to break away from the traditional, one-dimensional approach to tea production and sales, instead seamlessly integrating the tea industry with tea culture and tea technology.

  During this process, Liu Jingping also helped organize events such as Yunnan's first Pu'er Tea Festival and the Kunming Tea Art Performance Competition.

  "Scientific management has been awakened as a key driver in business development. 'Running a company requires having a core team of strategic advisors,' argues Liu Jingping. 'If we can turn tea into an industrialized product, it would open up a fantastic business opportunity.'"

  Yunnan Haiwan Tea Co., Ltd. was established in October 1999. The company is led and guided by Mr. Zou Bingliang, a seasoned Yunnan-based Pu-erh tea expert, former director of the Menghai Tea Factory, and a key contributor to the development of China's national standards for Pu-erh tea production—also honored with the prestigious title of Lifetime Achievement Master of Chinese Pu-erh Tea—and Mr. Lu Guoling.

  For long-term growth, Liu Jingping has actively implemented the Gulf brand’s networked information management system, setting a clear goal to become the benchmark for Kunming’s tea industry franchise model.

  We’ve seen tea companies—each one breaking away from traditional sales models—beginning to transform into soaring eagles ready to take flight.

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