Tea is part of the culture of Asia Pacific with people in China celebrating tea consumption as ancient as history itself. In 2025, total retail sales of brewed tea in the Asia Pacific reached 183 billion litres with a steady growth of 3% over 2020 to 2025. (see Chart 1.0)
Tea consumption has now moved from ‘tradition’ to ‘lifestyle-driven’ as consumers relate the drinking of tea to addressing their wellbeing, mood and self-expression. Demand has become so sophisticated that tea producers are now looking at distinctive flavors and blends, while hoping to engage more with tea drinkers to offer them unique experiences from color to tea presentations.
Although tea is trailing coffee in terms of innovation and value development, it is following the same trajectory as tea producers seek to develop unique varieties, emphasise on premiumisation, while looking for ways to spur innovations from milk tea to RTD tea, infusion tea to coffee-style tea lattes creating a multi-sensory appeal to this region’s ‘hard to please’ consumers.
The growing demand for tea in this region has also led to a growing number of Chinese tea brands such as Heytea and Mixue to expand overseas particularly into Southeast Asia. Already facing stiff competition in mainland China, these brands are making huge impact in the region as they seek to scale up rapidly and invest heavily in marketing and social media platform to connect with the younger consumers.
As the Asia Pacific market is also moving towards saturation, tea players in Asia are now looking at new markets like the US and Europe to expand, where disposable incomes are much higher while there is also a growing familiarity with milk tea and other tea products. Nevertheless, these brands also face challenges like higher operational costs from rent to labor.
