Small Farmers in a Big Country: Challenges Faced by Sunriver Tea

Given this industrial configuration, how can Sunriver Tea Co. Ltd. ("Sunriver Tea") make business breakthroughs and gain competitive advantage? In order to create differentiation, Sunriver Tea established the value proposition of "Small Place of Origin, Sunriver Tea". It attempted to create high-quality and differentiated tea products through the concept of "small place of origin". It also chose multi-category management to buildscale, rather than focusing on only one category, black tea. Challenges encountered by Sunriver Tea in implementing its strategy: First, in the tea planting process, Sunriver Tea restructured the supplier's value chain and tried to obtain high-quality tea garden resources through large investment. However, due to the difficulty in establishing agricultural products as high quality, it is difficult to reflect the value of high-quality tea from a high-quality place of origin by focusing on differentiated products based on place of origin. In the tea production process, Sunriver Tea restructured its internal value chain through automated and intelligent manufacturing, improving production efficiency and guaranteeing stability. However, Sunriver Tea's cost-reduction advantage is not obvious, due to low public awareness of the value of tea culture and its traditional handicraft, and the existence of many farmers and workshops in the market competing with one another. Second, the value was mainly delivered through CCTV advertising targeted at a broad range of customers, but it did not seem to have a strong impact on consumer awareness. In terms of sales, Sunriver Tea still chose traditional direct retail as the main channel as it was a start-up brand, and it was expensive to promote via e-commerce. Consumers were slow to recognize the cultural value delivered behind the "small place of origin".

• Competitive advantage
• Strategy