Coronavirus (COVID 19) Pandemic & Puerh Consumer Confidence

*I wrote the rough draft of this last week before the world was flipped upside down.  Some of this is a lot more obvious now that a week has passed…

There was a wave of initial posts debunking the idea of the Coronavirus being spread in tea orders.  Common logic further supported by scientific probabilities make this one a real long shot.  However there are many deeper topics of discussion about how the Novel Coronavirus has already and may continue to impact the world of puerh…

The shipping delays must have impacted business.  This was the first and most obvious impact of the outbreak.  The Western vendors that seemed hardest hit, from what I can tell, are white2tea and Tea Urchin.  Famous tea wearhousing area Guangzhou has been the second hardest hit province with of course Wuhan being the first.  White2tea’s warehouse is in Guangzhou, the only of the Western puerh vendors to be located there.  The authorities prohibited white2tea to ship for weeks and this must have hit Paul’s bottom line.  Tea Urchin also put up a warning that their packages are shipping out much slower.  Other vendors like Yunnan Sourcing in Kunming seemed much less affected at this time.

There is also the problem of brand association to the Coronavirus.  There have been hundreds of articles posted about the effect this is having on Corona Beer although the results don’t seem to be as clear as the early articles suggest.  In a broader sense all things “Chinese” could be effected this includes Chinese tea such as puerh.  The effect is unconscious as people illogically attach a perceived threat to the pictures they first saw of Wuhan.  This could slightly impact sales but is unlikely to cause much damage.

Then there is the damage that could be caused by a more direct association of a specific brand to the Coronavirus.  This is maybe the threat that white2tea was under especially during the shipping ban.  They ran the risk of being labeled “the Coronavirus puerh brand” if the brand starts to be associated with completely unrelated negativity.  Paul did something super interesting and just basically pulled the plug on all his social media for weeks on end during the peak crisis and shipping delay.  From a business and marketing perspective this seemed like the right thing to do to avoid continuous chatter and association to the Coronavirus.  It also goes to show that social media isn’t just fun connections to the customer.  For Paul, its mainly simply marketing otherwise he would have continued the chatter.  No question Paul was fielding lots of questions in private messages and emails out of public view.  I think puerh drinkers are too smart for these negative associations and I hope they will come out strong to support white2tea in its spring release.

****Looking back now with consumer confidence quite low this week, I wonder if Paul regrets not aggressively marketing at that time.  He might have sat idle during an opportune calm before the storm?***

The Novel Coronavirus is starting to effect markets.  It wouldn’t surprise me this year that the pressure the virus outbreak is putting on markets might actually result in lower prices for 2020 maocha.  This would be the first time since the puerh bubble popped and I think it might happen.  If the season produces a good product some Western vendors might take advantage of the lower maocha prices and stock up if they have the funds to ride things out and the stomach to dive head first into the risk.

The other thing is that consumer confidence might be impacted and sales of puerh might suffer.  Puerh is a luxury.  No one needs puerh to live and luxuries are the first thing to suffer as consumer confidence wanes.  Alternatively, brands like Dayi might go up in value as they may be used as a hedge as a commenter mentioned a few years ago.

I’ve been through this sort of thing before during the Great Recession (Dec 2007-June 2009).  The one thing that really annoys me when people talk about the puerh bubble bursting is that they never put it in the wider context of what was going on at the time, which was the biggest recession of our generation.  Yeah, of course you should have bought up a bunch puerh at that time but consumer confidence was the lowest in decades.  Back in 2008, 2009, 2010 I pretty much stopped buying tongs of puerh and drank up some aged and semi aged puerh.  If you look back on my blog I was drinking lots of Korean green tea and Balhyocha and even Darjeeling.  Anyways, my point is that I was buying way, way less tea and spending way way less money on tea during this time.  I was buying more drink now tea and less tea that required aging (although the young kids these day will drink that stuff young now).

Its feels like it’s all happening again… I don’t know if the bubble will burst but definitely things are slowing.  Personally, it’s starting to financially affect our family as we are bringing in 15% less the two weeks before last.  Last week is 25% down and well this week aren’t looking good either.  It’s enough that I didn’t go through with a puerh purchase that I was planning… and at a time when I’ve already said that I probably have enough puerh to last me a long long time… this might be the straw that broke the puerh buyers back… hahha…

If it’s happening to me, it’s probably happening to others too…

***There is nothing like a little consumer confidence issue to get our beloved puerh vendors back on their A game.  Two vendors came out fast over the last few days.  It seems like our favorite Zen monk, David and always awesomely pleasant, Kathy, from the Essence of Tea got things going with a puerh cake give away.  Paul of white2tea did an amazing job at putting together a much more user friendlyand practical site.  We got to support these people and the other vendors too if we feel we can…

There is lots to think about… like the fact that there are many people who will lose their lives from this… this makes the whole topic seem pretty insignificant in the grand scheme of things I suppose.

I going back to the tea table and drinking me some good puerh…

Stay well.

Peace