TEA INDUSTRY

GROUP 3

Strategic Change Management

TEA INDUSTY
an overview

1. Indonesia is the 5th largest tea producer world wide

(right after India, China, Sri Lanka, and Kenya).
2. Drinking tea has become a culture in Indonesia.
3. Tea is a fragmented industry. There are many mediumsizes suppliers and local companies.
4. Due to the frequency of daily intake of tea for many
Indonesian, tea producers have come up with various
innovation on how tea could be served (with bottled
tea being the most recent one)
5. The Indonesian tea industry is highly fragile to changes
and impact from the condition and structure of the
international market.

TEA INDUSTY
Industry Structure

The Plantation

Stalk

Leaf

Woodcraft

Powder Tea

Tea Bags

Bottled Tea

PORTERS
APPROACH

INDUSTRY RIVALRY

among competitors/players:
High

MOST STOCKED BRAND:

PREMIUM BRAND (SPECIFIC MARKET)

1.
2.
3.
4.
5.

1.
2.
3.
4.

Teh Botol SOSRO

Niu Green Tea ABC Pres.
Fruit Tea SOSRO
Fresh Tea Coca Cola Amatil
Teh Pucuk Mayora

Price: IDR 2.5K 7K

Premium Ocha JJ Singapore

Indomaru Milk Tea Kirin
Pungency Tea - Kirin
ASSAM flavoured milk tea ASSAM

Price: IDR 12K 29.9K

EMERGING BRAND
1. Yeos Ocha Yeos
Price: IDR 5K

*) These are some of the brands playing within the industry. Other than this, tea product faces direct competition from
other bottled beverage drinks

BUYERS

Bargaining power
High
Since there are many competitors
offering the same products and
prices are low.
Costs of changing suppliers are
very little.

SUPPLIER

Bargaining Power
Low
Large number of supplier:
Tea grower are put under the
pressure to sell fresh leaf to
processing factories for low prices.
Low switching cost for factories.
Tea leaf growers are easily
substituted as there are many of
them.

TREATS

Of New Entrants
High*
Analysis of The Industry Barrier to Entry
1. Product differentiation is complicated since there is
already a huge variety
2. The more popular brand is definitively cheaper
probably thanks to their large production
3. Easy access to distribution channel.
4. Observation shows: number of international tea
brand is increasing. Government regulation on F&B
import this are neither difficult nor restraining.

*) There are some aspects to look at for this.

However, it is generally agreed that for LARGE
producers (e.g. SOSRO, Mayora, ABC, etc.) barriers
to entry are extremely low. Buyers also have quite the
power to integrate backward (making their own tea
brand, e.g. Addictea, Bubbletea, etc.)

THREATS

Of Substitutions
Medium*
Analysis of The Replaceability of the bottled tea:
1.

Other beverages (bottled) as a substitution product

This apply to similar bottled drink product, especially
Coffee. Coffee possess similar characteristic to tea and
also statisfy the same need.

2.

Coffee/Tea Caf as a substitution service

The youth-centered tea shops/caf/houses are in trend
lately. Players in this category consist of brands such as
Chat Time, PresoTea, etc.

THANK YOU

OBSERVATION
PHOTOS
Of Tea Brands