Teahouses still lack that winning blend

As the world's largest coffee chain, US brand Starbucks is planning to have 1,500 stores in China by 2015.

Many cafe chains have shown flexibility in seeking younger and low-income consumers by selling both tea and coffee.

Crabbe said: "Given that the cafe chains continue to successfully sell tea to their core younger consumer market, there is evidence that there could be potential in developing branded, franchised chains of teahouses with a broader consumer appeal."

Han Miaomiao, a 34-year-old middle-income white-collar worker, said she prefers to go to a cafe for a cup of coffee instead of taking tea.

"I like both green tea and Starbucks coffee, but I think drinking tea at a teahouse is something older people do. If I want to drink tea, I can serve myself at home."

Coffee chains only started appearing in China in the late 1990s, but have since grown rapidly.

Teahouses are generally viewed as leisurely places where the elderly gather to chat and play cards, with their outdated interiors and management style deterring younger customers.

The report said there is an increasing trend for cafes and teahouses to sell each other's drinks, and this crossover is extending into fusion food, following a wider trend in the catering market.

Alisa Gu, insight manager with Mintel, said that because Chinese people are very familiar with tea, they can drink any kind of tea they like at home.

But she suggested that teahouses pay more attention to providing a cozy but less high-end environment for consumers.

"I would like to go if teahouses offer a similar service as Starbucks does, with affordable prices," Han said.

Zhu Lingqing in Shanghai contributed to this story.

wang_ying@chinadaily.com.cn