Pest Analysis for China Black Tea Industry

Before we enter the new market, we need to understand well about targeted country's 4main factors such as Political, Economic, Social and Technological. Because we have to ensure that our new target market is right market for our product and our marketing strategies must be appropriate, effective and efficient with new target market.

Political Factors

Until now China has been under communist party, so that their politic is very stable. Political stabilities can derive and facilitate to increase the foreign direct investment. When country's FDI increase, country's domestic GDP and job opportunities also increase automatically. Hence unemployment rate and inflation will decrease. In here one thing we need to consider is China's Rules and Regulations are not very transparent and absolute. In this trade one of the greatest advantages for our product is India and China has free trade agreement. As a result there are no high trade barriers such as taxation, traffic; licensing and custom duty fees might not be too high in this trade.

Economic Factors

We can see the China's Economic factors as China is a world largest tea producer country and also a world largest recipient of foreign capital. Moreover China joined the WTO since 2001 and contributed the rapid growth in Export, Import and FDI. But when we analyzed their domestic competitors, one chance we can see for our product is even china has 70,000 thousand tea enterprises; there is no global well-known brand in international tea industry. Moreover annually China bought 200 million kg black tea from India. Based on these factors, we can consider as china market has black tea huge demand from oversea and especially from India.

Social and Cultural Factors

China is the world largest population country and it has over 13 billion peoples. One main social and culture factor support us to enter the china black tea market which is almost 95% Chinese people have a habit to drink tea. Besides, Black tea Nutrients also has many benefits for health especially it is good for heart disease, diabetes and it can prevents the cancer. Black tea is suitable not only for both gender, every ages ranges and also for daily consume.

Technological Factors

Nowadays china become transform from manufacture country to innovation country. As a consequence, China's economy also shifts from labor intensive economy to capital intensive economy. From here, we can aspect that china may need more agricultural products from foreign country especially tea product because tea is not the basic agricultural products like rice, bean.

Based on PEST analysis, our company decided to enter the china tea market with black tea and we will choose the suitable marketing strategies which are appropriate with these main four factors.