Tag: price crash

  • How Money Can Buy Your Taste. And Why You Should Buy Tea Anyway.

    How Money Can Buy Your Taste. And Why You Should Buy Tea Anyway.

    Universities are fascinating places to discuss how money cannot buy happiness. Perhaps because young people at that age are often strapped for cash and, at the same time, eager to prove that money can’t buy everything, not even that feeling, that harmony between duty and desire, between the passive acceptance of immediate pleasure and the attempt to avoid ephemeral satisfaction. The academies, until one secures a professorship, are also the venues where the idea of the hedonistic treadmill is strongly endorsed. This concept describes the human tendency to incessantly seek pleasures or material improvements without ever achieving lasting satisfaction. Even significant achievements, such as a career advancement, the purchase of a long-desired asset, or a personal milestone, generate an initial peak of satisfaction that nevertheless fades with habituation, returning the individual to their preexisting “set point” or “basal level of happiness.”

    I began to wonder, in conversation with colleagues, how one might temporarily yet continuously buy access to the upper floor of happiness, creating an emotional elevator that works on demand, but without the immediate dispersion typical of compulsive buying, and without short-term happiness eventually leading to long-term side effects. Honestly, I was very happy during my early university years, marked by precarious employment and mere subsistence, but I don’t think I’d want to return to those same conditions at this stage of my life. Yet I also don’t want, now that I’m aware of having greater purchasing power, to fall into the collector’s spiral, where happiness is repeatedly renewed and crumbles as one fills a substantial void or into the trap of social comparison, where one measures their value against others in a cultural context that celebrates material success. This phenomenon, as Festinger’s theory of social comparison suggests, has only made many people poorer and poorer. Then, for those of you, like me, who refuse to accept the reality proposed by Lykken and Tellegen, that 50%, and even more, of subjective happiness is hereditary, it becomes necessary to find something that rescues us from our desperate, ill-fated genetic inheritance of perpetual dissatisfaction. I would like to tell you that to govern happiness you must focus not on possession but on mastering your inner judgment; however, I am by no means the most spiritual person you’ll ever meet to be in a position to say that, and besides, I don’t feel like lying to you.

    If money cannot buy happiness, we have certainly noticed how it can at least purchase quality, or at the very least, the pretense of quality. I recall several studies, as well as numerous blind tastings, where it consistently emerged that wine, or tea, showed a positive correlation between price and quality, yet the relationship was always incredibly skewed. The most expensive product never ranked first, never. Now, in the Pu’er saga, we see how, as a common snack available everywhere, tea cakes priced at $1–2 per gram appear as if it were normal, as if quality resided only in those teas, and among the buyers of these cakes very few complain about the actual quality of these productions. Beyond the debatable nature of this phenomenon, there are reasons for it.

    The first is that these products do indeed embody quality, albeit not to the extent that justifies their exorbitant prices.

    The second, as trivial as it may seem, yet as current as a Rolex Submariner on a trust fund kid’s wrist, is that no one is willing to admit to themselves that they’ve burned through a third of their salary on a tea cake that didn’t overwhelm them with a mystical aura but was simply an excellent tea. This is the “sunk cost fallacy”, we recognize that it is irrational to persist in a failing project “because we have invested so much in it,” yet the pain or anger of admitting a loss paralyzes us, doesn’t it? When something is expensive, the link between price and pleasure becomes extremely strong; the price tag transforms into a vehicle for a symbolic narrative that promises a sort of redemption for the expense, an existential revenge. The more you spend, the more you believe you are accessing a “superior” pleasure, rarefied, almost transcendent, and this occurs even before the actual possession of the good, via dopaminergic anticipation.

    But the third, and most important, reason is that often the price demands attention. When you spend a lot, it is rare not to notice every smallest detail; every moment can become saturated with meaning. You’re willing to overdose on information just to testify that something is truly extraordinary. This happens even without resorting to selling your organs for a cake, but when you spend a lot, there is no doubt that even someone usually inattentive to every macro-detail would experience the situation differently. In short, both emotional and physical engagement reach their maximum.

    Tea in Asia is the apotheosis of agricultural art, and it is natural that people find far more to discuss about a Bi Yun Hao tea cake priced at $500 than about a Xiaguan tuocha costing $10. In the latter case, even if there were something worth discussing, the buyer might subconsciously suppress their thoughts, because it is socially expected that any good priced below a certain threshold has nothing to offer except a “daily squeeze” of repeated consumerism. Many believe that you cannot enter the elite with a ten-dollar purchase, right? But then, how can one leverage this perverse, consumerist vision to one’s advantage without selling both kidneys? Now I come to the point.

    What if we viewed price not as a determinant of the intrinsic quality of tea, but as a marker of a sacred boundary between the everyday and the consecrated moment, where money is not betrayed by the real quality (a quality that will never be proportional to the money spent in any case), nor idolized by those who have invested a fortune in what they consider the only way to achieve “true” pleasure? It would no longer be about chasing luxury or a social identity, but about intensifying the present regardless of other factors at play.

    To do this, there is no need to spend vast resources; it is enough to pay just a little more than what we consider “normal,” employing a critical yet functional hedonism in which that slight surplus serves as a cognitive bypass and taste criticism functions as a true tool in the search for real quality. Then, all that is needed is to unbox a tea cake and share it, with someone you love or with yourself on a difficult day, thereby consecrating the moment. And you can do this repeatedly, in a logic that transcends every commercial imposition.

    That “little bit more” translates into the symbolic gesture of surpassing the ordinary. If you think that isn’t enough, bear in mind that one aspect is the rational awareness of a cognitive bias, and another is overcoming it. It becomes akin to knowing about an optical illusion yet continuing to perceive it even after understanding the trick. Awareness of a bias triggers the analytical system, which is more laborious but corrective; however, it does not interfere with the creation of the bias itself—because biases are effects of evolutionary inertia, developed to survive in a context of cognitive sustainability, not to be right. Essentially, we live in a sort of metacognitive blindness, so why not exploit it.

    Let it be clear, this approach would not make extraordinary what is not, nor would it imbue something with an unreal quality it does not possess, but it would help remove many externally induced obstacles to accessing this generative mechanism.

    In addition, it would bypass what Byung-Chul Han defines as the “psychopolitics of consumption”, that is the colonization of emotions by the market, which transforms price into an indicator of sentimental intensity, a revealer of truth. Instead, a practice of ritualized happiness is built, as Bruckner would note, whereby a Pu’er tea cake becomes a pragmatic and positive fiction, an accessible simulacrum that does not promise the eternal happiness but guarantees a repeatable fragment of fulfillment.

  • Pu’er Price Collapse, Are We Heading For A New Crash?

    Pu’er Price Collapse, Are We Heading For A New Crash?

    I’ve always loved investigative journalism but I’ve always hated those catastrophic clickbait headlines that always seem to make things bigger than they really are, but there’s a phenomenon in the pu’er world that’s been going on for a little too long to be simply buried like a dog with its bone.

    Now, we all, or almost all, remember the bursting of the speculative bubble in 2007, where the pu’er market swelled exponentially overnight that spring only to falter in July and collapse over 70% by the end of the year, basically cutting the legs off an entire industry. Well, we may not be at those levels, but it doesn’t seem like the lesson has been learned, rather it seems like someone just put their shirt on inside out to hide the stain.

    What were the causes? Well, to simplify, let’s consider that 70% of purchases were motivated by investment and not by real consumption, production quintupled in 4 years, saturating the market, to which we add fraudulent practices of counterfeiting, manipulation of markets and auctions and crisis of confidence in the product, the source and the quality due to opaque practices dictated by the absence of clear regulation that was convenient for everyone, then we obtain what is a self-destructive economic logic based on artificial growth, completely disconnected from the fundamentals of the product.

    In the West we most likely think that Pu’er buyers have broken free from this dimension because we see a large part of them consuming the same tea they bought, which is partly true, but partly not. Many areas of Yunnan that have reached rationally unthinkable numbers, brands or editions that beat crazy prices have behind them a generative structure often of speculative nature that does not always have to do with scarcity, production costs or the quality of the tea.

    A while back I found myself tasting old samples or cakes from my collection that I had probably forgotten about. I tasted an old 2005 DaYi 7542, batch 501, along with some more recent production, a 2022 7542 and a 2022 Premium Peacock, both batch 01. I honestly can’t say they were bad teas, they were really good, but to what extent can you justify a crazy price, crazy especially when compared to those before 2015, for a basically “a little more than good” tea. This is not only true for DaYi, but let’s analyze for a moment the price trend of some famous productions. Among the most sought-after cakes in recent years there has been the 2003 Jin No.5 batch 201, in January 2021 its value was 1.45 million RMB/jiàn (84 cakes) while in January 2025 the value amounts to 1.1 million, lower than 5 years ago and above all far from the exorbitant price of 3.2 million in March 2021, same fate for the 2005 7542 (batch 501) which in February 2020 was 230.000 RMB /jiàn (84 cakes), reached 880.000 in February 2021 and then collapsed again at the beginning of this year to 300.000 RMB.

    In recent years DaYi has marketed numerous other special and prestigious productions, such as the 2201 Premium Peacock or the 2021 Golden Rhyme to counteract the erosion of the pu’er market prices, but without much success, the first had a value of 118.000 RMB / 42 cakes now collapsed to 61.500 RMB while the second which had reached 152.000 RMB / 28 cakes now touches “only” 33.000 RMB.

    So, in China there is a particular and complex economic situation and due to personal and corporate financial difficulties, those who invested in this type of goods have tried to divest from illiquid assets such as Pu’er. The tea market does not guarantee a quick sale (and this can be seen from the huge amount of cakes kept obsessively by those who bought them for this purpose) without even seeing a potential for short-term revaluation, and this has led to a greater supply than demand, which is why many recently produced cakes are and will be available in the future.

    Added to this is the real estate crisis triggered by the collapse of Evergrande in 2021, the real estate sector has traditionally absorbed a huge share of savings from Chinese families, who now see the value of their properties deflate, which has caused an erosion of perceived wealth. The liquidation, even at a loss, of pu’er tea to quickly recover liquidity and move a part of immovable money can only worsen the price situation.

    Let’s add a piece: in recent years some brands, attracted by demand, have pushed for an increase in production, not limiting themselves to a couple of pressing batches; with the drop in demand, the market is now flooded with a surplus of product and an inability of the market to absorb the supply.

    But above all, wage stagnation, a lack of robust welfare for which the capital of families is concentrated more on pension, salary and educational expenses and a slowdown in redistributive policies slow down or cancel the entry of new buyers into the market, a situation that brings us back to the last problem of the analysis: The collapse of the speculative segment.

    The cakes of large “investment” brands have suffered a 30-50% drop compared to the 2021-2022 peaks, especially for the post-2010 editions, a sign of the exhaustion of the speculative model, something already seen in 2007, but currently the situation is less dramatic. However, reliance on time is not a reassuring factor in the development of these phenomena, which can see prolonged stagnation as well as a sudden acceleration rather than their dissolution.

    Now I get to the point. For years, the “investment” market has functioned with a pseudo-pyramidal scheme: investors bought new and old editions waiting for others to enter after them, driving up prices. When the absence of new players becomes apparent, the system simply collapses, as the first to arrive only gain if new buyers arrive willing to pay higher prices (those who know the world of fine wines are probably not unfamiliar with this game). So prices collapse because there is no longer real demand to support them.

    The biggest problem with the collapse of speculative Pu’er is that as it increases in value it sometimes cause the price increase of raw material and “consumer” cakes even from small brands, it can have exactly the opposite impact on the local economy of the region, where many small producers depend on the sector, since the costs for harvesting, processing and storage of Pu’er increase accordingly, especially for the latter who do not benefit from economies of scale.

    In addition, many young people seem to give up on this type of purchase and the crisis of confidence due to several allegedly rigged auctions have not helped the image of this sector which in itself is already a niche.

    In this article, not all the main problems have been touched upon, for example, I have intentionally left out the problem of fakes (both new and old pu’er, both big brands and, especially currently, smaller brands) and that of fraud on the origin of the leaves, which represents a huge critical point.

    As far as pu’er consumers are concerned, the only possible logic is to form and create a personal standard that is totally independent from the logic of price, fashion and advertising of brands and sellers. If it is true that a low price does not bode well, it is also true that a high price does not provide any a priori guarantee on its real quality or on the truthfulness of its origin, and this applies to both Asian retailers and European sellers. Trust in a shop and in the people who run it still remains a fundamental prerequisite, as well as fighting speculative logic through greater criticism and greater detachment from trends that contribute nothing to an authoritative and well-founded personal education, nor do any good to a market that certainly no longer needs speculative logic (also considering the polarity of speculation, which could occur in a unipolar way in the West thanks to some retailers without it actually occurring in Asia). All very familiar advice to those of you who have been out here a while, nothing new from the early 2000s.

    To conclude, this trend of continuous increase in prices in a generalized way is not infinitely sustainable, and history unfortunately teaches this, especially in an uncertain global economic context. The future of the market will depend on the ability to balance price, quality and accessibility, avoiding speculative excesses and opening up to new consumers. If the sector is able to adapt, Pu’er will remain a valuable product, but with more balanced and less volatile prices. Companies must become ambassadors of transparency, for example by introducing blockchain certifications or declaring costs and margins so as to show how much is paid to farmers, as happens with some micro-roasteries in the coffee world. Consumers must act as ethical “gatekeepers” avoiding being carried away by the hype without evaluating the quality and institutions must guarantee clear, more stringent rules that absurdly no one seems to ask for (except to limit the use of fertilizers or other superficial environmental restrictions), clarify terms (e.g. gushu) so that they are internationally univocal and measurable as happens with European standards and denominations. All these things seem like utopia, but every now and then it’s good to say things out loud, they don’t even sound bad.

    *All prices in the article were taken from donghetea.com