Co-opetition Through the Asian Tea Alliance

Co-opetition Through the Asian Tea Alliance

Competition in business is fierce, as is the competition between large corporations as they strive to make more substantial profits is too. To make the competition more controllable, a number of countries and states have formed competition bureaus or commissions.

These entities aim to balance out the competition in terms of pricing, production costs, etc. As it stands, old business models may run out of time in a new business world that is racing towards a concept called co-opetition. What is co-opetition?

Meaning of co-opetition

Co-opetition, a term used for cooperative competition, can be summarized as “collaborate in the morning so you can compete in the afternoon.” In essence, it means that you cooperate with your competitors to encourage competition in your industry.

Co-opetition is the future of the tea industry, as the BBC pointed out because the future of the tea industry lies in open collaboration. The BBC pointed out that the largest tea companies are laying their competitiveness aside, and working on protecting the long-term future of their business by being transparent and authentic with one another.

The mandate of The Asian Tea Alliance

The Asian Tea Alliance has helped brake down borders and smooth the indifferences between big players in the tea industry in Asia.

The development of the co-opetition model in this industry has taken flight and through the implementation of various Memorandums of Understanding has made competitors see eye to eye. Here are some points on how they are aiming at revolutionizing this industry:

Promoting trade

The mandate of The Asian Tea Alliance is to promote business in the major markets of Europe, like Russia, that import tea valuing $500 million. The same applies to the U.S, which is a tea re-exporter showing rapid growth and a significant importer of tea.

The Asian Tea Alliance intends on being the first choice in tea trade globally and penetrating all international markets. By making tea affordable and continually available, even in bad seasons, they have taken steps towards being the world’s leader in tea trade.

The networking of exporters, packers, and cultivators will help come up with more financially savvy methods that can positively impact the costs of production.

Cultural exchange delegations

To build strong trade relationships, you have to physically meet with the stakeholders on the other end of the deal, and a lot can be derived from that exchange. For example, networking opportunities between high ranking officials and building relationships that might lead to proposals and agreements. Sri Lanka has used this to help ease the intensity of import restriction from certain countries like Japan.

Secure relationship building will also be facilitated by the hosting of at least one meeting per year. These meetings will involve all representatives from all of the organizations involved in The Asian Tea Alliance. These gatherings will strengthen friendship and allow more ideas to be brainstormed and planned accordingly for their implementation.

Exchanging technologies

The Asian Tea Alliance also promotes exchanging different industry-specific technologies that streamline the cultivation and production of tea. This is because this part of the tea industry is quite static when it comes to sharing information.

There is a considerable margin for improvement; for example, precision farming drones and other robotics and AI can be used to improve the tea industry. The countries that are expected to chip-in on this arena are China and Japan. Their advancement in the robotics sector and artificial intelligence position them to develop the technologies that are used in the agricultural industry.

Global sustainability

Climate change is crippling the tea industry, especially tea cultivators that are going through droughts, floods, and storms. The Asian Tea Alliance aims to solve that problem by creating oversupply for the global community through its co-opetition. This will make the global market more stable and reliable for the members of the alliance. The oversupply also makes prices drop which boosts sales margins.

Which countries are the beneficiaries

The key stakeholders in the Asian Tea Alliance are associations in the countries that produce massive volumes of tea, especially the cultivators and owners of tea plantations.

Those associations include the Indian tea association, the China Tea Marketing Association, the Indonesian Tea Marketing Association, the Sri Lanka Tea Board and the Japan Tea Association. All these associations that used to compete have now joined forces with one goal, to create sustainable development for their companies through co-opetition.

Non-Asian countries

Tea cultivation, packing and exporting doesn’t only happen in Asia.  There are many other countries that play an important role in this growing industry. How do all these countries benefit? Under the core group, the group governing the Alliance, other new organizations may be invited to be observers or members that are not in Asia.

Organizations that may benefit from this arrangement are Tea Boards, Research Institutions government entities, tea manufacturers, tea exporters, and other industry experts.

The future…

This Asian Tea Alliance is working on changing the way the tea markets work and focuses on building international co-opetition by being a catalyst for fruitful exchanges. The cultural exchanges from delegations will make a huge difference in more people being interested in coffee due to the fused cultures.

The cost reductions will impact the consumption of coffee because these cost reductions should also reflect on the retail price of tea. Also, innovative technology ideas will make tea farming more effective and appealing to youth. This will result in direct skills transfer and sustainable growth and development in the agricultural sector.

The use of technology in agriculture will also save our environmental resources and contribute to efforts to save this planet. The Asian Tea Alliance is also ready to deal with the crippling effects of natural disasters such as floods, drought, and storms. This makes the tea industry less volatile in times of distress.

Although this co-opetition may seem focused on the Asian market solely, the results will be felt on an international scale. Also, through the initiative of inviting other countries, it might cause those countries to start their own co-opetitions.

 

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