Tea Goes The Online Retail Way

Indian tea sellers fire their kettles and get ready to brew different blends

Published: 27th July 2014 06:00 AM  |   Last Updated: 27th July 2014 09:16 AM   |  A+A-

Goodwyn Teas’ Rohan Sirohia, 29: Develops herbal teas for the wellness and hotel industry

Beveragewala’s Manish Hada, 29: Makes teas from dispersed makers available on one site

TeaBox’s Kaushal Dugar, 31: Uses tech to keep exports fresh

Tea Trunk’s Snigdha Manchanda, 30: Arranges online gifting of rare Indian teas in 25 countries

Governments may rise and fall, times and attitudes    change, but tea continues to awaken India’s conscience by dawn and give it a second wind at dusk. With India consuming 75-80 per cent of its own produce and exports being unable to keep up with the competition from Kenya and Sri Lanka, local tea producers and marketers have traditionally focused their energies on catering to domestic demand. The domestic market is witnessing two trends. While big players like Hindustan Unilever (HUL) and Tata Tea are diversifying into wellness teas like white and green, smaller players are reaching out to a niche market through online retailing of gourmet blends, and faster delivery of high-quality tea. It’s not just young entrepreneurs who are trying to change the game. In May 2014, Golden Tips Global Ltd, which owns the brands Nathmulls and Kho-cha, launched its first online retail store, World Tea Room. It offers more than a hundred gourmet leaf tea blends sourced from Vietnam, China, the US, Japan, Egypt, Germany and South Africa along with rare Indian blends. Why should an established company like Global Tips, which has been marketing single origin teas from India since 1933, suddenly embrace specialty teas that constitute under 5 per cent of India’s total tea consumption? Perhaps because even 5 per cent of India’s annual consumption figure of 1,200 million kg works out to be 60 million kg. Even though CTC (cut, twist and curl) tea controls 80 per cent of the market, specialty teas are growing at the rate of 25 per cent annually.  

“The domestic market is an increasingly discerning one. We are playing across the consumer pyramid and are constantly investing to grow newer segments in categories such as tea bags and iced tea,” says a spokesperson for HUL, which owns Brooke Bond, Taj Mahal and Lipton. A similar scene is playing out at Tata Tea. Earlier this year, Tata brand Tetley launched six flavours of green tea with an aggressive pan-India campaign titled ‘Andar wala snaan’. “From our market study, we can tell that a lot of Indian consumers are incorporating wellness products into their daily diet regime,” says Vikram Grover, vice-president, marketing, India & South Asia. In India, growth of tea bags is 10 per cent per annum.

Aap Ki Pasand, 33 year old family-run tea boutique in Daryaganj, New Delhi, has a similar story to tell. It has been supplying its blends to 7, Race Course Road and Rashtrapati Bhavan for the last 22 years and is now expanding into the online retail space under the guidance of Nikhil Kapur (30) and Suhail Kapur (27). The brothers inherited the business, alongwith its definitive elite clientele, from their father a few years ago. Under the brand name San Cha, the company is a registered tea auction buyer, which is an exclusive and restricted list with the Tea Board of India. This allows access to over 80 per cent of Indian teas through five major auction centres. “Online retail has been growing 30 per cent year on year. It is currently five per cent of our business but is expected to expand exponentially in the coming years,” says Suhail.

Aside from retailing gourmet and assorted teas online, Goa-based Tea Trunk organises regular tasting events for corporates and students to generate awareness about Indian teas and also promotes itself as a gifting portal. “By conducting thematic high teas, we educate people about the basics, like the difference between Darjeeling and Assam tea,” says Snigdha Manchanda who founded the e-store last year. Her company prides itself on getting a steady inflow of orders from 25 countries. “Our average order size is `800 and we have a returning clientele of 65 per cent. We are looking at a very engaged audience who enjoy the palatable flavours of medicinal teas,” she adds.

Kolkata based Rohan Sirohia’s family owns 9,000 acre of Assam’s plantations that has been supplying teas to mass retailers like Tata and HUL since 1987. Sirohia converted five per cent of his family business into brand Goodwyn in 2011. “By putting single origin teas in exquisite packaging, we offer a finished product that a young and educated market is more ready to accept,” says Sirohia. The brand now retails online and through 800 retail outlets in Bangalore, Hyderabad, Delhi and Chandigarh. It also supplies to more than 50 hotels, cafe chains, IT and pharma companies. Caffeine-free teas have caught on with the wellness industry that is expected to reach `1 trillion in 2015. Goodwyn specialises in organic green teas. “Our company is more than doubling its revenues every year and should close at `4 crore this fiscal, thereby breaking even. Next year, we are targeting revenues of `10 crore,” beams Sirohia.   

 Meanwhile, in Gurgaon, management graduate Manish Hada has started Beveragewala.com with his wife Puja, with the express purpose of making a variety of teas available to clients on a single portal. “The tea market is scattered. Brands are unable to find the right retail medium. So, we decided to put over 50 brands and 600 products in one place and create a culture of convenience for the tea-junkie,” says Hada, who launched the company in March. Since its inception, the company has completed over 500 orders and is taking 10 orders per day. “Our average ticket size has increased to over `500 per order, taking our total revenue to `3.5 lakh,” Hada is hopeful of achieving a target of 1,000 orders in a running month within a year. 

 In Siliguri, Kaushal Dugar’s e-commerce startup Teabox is steaming ahead. In March, Dugar raised $1 million funding through Accel Partners. Now, with the capital in place, the company plans to expand its customer and revenue base by 300-500 per cent within the next 12 months. The Teabox tale started in 2012, when Dugar decided to “reconstruct” the 200-year-old industry. “Typically, once the tea is plucked, it takes about six to seven months to pass through the processes of auctioning and transporting. By the time it reaches the end consumer, its natural freshness has suffered a fair amount,” cautions Dugar. Teabox set out to change this by opening up sourcing centres in Siliguri and Guwahati, cutting out the middle men and identifying efficient service providers to deliver the products intact and within a minimum time frame. Today, the company ships to 75 countries and focuses on robust packaging techniques. The company retails 165 single estate teas, the largest collection with any brand in the world.

Who cares about coffee beans, when there are tea leaves waiting to be whiffed.

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