E commerce is rapidly emerging as a viable channel for Indian tea companies to take their tea to customers in India and across the world. One of the most interesting ventures in this space is Teabox, which retails tea via its dynamic and engaging website www.teabox.com. Even though tea is at the core of the venture founder and CEO Kaushal Dugar insists that Teabox is run more as a technology company, which has its headquarters in Bangalore – the heart of the Indian IT industry.
Two distinct experiences inspired Kaushal to set up Teabox. Hailing from a family that has been in the tea industry since decades, Kaushal was extremely fond of visiting Darjeeling’s tea gardens and sipping tea since childhood. He subsequently went on to complete his bachelor’s degree from Singapore Management University and travelled around the world. When he tasted tea in different parts of the world, he realised that the tea was nowhere like the garden fresh tea he used to enjoy in his childhood. The marketing insight here was that due to the various channels between the tea garden and the buyer including auction system, exporter, importer, wholesaler and retailer, tea took around six months to reach the buyer. By that time it loses its freshness and also becomes quite expensive due to the intermediaries involved.
To bring down the number of intermediaries and reduce the time to market, Teabox has developed a supply chain model of its own, where it controls the sourcing, distribution and marketing of tea. The company has set up sourcing centres near tea gardens in Darjeeling and Assam. The company ensures the freshest tea reaches these centres as Dugar explains, “If tea is produced on Monday, we get the samples by Monday evening. We decide on the same day whether we are going to buy the tea, based on 15-20 parameters.” Once the tea is selected, it is brought to the warehouse by Tuesday where the tea is cleaned, vacuum packed and stored. From the garden to this controlled environment the time taken is typically between 24-36 hours. From there the tea is directly shipped to customers. The company, which was formed in 2012, has shipped around 5 million cups so far to 62 countries. Fulfilment centres are now being set up in markets like Russia, US and Europe. Demand for the next season is ascertained through algorithms that are based on parameters like last season sales, the optimal price/demand equation, customer reviews for the tea, expected natural growth for the business, any external marketing push by Teabox and the ranking of the tea in consideration.
Besides reorienting the supply chain, Teabox undertakes focused marketing initiatives to fulfil its vision to become a global tea brand. Firstly the website has been developed in a very engaging format. The company hired wine tasters to write interesting and customer friendly descriptions of the tea. Teabox has started a subscription service wherein select samples of tea are sent to consumers on a monthly basis. Consumers are requested to rate the tea on a tasting card on parameters like body, aroma and quality. By the fourth or fifth month, Teabox gets a good idea about the taste palette of the customer, which can be used to send him the tea that he/she prefers.
Teabox, which recently got funding of US$ 1 million from Accel Partners and Horizen Ventures, expects to grow at a rate of 400-500 per cent in this financial year. For Dugar, however, the strategic perspective is more important – to make people understand the company’s value proposition of fresh tea and also introducing customers around the world to the best of Indian tea varieties. In this manner, the company is also effectively leveraging technology, as Dugar asserts, “to hand hold people through their tea education journey from a tea novice to a tea connoisseur”.