An average Indian adult drinks two cups of tea or chai every day. The top tea producers in the world are China and India. The ratio of cups of chai consumed to cups of coffee is 30:1 in India. However, surprisingly there are less than 300 chai cafes in the country as against more than 2K coffee shops.
Well, the supply-demand mismatch may soon be fading as tea entrepreneurs and large beverage companies are eyeing the tea business in the quick-service category and with existing players expanding to mega cities. Chaayos this week made its debut in Bengaluru with three cafes at Indiranagar, Phoenix Market City and Park Square Mall.
Chaayos Arrives Late In Bengaluru
With stores in nearly every major city, the company’s belated entry into Bengaluru has been the talk of many startup enthusiasts. Talking to Inc42 about Chaayos finally entering the Bengaluru market, where its competitor Chai Point has already gained a foothold with 80 stores across the city, Chaayos cofounder Raghav Verma says, “We were 15-20 years late into the cafe business itself. This is not a hundred per cent first-mover market. What we are serving is what the customer wants, which is fresh and customised chai. We call it the meri wali chai.”
This customisation is being enabled with facial recognition technology, which is being used to fulfil orders faster.
Founded in 2012, Chaayos now has 68 cafes across Delhi, Noida, Gurgaon, Faridabad, Chandigarh and Mumbai. “Potential of Bengaluru market is immense, and I am confident that we will earn a lot of love from our guests. We also expect delivery, which currently constitutes 20% of our overall business, to play a significant role in Bengaluru too,” said founder of Chaayos Nitin Saluja, in a press statement.
Chaayos plans to add 15 stores across Bengaluru by March 2020 including Orion Mall, Vega City Mall, Brookefield Mall, Prestige Trade Towers being some of them. “There is a definite need for this across the country. there is nobody else in the Bengaluru market who is serving fresh, personalised chai in a nice ambience,” he added.
80K Ways Of Making Chai
According to the tea board of India, increasing tea consumption in India has led to a rise in tea production. For the FY18, the production grew to 1325.05 Mn kgs, up from 1250.49 Mn kgs in FY19. Identifying the growth in the segment, Chaayos is leveraging the opportunity by focusing on customisation.
Chaayos lets guests choose exactly how to make their chai from more than 80K ways of making freshly brewed chai. Customising tea for every customer and serve them consistently is the biggest challenge and USP for Chaayos.
“We are going to stick to our USP in Bengaluru as well. We offer 80K ways in which you can make meri wali chai. We are the only chai café to serve a freshly brewed and handcrafted chai personalised to a guests specifications. Our strategy is clear, we are giving personalisation that nobody else in the market will provide,” Verma added.
Chaayos’ Chai Robots And Facial Recognition
Chaayos wanted to specialise in customisation to cater to the unique Indian palette. However, customisation at a large scale was a challenge and that’s when it came up with the idea of IoT-enabled chai robots, called Chai Monks.
The product, introduced in 2016, takes orders and makes the tea with less human intervention. It is integrated at point-of-sale through the cloud. “If you are doing all this manually, you have to invest a lot into training and there are chances of things going wrong at every step. Chai Monks helped us achieve consistency in chai making process. It replicates the process that person used to do by hand,” added Verma.
The end result has 80% machine and 20% human intervention. Customers can also order using dine-in app minutes before reaching their outlet and Chai Monk would keep the order ready when they enter the outlet making the process much quicker than most other offerings.
After Chai Monk became a game-changer for Chaayos, it recently introduced facial recognition for logging in including in its Bengaluru cafes. Regular customers can repeat orders and make payments without hassles of OTP. The use of facial recognition will reduce the time taken from two minutes to a mere 20 seconds.
“The technology recognises customer’s face with 99.9% effectiveness and once identified helps you repeat last order and make quick digital payment. The entire process is now seamless.”
Adding Global Tea Trends To Existing Business Model
Chaayos will not be pivoting its business model with the expansion into different cities and its focus is steady on opening locations in malls, high streets, tech parks, hospitals, educational institutes, metro stations and airports. The startup will look into customer feedback and may introduce region-specific food accordingly.
“We have a lot of street and comfort food on our menu and the tea is customisable, which will get a lot of acceptability. So we will not be going for region-specific menu. If we introduce a product here, we will launch it in Mumbai and Delhi as well,” said Verma. Twenty percent of Chaayos’ business comes from breakfast currently and Bengaluru seems to offer a lot of potential with a thriving breakfast culture.
Chaayos also wants to cash in on global trends such as shifting focus towards fitness and introduction of customised green and black tea. “One thing we have done is we have also started customising green teas and black teas. People are gravitating towards healthy teas globally. So we are doing that and unlike say a coffee Arabica, tea is neither intimidating nor burns a pocket,” he added