SUMMARY
Kolkata-based D2C tea startup Tearaja at present offers 200 varieties of products, sourcing directly from the popular tea destinations and delivering it to the customers across the country
At present, the company has been earning 90% of the revenue directly from its website, compared to pre-Covid times, where it was at 5%
Tearaja claims to be doubling its revenue and customer base YoY and doing close to 4000 orders on a monthly basis across categories
“Business is as good as dead, if you are not going digital.”
Manish Jain, founder of homegrown tea brand Tearaja, said those above words to us this week, but the same could have been said about Tearaja’s parent company way back in 2015. While today brands certainly have no option but to move to the D2C model to control the full customer experience and get revenue growth, for Tearaja it was simply about survival.
Coming from a legacy business called Jain Tea Co, Manish Jain and his wife Poonam Jain ventured into the D2C world under the brand name Tearaja in 2015. At the time, the D2C way of life for brands was unheard of, Manish recalled, especially in the retail-focused and traditional tea business. Jain claimed they recognised the emergence of digital-savvy Indian customers early on and tapped into the ecommerce boom that was being seen soon after the funding spree in this sector around 2014 and 2015.
“Additionally, we did not want to burn a lot of cash as our retail business was on the verge of bankruptcy,” Jain said, adding that D2C and online was the logical step for the business to survive then.
Tearaja Goes From Traditional to D2C
This reality is hitting many businesses today too, and to sustain and survive, they too are moving to the D2C way. Can Tearaja’s journey from a legacy brand and from a traditional tea store in Dalhousie two decades ago hold a lesson for today’s D2C brands?
“This experience of having served the customers offline has played a vital role in shaping our D2C business in terms of understanding the customers better, procuring fresh tea directly from tea estates, processing and delivering to the end customers, seamlessly.”
To begin its D2C ‘adventure’, the company launched two products — green and black tea — and only expanded its product portfolio after hearing market feedback and seeing the demand. Over time, it has added 200 varieties and flavours of tea, across various categories, from tea for daily consumption, tea for connoisseurs, and tea for ayurveda and medicinal purposes. The latest one is an immunity-focussed ‘Grandma’s Kadha Chai’ variety.
“Most of our products that are currently available on our platform have evolved because of our customers’ inputs. We have constantly listened to their feedback and incorporated them, which has, inevitably, helped us innovate, develop a newer range of products and customise packaging accordingly,” added Jain.
Why D2C Makes Sense Now
Today, a lot of new-generation brands are emerging in the space and are tapping into the ever-evolving consumer demand in all shapes and sizes. Besides Tearaja, India’s prominent tea brands in the market include Chai Point, Udyan Tea, Teabox and Chaayos among others. But the focus in recent months has been on reducing the dependency on aggregators and marketplaces.
To further boost its D2C credentials, Tearaja plans to launch a loyalty programme which would include same-day delivery, discounts and more, which would be usually paid to aggregators and marketplaces. This is expected to play a key role in retaining customers, something which is not guaranteed on ecommerce platforms given that each listing also shows the competition. Plus, ecommerce commissions hurt businesses, especially those that are relying particularly on online sales.
“The kind of commission that we used to pay to the ecommerce marketplace, we are now moving this benefit to our customers. We have always stayed away from discounting since the very beginning. Pre-Covid times, people used to ask us for discounts on our products. But, now that also seems to be changing as customers are not asking for it anymore,” Jain told Inc42.
The times are changing and partnering with marketplaces might have made sense when starting out, but now most mature customers want a unique experience and delivering this also makes a real difference in revenue.
“Pre-Covid times, 95% of our revenue used to come from ecommerce marketplaces, and remaining from our website. However, after Covid-19, there was no business for 15 days due to lockdown. Once the door for essentials was opened, the demand surged, and 90% of revenue started coming from our own website and 10% from the ecommerce marketplaces,” Jain claimed.
With orders piling up on a daily basis, the company strengthened its logistics and supply chain by partnering with various third-party logistics providers and creating multiple hubs across the country. It also shifted focus to tech and improving the UI/UX and upgrading the website base for seamless customer experience. “In fact, after a month of launching the kadha chai immunity range of tea products, we sold close to 4000 units.”
Most sales came from metro cities, followed by Tier 2 and Tier 3, accounting about 25-30% of total sales. Kolkata despite being the company’s home base, saw the least traction, contributing to 5%-10% of orders, but that’s because certain cities are slower in trusting D2C brands.
“A lot of customers are still reluctant to try online here in Kolkata as they prefer going to retail stores because of its abundance, compared to other cities like Mumbai, Delhi and Chennai where they have limited retail outlets,” Jain explained.
