A new brew: Tata takes Tetley to China, will sell it online through Alibaba
MUMBAI: About 300 years after the British East India company introduced tea plantations in India to kill Chinese monopoly on its trade, the Indian owners of a classic British tea brand are introducing it in China.
Tata Global Beverages Ltd (TGBL) has entered into a tie-up with e-commerce firm Alibaba to sell Tetley tea bags through the latter’s TMall business-to-consumer (B2C) marketplace. They were introduced late last year, said the company’s chief marketing officer Adil Ahmed.
“Alibaba and e-commerce is the beachhead to land the product in the market and create market awareness,” Ahmed said.
TGBL is bringing Tetley to new markets such as China and Malaysia to cover what Ahmed calls “white spaces”— tea consuming markets where it has not been present.
The company has ambitions of making revenue of $1 billion (₹6,508 crore) from the Tetley brand, Ahmed said, but did not specify a timeline.
Tetley has struggled to boost revenue in the past couple of years.
According to TGBL’s annual report, it accounted for 38% of its sales, or ₹2,793 crore in 2012-13. The comparable number for 2015-16 is ₹2,676 crore, explaining the lure of the $22 billion Chinese tea market.
However, selling tea in China, the world’s largest producer of the beverage, could be a tall order.
“Taking tea to China is like selling scotch to the Scots,” said Harish Bijoor, who runs an independent brand consultancy and had previously worked as vicepresident of marketing at Tata Coffee Ltd.
“China is a very difficult mar- ket. It is the origin market for tea, and sees diverse consumption from black and green tea to all kinds of oolong teas,” said Bijoor.
TGBL’s Ahmed is banking on the convenience and aspirational aspects of tea bags for the modern Chinese consumer. TGBL is also pitching the Britishness of the brand.
“China is primarily a green tea market,” Ahmed said. “People are getting bored of that green tea and the hugely ritualistic aspect of making tea. In fact, they are now wanting tea bags, which is considered aspirational. The Britishness and the expertise of our blenders are the two hooks that we will use in China,” he added.
To be sure, other British tea brands like Twinings are already present in China. Da Yi Tea Group is the largest player in the Chinese tea market with a 6% share, according to a 2017 Euromonitor report.
“Taking the ‘British’ and ‘affordable luxury’ angle is a good brand positioning strategy,” Bijoor said. “However, tea bags are now globally considered a dumbed-down way of drinking tea because it takes no effort to prepare.”
Tata is also looking to take Tetley to small grocery stores in China, although Ahmed declined to share details. He added that while Tetley’s sales volumes in China are low now, the company will look at manufacturing capacity dedicated to the market once the business scales up.