It’s handpicked!
By offering a handpicked selection from over 150 tea gardens across Darjeeling, Assam, Kangra, the Nilgiris and Nepal, Teabox is wooing tea lovers across 111 countries. 2012formed company with a customer base of over 60,000 across the globe, plans to grow 2-3 times in the coming year, reveals Kaushal Dugar, CEO and founder of Teabox.
Teabox’s customer base is diverse group of people, says Dugar. But these customer do have an identity. “Typically, if you were to compare our customers with regular tea buyers, you would notice that our consumers are better educated, more sophisticated, better travelled, more adventurous, and more discerning,” said Dugar. He asserts that his claim about his client traits comes from his interactions with them as well as from other sources. The products of the company is priced at around Rs 5,000 per kg extending upto Rs 2.5 lakh per kg, with an average realisation of around Rs 25,000 – 30,000.
Revealing further details about his customers, Dugar said that their Indian customers are in the high income bracket and overseas clients tend to be in the middle and high income brackets. “These tea consumers are also engaging in fulfilling their need for learning, discovery, adventure, and experience. Teabox is geared to address this kind of customer segment. A segment which understands the value of pleasure.”
Teabox products are desired not just in the regular markets like the United States, the UK, Russia, Australia, Singapore and Hong Kong, but also by countries that are usually out of the purview of Indian companies. Teabox is also quenching the tea thirst of people in countries like Micronesian islands, Chile, Argentina and Iraq.
Apart from its loose leaf product line, it also supplies teaPacs. The current contribution of teaPacs is small compared to loose leaf product line. However, Dugar hopes that contribution of teaPacs will steadily increase. “We expect it to have a 2.5 times share by end of FY18 as compared to where we are today,” said Dugar while talking about teaPacs category which was introduced in 2016. “Approximately 85 per cent of the market and specifically countries like the US have teabags accounting for a high majority of consumption. It thus opens a significant base of new customers who value convenience and yet want to drink a high quality product. TeaPacs is strategically important for us because we are a B2C business and do not see any variation in the foreseeable future.”
The company claims to recover cost from sales of 20- 25 per cent of their stock. So sourcing is not highly dependent on working capital/advances. Teabox have invested heavily on back end in terms of cold storage, vacuum pack and teapac machines. “We have raised capital of USD 7 billion and of that, 40 per cent has been deployed in this infrastructure.”
The company stores around 2025 kg and right now the utilisation varies from 50-65 per cent. Dugar added that it is eyeing capital enhancement after six months, in conjunction with their visualised growth. “We have invested another 30-35 per cent in marketing. Our efforts will help us to be stable from infrastructure and operations point of view while we ride frontend/retail growth heavily.”
With international tea trade pegged at USD 50 billion while the world tea market is at USD125 billion, online distribution model will play a key role in reaching markets outside of India. “Online Distribution helps to access markets faster outside India. We have ramped up our operations significantly in the US and India. We might enter a couple of markets that hold strategic importance for us.”
The company is exploring the option of partnering with businesses whose client profile has a match with theirs. “We will get into partnerships wherever we see synergies in terms of the customer target group, product fit and will look to ramp that up significantly on geography basis,” Dugar asserted.