India Now - page 31

net to democratise the industry. Over
the course of the last two years, we’ve
delivered teas to 75 countries.” The list
includes countries which wouldn’t ordi-
narily figure in the list of tea-importing
countries, such as, the Micronesian
islands, Chile, Argentina and even
Iraq—Teabox is now opening the doors
to this obscure club by enabling custom-
ers from any part of the world to be able
to access premium quality, fresh teas.
Setting up Teabox required Dugar to
work on an international scale. This
involved setting up a worldwide logistics
network, domestic procurement and
logistics chain reducing the number of
intermediaries and dependencies, pack-
aging, and an understanding of inter-
national consumer tastes and markets
among other things. There was also the
need for a strong team which in a small
town like Siliguri was a challenge. Dugar
overcame this impediment by hiring
people from across the world and out-
sourcing many of the company’s opera-
tions. However, as he says, “The growth
of a startup hinges on the scalability
of the first few hires.” He considers it
“very lucky” that Teabox got on board
exceptionally talented and hardworking
individuals who are very self-driven and
focussed. “Over the last two years, we’ve
built a great team consisting of passion-
ate and driven individuals who believe
in the vision. And we are glad that our
investment partners are also fully on
board with our vision for this category,”
he remarks. The recent hires have come
in from top of the line companies in
the US and India and will work across
multiple functions, including consumer
research, product, design and technol-
ogy. The reason behind the hiring drive
is, as Dugar shares, “We have invested
in the idea of setting up a state of the
art R&D centre led and managed by
food technologists with a great deal of
experience in our target markets—a
first in tea retail. The company is also
reportedly exploring the idea of setting
up experiential stores in key target mar-
kets like US and Russia and wants to
set up new sourcing centres in Assam,
Kaushal Dugar
Founder & CEO, Teabox
Nilgiri and Kangra and a cold storage at
Siliguri. Besides, they are working on a
new brand image and on the processes
to enhance desktop and mobile user
experience for customers.
In a traditional market that still thrives
on handpicking to ensure perfection
and where auction is a necessity for
exporters to taste the tea and connois-
seurs to declare the quality of a tea
before it is picked up for export, Dugar
remains unfazed over the disadvantage
of his online model. He has the tech
advantage of algorithms that can predict
the demand for a particular variety, let
him know which tea will peak in which
season and through internal analysis of
past sales let him work on his pricing
strategy, communication strategy and
sales goals. The other advantage comes
from the knowledge of his market.
Tempting Teapot
“I started with an initial investment of
500,000 largely drawn frommy own
savings,” reveals Dugar talking about
the financial model. However, it was
not long before investors from across
the world came smelling the freshly
breweing success story. “For one, the
opportunity is huge. The global tea
market is currently valued at over US$
40–60 billion,” he gives the reason, add-
ing, “We’ve grown by 10 times over the
last one year.” Teabox seems to be on
the path to become the first consumer-
focused premium tea e-tailer with the
Made in India
brand and a worldwide
consumer base as it recently raised US$
6 million in Series A funding led by
JAFCO Asia and with participation from
Accel Partners, Keystone Group LP and
Dragoneer Investment Group. In 2014,
Teabox had US$ 1 million in seed fund-
ing from Accel Partners and Horizen
One of the investors, Robert Bass of
Keystone Group LP, first discovered
Teabox as a tea drinker. “He is a devout
tea drinker and he loved the product
so much that he went on to participate
in this round of investment. There
couldn’t have been a bigger testament
to the quality of our product,” he adds
proudly. The reason for Teabox becom-
ing an investors’ delight could also be in
the fact that India is experiencing “the
second wave of e-commerce” as Dugar
says. The first wave consisting of large
scale e-commerce companies such as
Flipkart or Amazon primarily solved for
convenience and did it by using levers
such as price, selection and good, reliable
customer support. However, they did
not fully replace the existing retailers.
“e-Commerce players like Teabox are part
of a second generation that is focussed
on the vertical integration of manufactur-
ing, branding, and distribution—while
upending the traditional retail model in
the process,” Dugar elaborates.
Technology has surely freed tea from
the traditional brick and mortar retail set
up enabling it to travel many thousand
miles in a remarkably short time span to
provide a consumer the desired morn-
ing cuppa. Tea is an experiential drink
with legendary therapeutic properties.
Companies like Teabox that have under-
stood this connect have the advantage
of greater control over consumer experi-
ence and hence could be the winners in
the longer term over players who gener-
ally favour volume over quality, ignoring
the emotional aspects of their products
and brands. It’s a much needed change
in a Teabox.
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