vccircle  |  APRIL 26, 2014  |  By: Sainul K Abudheen

TEABOX SEEKS TO DISRUPT 200-YEAR-OLD TEA INDUSTRY, CLAIMS TO HAVE SHIPPED 5M CUPS TO OVER 65 COUNTRIES

However, a few niche e-com firms have made their mark in the domestic as well as overseas markets and drew VC funding. Bangalore- and Singapore-based AsianTeaxpress Pte Ltd is such a venture, which, with its...

However, a few niche e-com firms have made their mark in the domestic as well as overseas markets and drew VC funding. Bangalore- and Singapore-based AsianTeaxpress Pte Ltd is such a venture, which, with its online tea retail brand Teabox, has scripted history overseas, within just two years of inception. “The conventional distribution chain causes large delays between the time of production and the time the teas hit the market, causing the quality of the teas to deteriorate and lose their aroma. Our presence at the source and capability to preserve the freshness of teas serve as our key differentiator,” said Kaushal Dugar, founder and CEO, Teabox. “This also challenges the ways of a 200-year-old industry, which has always relied on a large value chain consisting of multiple middlemen. It has hardly changed since the earliest British and Scottish planters first set up the estates,” Dugar said. Teas are sourced directly from plantations Teabox was originally started in 2012 as DarjeelingTeaXpress.com, which offered premium, fresh Darjeeling teas directly from sources. After gaining significant traction from various countries through word of mouth and organic search, the firm decided to scale the business further and then rebranded to Teabox. The founder claims that Teabox is the first global tea brand from India that delivers the world’s freshest teas sourced directly from the plantations in Darjeeling, Assam, Nilgiri & Kangra, and ships them to customers globally. By circumventing the conventional value chain and directly reaching out to customers, it has been able to deliver fresh teas in under a week’s time. To date, Teabox has shipped over five million tea cups in over 65 different countries, says Dugar.

The company has a fulfilment centre in Siliguri where the teas undergo a number of rigorous quality checks. The products are then vacuum packaged and stored in humidity-controlled environments. The startup also has on board experts to taste the tea. Markets, logistics and payments Teabox works primarily with DHL & Fedex to deliver the products. It also uses EMS and airmail to ship to Russia and other CIS (Commonwealth of Independent States) countries. However, its key target markets remain to be the US, Australia, Russia, Japan & South Korea. Customers can pay via credit/debit cards and also via Paypal. Its Russian entity also accepts payments via Webmoney. “India is not our primary focus, as more than 98 per cent of our customers are abroad. So, the global market will continue to be our focus, at least for the next few years. That said, we are optimistic about the domestic market as well,” Dugar said. Challenges and competition In Dugar’s view, building the next global tea brand from India online is challenging. “India is world’s second-largest producer and fourth-largest exporter of teas. Yet it lacks a home-grown premium global brand, unlike the well-known French wine or Scotch whisky, mainly due to its continued colonial tradition of reliance on retailers and distributors to market the teas,” Dugar said. Teabox is looking to close this gap by effectively channelling the capital and resources from a booming domestic e-commerce industry in India and by application of new-age technology and innovations in supply chain. Teabox faces competition mainly from traditional brick-and-mortar stores, which have traditionally held the monopoly over Indian loose leaf teas. Teabox says it is working on a number of initiatives to encourage this offline customer base to shift online. He claims that Teabox site offers a large selection of Indian teas from various regions and detailed, descriptive information about tastes, grades, flushes, customer reviews to educate and aid customers in choosing the teas. The company recently raised $1M from Accel Partners and Horizen Ventures to add new features such as subscription services to its portal, and expand the business to other countries. “Our next fulfilment centre is coming up in Guwahati for Assam teas. Our focus is to build the supply chain infrastructure and be present at all the tea growing regions through our own fulfilment centres and warehouses.” With 21 staff on board across multiple locations, the firm is now looking to hire people in the marketing and UI/UX verticals. The company is also looking to raise a fresh round of funding in a year’s time, Dugar said. .