India is the world’s 4th largest exporter and 2nd largest producer of tea. Established by the East India Company, the industry in India is about 150 years old, but it still continues to follow the methods and practices setup by them.
The entire chain of the industry is a complete mess and consists of a range of middle men including brokers, importers, wholesalers, distributors, etc…
Due to this mess, a pack of tea has to cross a long journey of about 3-6 months from the gardens to the consumers.
What is Teabox?
Teabox is an online tea shop which is based in Siliguri in Darjeeling, the heart of India’s tea-growing region that connects tea to people.
It is an online store that works directly with over 200 plantations in India and Nepal, and sells tea to customers in 75 countries.
The company claims to have a selection of more than 100 varieties of tea some of which include – Black, Green, White, Oolong, Chai, Blends, from Regions including – Darjeeling, Assam, Nepal, Nilgiris, North-East, Kangra, etc…
Teabox has its own storage facilities near to all the plantations and also handles the distribution, supply, storage and logistics all by itself. Due to this kind of arrangement, they are able to drastically speed up the process and reduce the time taken for tea to reach customers.
Traditionally, the process used to take months because of the long chain of players that are involved in picking, sampling selling, stocking etc… but cutting out all the middlemen, Teabox delivers its orders in a matter of a week.
Let’s give you insights on how their process works?
To begin with –Teabox sources orthodox long leaves of tea, instead of the commercial tea dust that is manufactured by traditional CTC method.
In the selection process, the company first receives samples which go for tasting to their tea experts. The colour, the dry leaf, the appearance, the aroma, the presence of foreign particles, old leaves, brewed leaves, etc. are checked during this process. Post this, the tea that is most liked goes to the testing process of its moisture, to check its contamination.
Overall, their tea experts play the most important role due to their experience, in sorting out the best tea from the bulk by giving their valuable insights. Only when a tea passes all these criteria’s is when Teabox buys that tea for further purchase.
After the completion of the selection process; the teas then go through another round of picking and sorting process. Here, the teas are first cleaned again and are sorted manually. Then, the broken leaves are removed and only the fuller, longer and freshest leaves are selected. Along with that, the stalk weeds that cause bitterness are also removed from the lot.
This highly selective manual procedure helps Teabox choose and bring out the richness and flavour in the teas.
Post this – the teas go through the Packaging process!
The four biggest enemies of tea are – moisture, light, heat and oxygen, and soon after the manufacturing, the tea starts deteriorating very fast for the first 6 weeks, and looses flavour, aroma and its freshness as well. And before it becomes flat, it also loses its sparkle and then turns completely dead in a few months too.
The only and best possible solution to avert this is to store the teas in vacuum packaging. Vacuum packaging makes sure that the freshness, flavour and colour of the tea are maintained and that the customers get factory fresh tea.
Other than that, earlier teas had to go through a long journey before reaching the customers, thus, loosing out on quality and freshness. Therefore, to ensure the best possibility and freshness, Teabox also cuts short the long five-stage process to two, making the delivery in a week’s time.
The tea is vacuum packed and sealed in opaque wraps, and then shipped to customers within 48 hours of its production, unlike the traditional methods which involved retail storage period of 3–6 months.
Talking about their Shipping Process – Teabox delivers the tea pack in roughly 3-5 business days to any location in the world.
Their domestic delivery of Teabox is taken care by either – Blue Dart, DTDC or First Flight couriers; whereas, they have partnered with DHL/FedEx, Overnite Express-SPSR, EMS (India Post) or Air Mail, to handle their international shipping.
What Kind of Approach & Strategies Have They Adopted?
To begin with – Teabox is a business model that manufactures the product here in India, and sells them majorly to customers outside India.
Now Teabox since long has been using various strategies to maintain and grow their customer base, some of these include – ‘Tea Subscription Program’ (offering samples of various types of tea on a monthly basis), Offering high-end teas at discounted rates to established brands like Twinings and upscale European, Asian and American tea salons, etc…
But beyond these, what has helped them the most is Rebranding and Change in Approach!
The company was originally founded as Darjeeling TeaXpress in 2012.
After two years since their initiation, they could see that their brand identity lacked depth, and the character of the brand wasn’t coming across as it should have. Hence in 2014, they decided to scale up their business and thought of repositioning and redesigning their brand and brand identity.
The idea was not to merely re-design the website and revamp the packaging, but they wanted their product to communicate with the customers and tell them who Teabox was more clearly. To do so – they hired Pentagram (world’s largest independent design consultancy).
This change in their strategy has worked wonders for them…
Talking about their approach: – Teabox believes that their approach is what sets them apart! Unlike the large corporates, who continue to work on the age-old models, Teabox has gone few steps ahead to create their own model.
They have not only created an entirely new supply chain model, but have also chosen to use technology instead of the traditional brick-and-mortar setup, to reach more consumers.
Taking a cue from the successful wine industry, Teabox offers online descriptions for its products by the experts. Teabox’s website presents tea like wine literally. When you select a tea, you can see the garden where it originated, time of bloom and date of plucking, as done by vineyards. You will also find detailed instructions and tasting notes given under every Tea that is presented.
But what truly sets Teabox apart, is their use of technology to enable them to understand their customers more effectively. Based on your purchasing history, their algorithms suggest other teas that you may like, and to add to that, every shipment that you receive also includes a sample of another tea as well.
Other than that, Teabox also uses an algorithm-based personalised tea service wherein you have to take a survey, which then matches your characteristics to that of a tea, and delivers a match of the best teas that would suit you. Initially, the accuracy rate is of over 35%, which further zooms up to 90% after the third order placement.
Just like other eCommerce sites, Teabox also uses technology for their online operations, wherein, Algorithms predict the demand, based on factors such as past sales, internal ranking of tea varieties, pricing, etc…
Who Leads The Brand?
Kaushal Dugar is the founder of Teabox. He was born and raised in Siliguri in Darjeeling. Darjeeling, a place located in the foothills of the Himalayas, is known to be heart of heart of India’s tea-growing region, with tea plantations at every nook-and-corner.
He belonged to family which had trade connections in the Tea industry since decades. His father was supplier of all the needs and resources including machines, parts, irrigation equipment, etc to the tea gardens.
Kaushal too learned the trade from his father. He used to spend his childhood summers on tea plantations in Assam and Darjeeling along with his father and used to learn the business.
He became an entrepreneur at an early age of 6. He saw that his friends loved comic books, and hence, started lending comic books in exchange for some candy.
Later, Kaushal moved to Singapore to pursue his Bachelor’s in Business Management, Finance, Marketing from the Singapore Management University in 2002.
Soon after he completed his studies, Kaushal went on to found his first official venture called “GAR Services Pte. Ltd” in March 2006. The company was about IT / Electronic waste management and also provided affordable branded refurbished computers for lower income groups in India Singapore.
Post this stint of his, Kaushal joined KPMG in Singapore as an Associate in 2007 and went on to get promoted to a Senior Associate in the next one year. His roughly two year stint at KPMG including tasks such as Pricing Strategy, Forecasting Financial Statements, Financial Modelling, Due Diligence, Negotiations, Human Resources Deployment, Advisory, etc…
After gaining the relevant experience, Kaushal then again decided to venture out. He founded ‘Books To Read’ – A non-profit aimed to help primary & secondary school children get access to books in developing nations. He founded this venture in 2008 and still continues to run it.
Moving on! In 2010, Kaushal then founded ‘Sandbox Network’ – a global community of inspiring young achievers and innovators under the age of 30, to connect them to each other, to fulfil each other’s needs and purposes. He continues to run this community.
And then finally, he landed to his true calling in 2012. He founded Teabox (earlier known as Darjeeling TeaXpress).
And the rest is history!
How Has Their Growth Been So Far?
So Kaushal had founded Darjeeling TeaXpress with less than $33,000 in 2012, with an aim to sell fresh Darjeeling Tea. He had also created an online portal that helped him export Darjeeling tea worldwide.
The Production, post production and packaging was set up in Siliguri. At this point, Darjeeling TeaXpress did not have any offline presence and only sold Darjeeling tea.
Soon, they also began expanding this product range and also added teas from Assam, Niligiri and Nepal, which eventually led to the formation of Teabox in October 2013.
Around the same time, Kaushal was also in search of an able e-commerce partner who could help the company to reach its potential consumers on a global scale, and in 2014, he completed his search with ‘Accel Partners’. Accel decided to fund Teabox with their first round investment $1 Mn in 2014.
While at it, Teabox also went through an overall change of design, look-and-feel, branding and approach. The website of Teabox was now made available in multiple languages, including Russian, and Chinese.
Their focus had now changed too. On one end, they were targeting the tea connoisseurs, who were very happy to have an access to teas that were otherwise hard to procure, and the fact that these teas were being made available to them in a matter of days.
While on the other end, they were targeting the masses in general. These were neither connoisseurs nor experts. They drank tea out of complete randomness, with absolutely no experience beyond what the supermarket teas could offer. Kaushal realised that, this audience was rather confused and unclear with the options they found on the site, because they barely understood the difference.
For them, they introduced subscription program called ‘Teabox Fresh Beginnings’ in may 2014. Basically, members used to receive samples of various types of tea on a monthly basis. Through their subscription program, they also performed surveys and took customer feedback to understand the areas of improvement.
Beyond addressing the problem of convenience, they wanted to solve a bigger problem at large, i.e. discovering the right kinds of teas. And to do so, they started the world’s first (patent-pending) personalised ‘tea club’.
This club basically uses a machine-learning algorithm which asks some very common questions and based on the answers it receives; it helps a tea novice to understand the kinds of teas they might want to try.
By June 2014 – Teabox had reached to point where it already had sold 10 million cups worth of tea to customers in 65 countries, and accounted for a team of 20 employees. Their growth rate at this point was somewhere between 300$ and 500%, and had also crossed $1 Mn in annual revenues as well. Their major business came from East Asia and North America.
In a matter of a year or rather presently, these developments have increased by manifolds. Teabox has opened another office in Bangalore which houses the technology, sales and marketing teams, with an overall strength of 35 people.
They also managed to raise another $6 Mn from JAFCO Asia, Accel Partners, Keystone Group, Dragoneer Investment Group in March 2015.
So far, although they are pretty shy at disclosing numbers, but Teabox already has grown 10x and has already made a sale of over 30 Mn cups or 60,000 kilograms of tea to 90 countries.
In terms of revenues, US has overtaken Russia to be their key market, which is then followed by Korea, Japan, the UK, India and then China.
Going ahead, the company is planning to setup little kiosks offline, just to create a Teabox experience, around his primary markets including – San Francisco, New York, London, Tokyo and Singapore.