A pot of tea brewing at tiny stalls is a familiar sight at virtually every street corner in India. But this young, aspirational country is now turning for a cup of tea to hip tea outlets modeled along the lines of popular coffee boutiques.
Vivek Singhal sipped a cup of steaming hot, fragrant ginger tea with friends at one such outlet in the business hub of Gurgaon, near New Delhi. “Tea is what comes naturally to me. In my college days, I could not sit at a joint like this and have tea, I would always have to have coffee. It’s a good sign for me,” said the young professional.
In recent years, a number of tea cafes have set up shop to take on coffee counterparts by enticing a traditional tea drinking country to relax over a cup of “chai” as it is locally called.
In the four years since Amuleek Singh Bijral opened his first tea outlet called “Chai Point” in the information technology hub of Bangalore, he has expanded to five cities and plans to open his 100th store soon. “Consumers are very happy because they are getting a modern, contemporary place where they can hang around and enjoy their preferred beverage,” said Bijral, a Harvard business school graduate.
“Chai Point” is not the only one to offer competition to big, coffee chains that have been expanding steadily over the last 15 years. Confident that tea is a bigger opportunity compared to coffee in a country that wakes up to a cup of “chai,” several young entrepreneurs have opened tea cafes.
Their optimism is borne out by studies conducted by Euromonitor International that show that despite coffee’s growing acceptance in India, it has been unable to take away market share from tea. That is no surprise – India’s per capita, annual tea consumption is about 176 cups per year, compared to about 15 cups for coffee.
Affordability is helping the tea cafes, where at the lower end of the scale, consumers can grab a cup for as little as 30 cents, compared to a cappuccino, which costs much more.
Sonal Jain, who has taken a short break from work to relax at one such place, finds them easy on the pocket and the best place to catch up with a friend. “You don’t have to sit inside and place an order, you can just stand here and have a conversation and have your tea and go,” said Jain.
It is not just the traditional sugary, milky concoction popularly consumed in most Indian homes that is on offer. At the Chaayos Tea Room, consumers can add a dash of whatever their fancy takes -- lemon, ginger, honey, pepper, mint, even green chilli.
“So customers can come in and customize their chai according to their liking. And so people end up making upwards of 12,000 different kinds of chai. And people just experiment a lot with their chai,” said Nitin Saluja, who along with a friend, quit a job in the United States to begin the tea parlors.
A tea taster from India’s lush, tea-growing region in Assam is happy that many of these places are pushing premium teas. “If the younger generation can be educated about how tea is drunk, yes I am very much pretty sure that tea can take over coffee any day,” said Ashish Agarwal.
There are challenges ahead. The biggest one is the high cost of real estate as the young entrepreneurs try to scale up their presence, because they do not have deep pockets like domestic and international chains such as Café Coffee Day and Starbucks.
Technology is helping to overcome some of the hurdles -- Chai Point delivers tea in disposable flasks.
“In a highly crowded country like India, especially in the mega cities, the ability to order a flask through your smartphone or your website has become a very, very real business for us. We sold almost close to 10 lakh (one million) flasks in the last year,” said Bijral.
As the tea cafes become popular, they have been able to raise venture capital to fuel growth, making the young entrepreneurs confident of giving established coffee chains a run for their money.
“I think it’s always the survival of the fastest and the fittest, not necessarily the survival of the fattest. We are very young, we are very agile and we are very fast and we have been able to crack deals that big corporations haven’t been able to crack and we’ll continue to do so,” said an optimistic Saluja, who hopes to build a pan-India presence in the years to come.
