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Chai Point to open 20 more outlets by FY2019

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Tea, which conquers 70 percent of the non-alcoholic beverage market in India, is unofficially the national beverage of the country. Tea lovers never shy away from enjoying a hot cuppa, be it any season or any time of the day. Even the social and emotional lives of Indians are linked with tea.

In an effort to brew never-ending excitement around tea, Amuleek Singh Bijral took a plunge into the tea business around eight years ago and since then there has been no looking back.

Talking about the retail mapping of the brand, Bijral says, “We are into an Omnichannel business and have close to 106 stores. Apart from this, we also have about 2,000 plus milk-based dispensers – boxC – installed at corporate houses and our own line of packaged

“Going forward, we want to build a globally relevant tea platform and we are doing this with the help of our cloud-based platform – SHARK, which allows us to manage all our channels in a comprehensive fashion, connects to a common supply chain and allows us to serve customers their various demands and ensures to offer similar customer experience across all the channels,” he states.

Initial Challenges

According to Bijral, the initial challenges were to find the prime real estate locations as builders and landlords were not convinced about why such a concept would succeed when tea is available in every nook and corner of the city.

“However, this notion has now changed over a period of time and the credit goes to customers who have become hygiene conscious and no longer enjoy having their tea on the roadside.”

Marketing Strategy

The beverage-centric brand, which gets 25-30 percent contribution towards its revenue from food, has never felt the need to do aggressive ATL spends as stores are their core brand platform.

According to Bijral, all the brand’s spends are BTL-centric and that is the strategy Chai Point will continue to evolve and adopt.

“Apart from this, we are very aggressive on digital awareness as our audience is digitally-savvy. We are centred around white-collared corporates and that is an area where our spends can be categorised as ATL and are likely to get more sophisticated and aggressive over time,” he explains.

Technology Rules

Bijral, who hails from a technology background, believes technology is an important part of the business. The tea lover has amalgamated technology with tea to provide a frictionless experience to customers.

Explaining this further, Bijral states, “When customers enter the store, they do not want to stand in the queue, they do not want to punch in numbers to give their loyalty code, they do not want to carry loyalty cards in their wallet, but they want to be served at the earliest possible, so how will the brand solve all these problems? The answer to this problem is facial recognition.”

“We have successfully piloted facial recognition across five stores and now we are at a stage where we are confident enough of rolling it out across other stores,”says Bijral.

Even the loyalty program of the brand – PrioriTea – bets big on technology by combining facial recognition with Artificial Intelligence to offer enhanced experience to customers.

Future Plans

Singh explains, “ There is an immense opportunity in the tea business. Iced Tea which is a huge market abroad has not even opened up in India.”

The brand is planning to open 20 more outlets in the next three to four months. As of now, all the outlets are company-owned and company-operated and going further, Chai Point will continue with the same operating model.

“The brand is still at a relatively nascent stage and we believe that we need to have our own store to cement the system, processes and more importantly aggressively redefine and improve customer experience,” asserts Bijral.

“Stores remain core to our brand. Delivery and boxC are faster-growing segments, which support the store format,” he adds.

At present, stores and delivery from stores contribute 56 percent to the total revenue, 4 percent comes from packaged food business and the remaining 40 percent from BoxC business.

“We have been operating profitable for last six years. We are aiming to be EBITDA level 100 percent profitable by this fiscal-end, covering all the expenses that we have taken towards our Omnichannel growth,” reveals Bijral.

On a run rate basis, the brand is targeting Rs 200 crore by the end of fiscal.

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