Chai Point goes hi-tech to dip into corporate tea drinkers

Chai Point, India’s largest chain of tea cafes, will soon introduce advanced, (Iot) Internet of Things-enabled tea and coffee dispensers as it expects its business-to-business (B2B) unit to drive nearly 70 per cent of its sales in the coming years.

From allowing customers to pay for tea digitally to altering its blend remotely, the new dispensers will do it all.

“As we are building these dispensers, we are giving them IoT capabilities and making them more advanced. The next versions are all going to run on Android,” said Amuleek Singh, founder and chief executive officer of Chai Point. “Once this happens, we will be able to programme and play around with the system a lot more.”

Today, Chai Point runs close to 100 stores across the largest metros in the country, but that’s only half of its business. The company said it was fast approaching the Rs 100 crore revenue mark and by ploughing back the money it makes on every cup of tea into growth, it isn’t as thirsty for venture funding as most other start-ups. Having raised $10 million in September 2015 from investors such as Eight Road Ventures and Saama Capital, the company said it would look at raising more money over the next 12-18 months, to invest in its growing network of BoxC tea and coffee dispensing machines.

The company also caters to corporate customers, either delivering tea to their doorstep or installing dispensing machines in their cafeterias.

Singh said that while Chai Point would continue to grow its base of stores, being dependent on the availability of real estate makes it hard to imagine explosive growth in the short term. Instead, over the next two-three years, he expects the company’s growth to come from its B2B unit, with tea and coffee dispensers playing a leading role here. “We have a small engineering and new product development teams where I spend a considerable amount of my time. We’re always thinking about what’s next and we’ve already built the next generation of dispensers and are showing them off now. Coming from a background of technology, I’ve known from day one that tech is the way forward,” Singh said.

As for the new dispensers that run on Android — the mobile operating system of Google — Chai Point would be able to programme the machines based on the demand of the client, run remote diagnostics, save money by being more frugal about sending manpower to refill the machines, etc. The company said the savings would be realised iteratively, as they figure out new ways of improving their efficiency through the machines.

Chai Point’s B2B unit already drives 50 per cent of the company’s earnings, but Singh expects that number to rise to around 70 per cent since it’s the fastest growing unit. In time he says dispensers installed at corporate buildings will come back under 50 per cent as the company explores new avenues.

“Having stores has given us visibility and that’s very important. Today we are perceived as a brand that serves great chai by our target group of people employed with corporates. We will use that to expand our brand, like how we are now introducing our own line of packaged teas which you might have seen available at our stores,” said Singh. Going forward, Chai Point plans to sell its own brand of teas through all popular mediums - online as well as through large format offline retailers. While the company isn’t aiming to compete in the affordable tea sector, it said the audience would still continue to be India’s white collar workforce who love its brand today.