Tea cafe chain startup Chai Point eyes local markets in China

Chai Point, a Bengaluru-based tea chain startup, is exploring the possibility of entering into alliances with local partners in China, which is ahead of India in terms of infrastructure and purchasing power when it comes to tea cafes.

Chai Point, which is backed by investors like Saama Capital, DSG Capital, and Eight Road Ventures, is aiming to compete with local players in China like Heitea and global tea cafe major Starbucks.

While Starbucks already has more than 2,000 cafes in China, Heitea has also captured the market with a large number of tea cafes.

“Chinese consumers are now discovering the power of local brands and we will look at strategic alliances and may also seek franchises in the region. We have to look at ways to sell our teas in China,’’ said Amuleek Singh Bijral, Founder & CEO, Chai Point, reports BusinessLine.

“Non-milk and iced tea are healthier options which have high volumes in China and is a big area of growth. We may seek transfer of knowledge in these categories as well,’’ he added.

Chai Point claims to be the largest player among Indian tea start-ups with revenues at Rs 100 crore. The company claims to turn profitable and is also ready to raise another fund of $20 million. In August last year, the firm raised an undisclosed amount from its existing investors.

Being an omni-channel player and having a delivery model, Chai Point has an advantage over other tea and coffee companies. Apart from its tea cafes, almost 15 percent of its revenues come from its delivery model.

Founded in April 2010 by Bijral, Chai Point is currently operative in eight cities- Bangalore, Delhi, Gurgaon, Noida, Mumbai, Pune, Hyderabad and Chennai with almost 100 outlets. It plans to expand its services in twelve cities. Chai Point claims to sell over 300,000 cups every day.

The Chai Point app has seen 100,000 downloads and orders from the app contributes to almost 10 per cent of revenue.

Almost 85 per cent of its revenue comes from the hot-and-cold chai offerings and the rest from food. The firm also claims to have a good amount of revenue coming from its B2B arm. Chai Point which owns a delivery fleet is also available through food-delivery apps Swiggy and Zomato.

In India, the firm closely competes with another startup Chaayos in the same space, which raised $2 Mn from Tiger Global Management in October last year.

Other players in Cafe chain include Blue Tokai Coffee Roasters, which had raised funding from one of its existing investors; DropKaffe got $300K in a funding round led by Manish Singhal and P39 Capital and tea e-tailer Teabox.com, which had raised undisclosed amount from Ratan Tata to expand its global footprint, to name a few.