Chai Point | A Harward graduate’s idea to be Starbucks of tea

It was late evening. An aroma filled the room. I looked up and around, and saw colleagues sipping tea. The faces which seemed over-worked, suddenly were smiling as though their task had become simpler.

But a cup of tea means different things to different people. Chai (tea), for some is a necessity. To others it is a means to freshen up and forget tiredness. It’s more than just a beverage. It’s a way of life!

It was basically to honour this ritual of Chai that Amuleek Singh Bijral began Chai Point.

The initial sips

Bijral could have gone for some big-shot corporate offers after graduating from Harvard Business School, but he had some other plans for himself. It was 2010 when he set-up Chai Point in Bengaluru with his personal savings of Rs. 30 lakh.

Chai Point tells its own story. It began with recognizing, then solving, its own need. And that was to provide a decent cup of tea, which is healthy and hygienic at the same time.

“It was really the size of the tea market and the sheer absence of a scalable pan-India brand that got me thinking” says the 38 year old founder.

Chai Point began by setting up a simple and clean store that gave an authentic glass of Chai. This simple setup turned out to be a loved phenomenon and the company has not looked back since.

Investors’ cup-of-tea

The unique concept of Chai Point and Bijral’s passion caught investors’ eyes much soon. In November of 2010 itself, angel investors got on-board.

“You must be able to pivot and pick up a new thread”, says Bijral.

Putting together these threads, Chai Point roped itself a series of funding. It received an initial investment of Rs. 10 crore from Saama Capital in 2010. Later on, in 2015, this tea retail chain raised Rs. 66.35 crore in a new round led by Eight Roads Ventures, with participation from DSG Consumer Partners and existing investor Saama Capital.

Brewing tea in India

There is no single organised player in India’s Rs 33,000-crore chai market. Indians are basically tea lovers yet have been spending more on coffee. The retail coffee market has been growing steadily with in-house as well as international brands like Café Coffee Day and Starbucks respectively, opening new stores every few days.

“Tea consumption in India is eight-nine times than that of coffee. Chai Point’s goal is to create an aspirational brand for its young consumers for whom tea drinking is a part of their daily routine”, says Bijral.

Beginning with the first pilot micro-hub in Bengaluru, the company now sells around 1.7 lakh cups of tea through its stores and ‘Chai-on-Call’ delivery service, which was launched in January of 2014 along with online ordering and mobile app.  ‘Chai @ Work’, the major chunk of business, has grown to 1,000 semi-automatic tea dispensers at cafeterias/pantries of over 100 corporate and 250 SME offices.

“We want to do for tea what Starbucks has done for coffee”, says Bijral.

The next gulp

Going forward, Chai Point plans on staging an entry in Chennai. It also plans on investing around Rs. 15 crore to open 60 more stores in existing cities.

“We are opening 60 new stores with an investment of ₹25 lakh per store (600-700 sq ft), in our existing markets. A city like Bengaluru, for instance, has the potential to easily take in 120 stores”, says Bijral.

What started out as a single outlet in April 2010 in Bengaluru, now has a footprint of 94-outlet chain across Bengaluru, Hyderabad, Mumbai, Pune and the National Capital Region.

“Customers love convenience and accessibility — that’s not going anywhere as people’s lives get busier and infrastructure for next 5-10 years is yet to take hold”, says Bijral.

Image Courtesy: Outlook Business