What does Chai Point run on?

In a world where tea is the second most consumed beverage, India is the undisputed king of tea consumption. The nation is the second largest tea-producing nation, and an average of 88% is consumed domestically. For Amuleek Singh Bijral, CEO and co-founder, Chai Point, capturing this huge market means making his brand available to customers at arm's length.

In an interaction with afaqs!, the Harvard-educated entrepreneur explains that the outside-of-home tea consumption market, a fairly new one, doesn't need a plethora of stores in various locations. "Our numbers tell us that even if we build 3,000 stores, we will still only be able to capture 0.4% of India’s outside-of-home tea consumption market."

This, along with a significant drop in revenue due to COVID, led the brand to focus on, and invest in, building brewing machines and placing them near their consumers.

"Brewing machine is a major solution to reach out to a more significant portion of India's tea consumption market. Our brewing systems are deployed in offices, institutions as well as other F&B brands that want to consume our beverages,” mentions Bijral.

“Till now, we have deployed about 5,000 brewing machines, and our strategy revolves around deploying them everywhere and making Chai Point present everywhere.”

“Chai, as a category, needs to be of high quality. There has to be consistency, but ultimately, it also needs to be within arm’s reach of the consumers. You will be able to tap into the massive market that chai is, only if it is easily available." The company plans to deploy about 30,000 brewing machines across India.

Along with making the brand visible, Bijral is also focussing on developing a rapport with its consumer base. He says that the ultimate goal is to build a powerful brand that gives consumers the confidence to choose its product over others, not just from the stores, but other avenues as well. Keeping in mind the beverage's prowess as a social connector, the band has developed a ‘community marketing program’.

Named IROC, which is short of ‘I Run On Chai’, Chai Point hosted a number of prominent stand-up comedians in its stores in Delhi-NCR and Bengaluru between September and November. These events were called Wit-tea Wednesdays.

"IROC is a series of engagement programs that we are executing with the consumers at our locations. These can be stores, co-working spaces, and corporate offices. We partnered with leading stand-up comedians to kickstart IROC, with an aim to initiate a Chai Point series of shows in the cities where we are already present in," Bijral explains.

With this, the 12-year-old brand's fundamental intent is to engage with the consumers in their stores after two years of the pandemic. During that time, consumers only engaged with Chai Point through deliveries. The company saw a 70% drop in revenue during COVID. Entrackr reports that Chai Point went from generating Rs 189 crore in revenues in FY20 to just over Rs 55 crore in FY21.

"Our strongest channel is the store, because it is where most of our consumers engage with the brand. It is the richest channel for us. By building our brand in stores, we can give our customers confidence and trust to choose our beverages wherever they may find us," Bijral asserts. So, with customer engagement in shows, Bijral says, the brand expects to gain more of their trust. This can help the company grow its brewing business as well.

Bijral explains that the company started IROC with stand-up comedians because it wanted people to engage with it via light-hearted fun gatherings. "Bringing people together and brightening their lives is Chai Point's agenda. It is not a solo beverage, but a group beverage. IROC’s theme is a way to live up to the brand value."

The shows are primarily organised in Chai Point stores that can accommodate about 100-200 people. The stores were filled on a first come, first served basis. Although 90% of the shows were attended by existing consumers, the brand hopes to gain new customers by increasing Chai Point's visibility to a newer set of audience via these shows.

Chai Point also looks at IROC as a way to drive engagement for the brand on its app. The events have a separate page on the app and Bijral hosts a biweekly podcast, titled 'Chai for Good', on Wednesday around this theme.

IROC’s theme won’t restricted to comedy only. "The next series of shows that we’re planning to do, are music shows across our locations. We will be not only inviting artistes, but also soliciting strong amateur artistes to live in the vicinity of our stores,” mentions Bijral.

“We are planning to do IROC-themed photography events and book launches as well. Basically, there is no single event that captures chai. We want to engage the consumers from all walks of life, because chai is a social phenomenon that cuts across demographics."

"Large corporates also use our brewing systems. We reach out to their offices and explain the concept of IROC, and how we want to engage with their employees during post-office hours. We've had a lot of requests lately from many such corporates, since these shows also include content around corporate themes."?

As of now, Flipkart, WeWork and SmartWorks have hosted IROC events.