Tea retail chain Chai Point, which has a footprint of 94 stores across Bengaluru, Mumbai, Pune, Hyderabad and NCR, plans to invest ₹15 crore to open 60 stores in these 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,” Amuleek Singh Bijral, founder-CEO, Chai Point, told BusinessLine .
“We are also planning to stage an entry into Chennai this December, with our recently launched corporate offering called boxC.in, a cloud-based beverage services platform that serves tea and filter coffee through fully automatic and IoT-enabled dispensers, which we provide.”
Beginning with the first pilot micro-hub set up in Bengaluru in April 2010, Chai Point sells 1.7 lakh cups of tea through its stores and Chai-on-Call delivery service, which was launched 18 months ago.
Chai @ Work, its corporate service, introduced two years ago, has grown to 1,000 semi-automatic tea dispensers at cafeterias/pantries of over 100 corporate and 250 SME offices.
Revenue mix
About 60 per cent of the company’s revenue comes from retail stores, 30 per cent from corporate service and 10 per cent from the delivery business.
“Eighty-five per cent of our revenue comes from the hot-and-cold chai offerings and the rest from food. Same-store sales grew 33 per cent year-on-year, and the delivery business is growing at 15-19 per cent month-on-month with a spurt in weekend deliveries. The corporate business is growing 10 per cent month-on-month,” said Bijral.
The company has its own delivery fleet with 75 electric scooters, and is also available through food-delivery apps Swiggy and Zomato.
The Chai Point app, launched a year ago, has seen 26,000 downloads; orders from the app contributes to 8 per cent of revenue.
The company has partnered with cookies brand Unibic and restaurant chain Maiyas to sell single-serve eats such as multigrain cookies, masala peanuts and cornflakes masala in contemporary packaging.
Single-serve eats
“This is in line with the Indian ritual of chai-biscuits. We will soon be introducing single-serve eats such as rusk, matri (spiced crackers), gud-channa and quinoa puffs that go well with chai.” Chai Point targets the white-collar workers’ need for easy access to chai at their convenience.
Asked when the company expects to turn profitable, Bijral said: “While we have always had healthy operating level profits, we expect to be profitable at the company level in the last quarter of this fiscal, driven by our delivery business, where we are earning more on every square foot, followed by the corporate business, where we incur low overheads.
Chai Point has raised $12.5 million in funding from Fidelity and Saama Capital, and a few angels investors including Pramod Bhasin and DS Brar.