“We are a very tech enabled company for that consistent experience. As long as the customer gets two products – tea and bun maska – right, the customer doesn’t care about anything. Chai cannot be made If the internet stops working at Chaayos,” Nitin Saluja, founder at Chaayos said in an interview with Raj Shamani, who hosts YouTube talk show Figuring Out.
Globally, quick service restaurants including McDonald’s and Domino’s have made fortunes by selling standardised burgers and pizzas across its outlets. Founded in 2012, the chain of chai-café, Chaayos, offers customizable chai to its customers in 80,000 ways along with snacks.
“The business you are building is not determined by the product only. The business is determined by the product and the category in which you want to operate. The total addressable market for tea is insanely huge and Chaayos chose to operate in that mass premium segment where the power lies in the hands of customers. The moment you look at chai as a mass premium product you realise that there is no competition and it was a virgin space when Chaayos started,” Saluja said.
After China, India is the world’s second-largest producer of tea and the market is anticipated to continue to expand from 2022–2027 with a CAGR of 4.2% and the industry is projected to produce 1.40 million tonnes by 2026.
India is predominantly a tea drinking market served mostly by ubiquitous local chai wallahs who sell the beverage for less than Rs10 per cup, making it extremely difficult to challenge their dominance.
“In India, we want value for money. It is a value-sensitive country. When you can provide that value, for example, 20 years back, the idea of Chaayos might be unthinkable. Today there is a growing aspiration among customers and in the next 10 years, 50% of the country will be middle class or upper middle class. People are appreciating that if you can deliver more value and more experience we are willing to spend that extra money” Saluja told Shamani, a social media creator and angel investor.