Chai Point: Disrupting

Chai
Group 5
Harsh Vardhan M026-20
Abhijeet Sahoo M202-20
Deepti Ranjan Behera M217-20
Mayank Singh Sengar M232-20
Parv Kataria M235-20
Sagar Kaushik M243-20
Binny Lakra M274-20
 TABLE OF CONTENTS

Case Summary Questions

1 All important details of the
case
2 All questions evaluating various
aspects of the business

Conclusion
3 Important learnings from
the situation
 Case Summary
● Bijral, an engineer started his career by working at large IT firms such as microsoft.
● Vikram, who is the co-founder of the venture suggested to get into chai as the market was big and there was no
single organized player to cater the market.
● Bijral & Vikram resolved to run independent pilots in different cities & merged their ventured after a year if the
pilots were successful.
● Birjal invested Rs. 3 Million of his own savings in his new firm Mountain Trail Foods pvt. Ltd. & co-opted
Khanna as his co-founder.
● India had a Rs 1.5 trillion chai market that was growing at a CAGR of 23%.
● Bijral decided to focus Chai point’s offering towards the 20% of this market which consist of white-collar
workers.
● Keeping in mind the new target market , Chai point changed its retail store format. It shut down 9 if its existing
stores and setup new ones in areas with high worker concentration.
● In May 2014, Chai point raised Rs 92 Million of series A funding from aama Capital, an India-focused VC.
● By June 2014, Chai Point launched its delivery service Chai-on-Call.
● As Chai Point business evolved, it hired many new people. It had seen 2 years of 100% growth rate.
● As Chai Point scaled,technology became increasingly important to integrate its different channels & the third
party off-the-self software that chai point was using was very expensive.
 Case Summary
● As a result of which it started developing cloud-based technology platform & integrated billing & tracking
data across chai points different channels.
● It had a delivery management system that integrated warehouse & suppliers with the retail outlets,chai on call
& corporate clients, etc.
● Between 2012 & 2015, Chai Point had grown to serving its target segments through three distinct channels -
Retail stores, Chai on call & Chai@work.
● Despite this success, the vision of becoming an omnichannel beverage company was not fully cleared to all
the investors.
● In addition to Chai point, there were a host of other players chasing the rapidly growing chai market.
● Bijral was particularly excited about bocC.in because he felt it helped position Chai Point as a technology
enabled beverage company, rather than a pure “retail play”.
● The Board members were not aware about boxC.in development & its immense capabilities & Bijral
wondered how best to present it to them.
● Bijral wondered how much to emphasize boxC.in in the presentation and perhaps more importantly, the role it
would play in the future growth of Chai Point.
 What is the potential for technologies such as IOT in traditional retail industries?

Benefits of technology for Chai Point -

● To make instant tea on-site with tailored recipe and ingredients which will bring consistency and
standardization.
● Technology will help to track and integrate data across platforms and channels.
● Internal billing, warehouse management, delivery systems could be managed more efficiently.
● Technology gives more options to its customers to choose the service according to his/her convenience
and interests.
● Technology will integrate various channels and will help the company become an omni-channel
company.
● IoT will help retailers to personalize product/service.
● Automation of various operations such as payment, ordering etc. will enhance employee productivity and
improve sales with lower lead times.
Is boxC.in a technology looking for a solution or is this technology the right solution for a problem that
Chai point is trying to solve (via technology)?

boxC.in Is the right solution for a problem that Chai point is trying to solve.

● boxC.in ensures a higher quality of service and maintenance

by reducing the Repair time.
● The AI ML enabled dispenser targets Tea and Filter coffee
drinkers, this enables Chai point to serve their enterprise
customers better by satisfying the all time demand for
authentic Tea and Coffee at offices.
● Real time tracker for refills and consumption data provides a
proper mechanism for billing (per cup) and thus ensuring
more transparency.
Do you agree with Bijral's assessment on how to develop Chai Point into an Omni-channel company?
Why or why not?

We agree with Bijral’s assessment on how to develop Chai Point into an Omni-channel company. Currently the
company had three channels and one additional product line apart from the core tea business. There are various
reasons for being an omni-channel company -
● Expand the market - They can cater to various segments of customers (enterprise, home, retail) who want
different experience from the brand.
● Overcome limitations of existing format - Retail format stores are not convenient for takeaway or for
enterprise customers.
● More data and insights - Going online or increasing B2B sales increases data in terms of revenue, sales
and most importantly improves customer relationship management. This also helps to gather consumer
insights, complaints and thus improving the experience.
● Predictive cash flow and revenue - As more accurate data is received, it can help to predict company
financials more accurately and thus will improve decision making.
● Private label products will help improve margins.
● Give flexibility to customers.
● Distribute the risks of a single channel in the times of crisis.
What approach do you think the various investors/Board members favor? Given this, what should Bijral
do?

The various investors/Board member favor Chai Point to be a chain of retail shops selling chai as their core
business.

What should Bijral do?

● Intimate the investors and board members about the latest developments of boxC

● Convince his vision of amalgamating technology with Chai business that would create a Blue Ocean for
Chai Point

● Showing with numbers that how B2B would yield better returns than B2C

● Going a bit more conservative in financial forecasts for subsequent years by adopting scientific methods
to determine growth
 How does Chai point's quality compare to existing offerings and competitors?

● The direct competitors of Chai Point are tiny roadside stalls and restaurants across the the country
serving Chai

Comparison with competitors and existing offerings

Pricing -Chai point offers at Rs 15-Rs 18 for 100ml

Competitors offer at Rs 10-Rs 15
Quality- Chai point offers better quality,hygiene,brand and serving standards

Loyalty Programs-Unlike its competitors,Chai Point offers loyalty programs for enhanced customer
experience and engagement
Which segment is it focused on? What is its positioning?

Initially Chai Point focussed on young professional who liked

their product but did not want to be associated with Chai.
Later they realized their ideal segment to be white collar
workers who had higher willingness to pay and valued
hygiene,quality and brand

POSITIONING
 What segment should Chai point ideally focus on and why?

● Chai Point should ideally focus on college students and white collar
workers.
Reasons:
● A cup of good quality chai is hard to find as compared to coffee.
● Indians are used to taking a chai break rather than a cappuccino break
● Chai Points ideology of Clean Earth will easily align with this segment
Steps Chai Point should take in order to attract more people from this segment-
Insert your
lowering its price,adding new flavours,offering affordable quality snacks and
wraps multimedia
content here
 Looking at the current scenario things Chai
Point should focus on -

● Using technology to differentiate itself

from its direct and indirect competitors.
● Invest in omni-channel and diversifying
its portfolio.
● It’s target group of white collar workers
Conclusion and enterprise solutions in addition to
retail.
● Increase private label products.
Thank You