INDIA’S TEABOX RAISES SEED FUNDING FROM ACCEL TO BUILD AN ONLINE STARBUCKS FOR DISRUPTING GLOBAL TEA MARKET

To be sure, most of the tea plantations in India, which is now the world’s second largest tea producer, still rely on existing relationships with Unilever and Tata Global Beverages for distributing their products. But some of them including Goomtee Plantation in Darjeeling are beginning to work with TeaBox for better prices and getting their own branding done after years of being invisible exporters. “The Tatas and Unilevers are blenders and packeteers – so they can never provide good recoginition to individual gardens and boutique properties. The major blenders buy medium quality teas to make a standard tea so that they can offer a consistent blend at all locations 12 months in a year,” said Ashok Kumar, the owner of Goomtee Plantation. For tea growers, reaching out directly to the consumers is tempting because they are able to differentiate better in what’s fast becoming a commoditized market. “Quality tea producers, just like fine wine producers, would like to differentiate characteristics according to terroir,variety, growth period, climate and finally processing refinement – which is not possible in the blender/packeteer model,” Kumar added. For Accel, which is among the early investors in India’s biggest e-commerce company Flipkart, TeaBox is an ambitious bet. “Traditional commerce has not created enough channels for delivering choices to consumers directly. E-commerce is now creating cross-border impact in these niche, but old legacy businesses,” said Prashanth Prakash, a partner at Accel India. In Russia, the fastest growing market for TeaBox, many customers are ordering tea worth $600-$1,000 every month. To serve them even faster and beat regulatory delays, TeaBox plans to set up a fulfillment centre later this year in Russia. TeaBox is attempting to tap a growing demand for freshly-brewed tea globally. Starbucks’ acquisition of Teavana in 2012 was a sign that consumers in the U.S. and elsewhere were increasingly seeking to revive their old drinking habits. For its part, Starbucks is combining the offline experience stores with an online business that allows customers to shop for its exclusively branded products. The biggest challenge for TeaBox will be to build a global supply chain and internal technology platforms systems that can help it create a Starbucks experience for tea drinkers. .