How ecommerce came to the rescue of Darjeeling, Assam tea producers

Rishi Saria, third-generation owner of the Gopaldhara and Rohini tea estates in Darjeeling, has several reasons to be worried. The Covid-19 pandemic and lockdown had badly hit first flush tea production in his estates with the main crop down from around 8,000 kg to 3,500 kg. Travel bans and lockdowns across Europe, the big export market for Darjeeling teas, have disrupted supply chains with cancellations coming in from several countries.

Further a huge segment of the domestic tea market — comprising hotels, cafes and restaurants — is in the doldrums, and the town of Darjeeling, a tourist centre and a big market for tea, has been knocked out with nationwide travel restrictions.

Tea production in Assam, the other hub in north-eastern India, has also been badly impacted not just by the pandemic but also the devastating floods in the region.

However, Saria, who is now at the helm of his family business, is upbeat thanks largely to his decision of expanding into e-commerce four years ago. “Online purchases of our teas have been very strong over the last couple of months with a 3X increase compared to the months before the pandemic,” he says.

Reading the tea leaves

Saria's shift in focus is a sign of the changes taking place in the tea industry. A packet of tea for the daily cuppa was probably the most frequently bought item at the nearby kirana store or top of the cart at the supermarket for most families. But since visits to retail stores were cut down in the wake of the Covid-19 pandemic, many tea companies are now doing their best to woo customers online.

Saria believes that his company had a big advantage since almost 90 percent of the products are offered online through their own website and they have a loyal customer database they have been able to leverage in these difficult times. “For us domestic e-commerce was a saviour and now several other Darjeeling tea producers are looking at it as an option,” Saria says.

In fact, he is considering helping others venture into online sales of tea. Saria himself has been taking a keen interest in the Gopaldhara website over the last few months and has been personally writing blog posts. “Besides tea boutiques and five-star hotels, many of which are now closed, the only other place to connect with connoisseurs and lovers of the finest teas is social media platforms,” says Saria.

He is looking at talking about new launches and initiatives through the company website and educating the market about unique Darjeeling teas. “Like the big Chinese online tea companies, we too need counterparts for Darjeeling tea to scale up operations and build partnerships for e-commerce,” he says.

Reeling under Covid impact

Over the last few months, Indian tea producers have been hit by challenges on the production and logistics fronts because of the pandemic, including an untimely halt in harvesting at the start of the cropping season as well as delays in transportation feeding the retail trade. E-commerce, especially for the domestic market, has helped several tea companies stay afloat amidst the gloom.

“Faced with such adverse conditions, several Darjeeling tea growers have been exploring a shift from bulk exports to the e-commerce model. To achieve this, they are becoming more focused on brand building and ensuring better product quality. Several Darjeeling tea brands are now getting better recognition on online and social media platforms,” says Sandeep Mukherjee, principal advisor, Darjeeling Tea Association.

E-commerce has, in fact, proved a boon even for India's second-largest tea producer and Tata company Amalgamated Plantations Pvt Ltd, which began its online journey in FY 2019 with its corporate website hosting its own tea brands and servicing the customer base pan-India.

“With the Covid-19 pandemic and social distancing norms becoming the new normal, it was clear that we needed to ramp up our presence in the e-commerce space and have developed a new website. With the Indian consumer having leapfrogged in leveraging digital platforms and tea gaining popularity worldwide for its immunity inducing properties, we have already done 1.6 times of sales in the current year compared to the whole previous year,” says Vikram Singh Gulia, MD and CEO, Amalgamated Plantations.

Going forward, the e-commerce platform will evolve into one of the main retailing pillars for the company since it lends itself so easily to direct customer interaction, customisation and adherence to safety protocols, Gulia explains. Besides Diwali launches online of a range of tea gift boxes, Amalgamated Plantations is also servicing bulk enquiries and corporate orders online this season. Ambitious future e-commerce plans include becoming an aggregator and showcase for the best of Indian teas to consumers across the world.

Smaller players also log on

And like tea industry biggies, smaller players such as Luxmi Group, a prominent producer of Darjeeling and Assam teas, are strengthening their online activity specially to cater to the increased festive demand. “Our brands Luxmi Tea and Makaibari fit right into all the festive merrymaking and revelry. Our social media communication plan is in place and we have strengthened our logistics and customer care capabilities,” says Rudra Chatterjee, MD, Luxmi Group.

The company, which owns Makaibari, one of the best-known Darjeeling brands, has now identified greater social media engagement as the next focus area. The group is engaging with micro and macro influencers and advertising on social media platforms. “We are seeing an increase in visitors to our website through our consistent social media activities. We also have a healthy conversion rate with a majority of conversions taking place from social sources,” says Chatterjee.

The group is creating personalised experiences for website visitors as they engage with the brands as a crucial part of their e-commerce strategy. To create content to be posted regularly on social media, several people within the company have been roped in — from tea tasters to estate managers across 25 estates — to supply images of activities at the tea estates, festivities and different aspects of the tea farmers' community life.

Other traditional tea producers, too, are looking at ramping up their e-commerce operations. “We have revamped our website over the last few months and are seeing increased demand both through our own website as well as on other platforms. As a 112-year-old producer of some of the finest teas in the world at our own gardens in Darjeeling and Assam, we consider we're in the best position to take our teas and our story to our consumers on our B2C platform,” says Yash Lohia, CEO, Chamong Tee exports, a group that operates 13 tea estates in Darjeeling.

Anshuman Kanoria, CEO of Balaji Agro, a leading producer and exporter of Darjeeling & Assam teas, also feels that that e-commerce platforms have a bigger potential for Indian teas in a post pandemic world and need to be tapped in a bigger way. The company's online platform, Mysteaque, has on offer an affordable selection of luxury Indian teas.

New entrants

Considering that the older, conservative players in the over-century-old Indian tea industry are turning to e-commerce, it's no surprise that new entrants such as Teabox, Vahdam Teas and Tea Trunk are even more aggressive.

Teabox, a company started in 2013 for production, retail and e-commerce in Indian teas, has seen huge growth in online sales, especially in the domestic Indian market. “From 4X for green teas to 2.4X for specialty teas and 1.8X for black chai teas, our growth over the last six months has been phenomenal compared to the months before that. Over the last six years we've built strong e-commerce operations and that was a big advantage in the post pandemic situation. People are staying home and drinking more teas and online sales have spiked; tea is also perceived to build immunity in the time of the Covid-19 virus,” says Kausshal Dugarr, founder and CEO of Teabox.

The Bengaluru and Siliguri based company, which ships Indian teas to customers in India and 117 other countries under the brands Tea Box and Only Leaf, has been engaging with some of its high-end customers through social media channels with videos on tea-tasting and interactive sessions to meet tea growers.

While on one hand the Covid-19 pandemic has been a boon for e-commerce adoption in India and globally, the shift towards wellness products, too, is providing tailwinds to the consumption of tea. Vahdam Teas, a Rs 100-crore e-commerce player that ships Indian teas to 104 countries, saw a big rise in demand, especially from markets such as Europe and the US. “Consumption of tea has gone up massively over the last few months with a huge shift towards wellness and immunity boosting products. Online customers have access to a much bigger range of tea products, including organic, natural and pure, and locally produced, processed and packed,” says Bala Sarda, CEO of Vahdam Teas.

“But there were many local level and simple innovations we needed to do to ensure every customer continued to get our products. The fact that we are a young start-up gave us the agility, dexterity and nimbleness to take quick-decisions and make immediate changes to overcome these never-before seen challenges,” he added.

Sarda, too, is from a family that has its roots in the Darjeeling tea industry in the business of retailing and exports. The company has been engaged in promoting a lot of single-estate teas from Darjeeling and Assam and educating customers about these specialty teas through blogs and posts.

“Social media for us is an effective tool to promote our products and to tell our story and the story of tea leaves and growers. We also share information about the spices and herbs we use in our tea, their benefits, and the best time to consume them,” adds Sarda.

Goa-based tea sommelier Snigdha Manchanda started Tea Trunk, an online store to ship tea products worldwide, in 2013. Currently, 70 percent of e-commerce revenue comes from the company's own website and the rest from Amazon, Nykaa and other marketplaces. “We believe tea is a lifestyle product and we engage with customers by building knowledge and advocacy around tea. We enjoy a 30 percent repeat rate and during Covid e-commerce revenue grew by 8X on our own website and by 3X on marketplaces,” she said.

“E-commerce creates the right context for us to position our premium teas for health and wellness. It's hard to create that knowledge-led brand experience in a supermarket,” explains Manchanda. The company, which is profitable, has seen exponential growth over the last few months. It has been able to scale up during the pandemic, retained all employees and even added staff members in operations. Tea Trunk is investing heavily in creating online content around health and wellness.

Ishani Duttagupta is a senior journalist based in Kolkata.

Original Source: https://www.moneycontrol.com/news/business/companies/how-ecommerce-came-to-the-rescue-of-darjeeling-assam-tea-producers-6103851.html