COVID-19 has opened vistas to new markets for Indian e-commerce
Kausshal Dugarr, Founder and CEO of Teabox, India’s luxury premium tea brand opines that Indian companies can connect with a global consumer base, which they may not have tried prior to Covid. He adds that for e-commerce to thrive in the country in this post-Covid world the Government needs to take a proactive approach and provide a broad framework.
IBT: How can the contribution of e-tail to India’s GDP be enhanced in the next 5 years? What can the government facilitate the same?
Kausshal Dugarr: India is poised for a big leap in e-commerce in the coming decade. With rising disposable incomes and increased internet access across Tier 2 & 3 cities in the country, there is strong growth potential for e-commerce in India. Greater access to the internet and widespread adoption of technology by SMEs and big industrial houses, particularly post-Covid has opened up huge scope to reach a diverse spectrum of customers across geographies and markets in a variety of ways.
As per latest data available, e-commerce as a percentage of total sales is likely to become bigger in emerging markets across South-east Asia. As of now, online sales account for less than 1% of total retail sales in ASEAN region when compared to 6-8% of total sales in EU, US and China. So, the potential of e-commerce to contribute more to India’s GDP is huge, provided there is adequate information communication technology (ICT) infrastructure to support the robust growth in this sector.
There are significant challenges to overcome ranging from poor internet connectivity, regulatory hurdles to logistics bottlenecks. Policies such as enhancing accessibility to the internet via smartphones, widening of smartphone coverage in rural belts, faster network speeds will help online retailers reach a new segment of previously underserved customer base. Foreign direct investment (FDI) rules in B2C online businesses need a change to encourage businesses to transform their business model to an online framework. This also needs a balanced approach in terms of taking brick-and-mortar stores into confidence and making them a part of the growth story as they presently feel threatened by the big online players and often demand protection from the government. Further, the existing laws governing taxation of online retail companies need some change; as they make it difficult for companies to become competitive against the giants in the field.
IBT: How does the cross border e-commerce trade work in terms of payment options, return and shipping policy, etc.? What challenges exist in its operations?
Kausshal Dugarr: We, at Teabox ship to more than 117 countries across the world and we strive to deliver a delightful experience every single time. In terms of e-commerce; we, at Teabox, offer a host of widely used international payment options such as Paypal, American Express, Visa, MasterCard, Rupay and others. This is to facilitate easier transactions from a customer’s viewpoint and less chance of payments getting stuck due to lower data speeds.
We claim to market the freshest teas to our valued customers and logistics is integral to our core mission of delivering the freshest of teas to our customers every single time. Challenges do remain in terms of transport bottlenecks, shipments getting delayed at customs in various countries particularly in context of COVID-19, where the entire transport infrastructure got affected. However, we try and reach out to our customers at every step of the way. Right after they have made a purchase, they receive notifications regarding status of their shipment, location of their parcel, the date it reaches the destination country and date of delivery. We also have a dedicated customer experience team who calls up every single customer in case they are facing any difficulty or have any queries regarding their purchase. All this helps us avoid the gaps in communication and helps ensure customer trust and loyalty.
In terms of shipping, we partner primarily with DHL/Fedex, EMS (India Post) and Air Mail to deliver our teas worldwide. Express service (DHL/FedEx) takes up to 5-8 working days for delivery in all major EU countries & US, EMS Speed Post takes up to 30-45 working days for delivery in CIS countries & & Air Mail takes up to 45-60 days for delivery.
As for returns, we tend to receive very rare requests as we deal with high-end speciality teas. We take extra care to ensure an enjoyable tea drinking experience for our customers worldwide. However, since return requests are unavoidable and some requests do come through, we have clear policies in place. If any customer requests a return owing to damages in shipping or is dissatisfied with quality, we reach to the customers and address their concerns within a short span of time. If any customer were to receive a defective or damaged tea ware or gift box, they can raise a returns and replacement query by sending an email to firstname.lastname@example.org within 30 days of the purchase. They can attach an image of the item received so we can evaluate its condition and ensure that the product is unused and in its original condition in case of gifts. Products acknowledged as damaged or defective are reverse-picked by us free of cost. Once we receive the item at our facility, we verify its condition as per set quality protocols and initiate the process of refund/replacement accordingly. If any customer receives a package in damaged or broken condition, they are requested to send us images of the damaged carton within 24 hours of delivery and they should mention the same whilst acknowledging the delivery with our courier partner.
IBT: What are the opportunities/challenges do e-commerce sales have vis-a-vis retail?
Kausshal Dugarr: In e-commerce, there is a huge opportunity to reach out to a wide base of untapped customer base, which is not possible with an off-line model. Post-Covid, as most of the people were stuck at home, there is a huge shift in consumer behaviour as consumers are looking to purchase online on account of lockdowns in many places, closure of brick-and-mortar stores, shelves being empty in nearby supermarkets etc. Post-Covid, e-commerce sales are estimated to have spiked by as much as 30-40% in certain core sectors such as household staples, medical supplies, everyday groceries, health beverages and other high priority items.
Indian companies can connect with a global consumer base, which they may not have tried prior to Covid and bring in work efficiencies amidst substantial challenges of operating in a pandemic. Strategizing, communicating with the consumers in a brand new way, developing products in tune with the new reality, particularly in beverages where healthy-lifestyle themed options are increasingly a big favourite. Also, leveraging social media to deliver your messages effectively to the target audience is integral to the success of any brand in the post-Covid world. These shifts in consumer behaviour are likely to remain relevant in the long run as consumers adapt to a new way of living.
Challenges do remain as customers expect more from the brand. They expect to be treated the same way online as offline and therein lies the challenge for brands to provide a similar purchase experience in an online model, build trust of newer customers over time and sustain consumer interest in the brand and build loyalty. Further, having a user-friendly, modern, trust-worthy and safe website is a must. To convert online traffic into customers, understanding the customer needs is critical; which then can lead to curated development of products and innovative website design that resonates with the right audience. Further, online businesses need the proper cybersecurity framework to keep customers data safe, secure and implement technology to combat cyberattacks. Every industry is different; however the broader challenges do remain the same with the ultimate objective to delight the customer every single time.
IBT: What are the key commodities that are traded across borders on your platform? Which are the main areas they are exported to?
Kausshal Dugarr: We, at Teabox have been able to significantly change the way teas are marketed and consumed worldwide. Our USP lies in making speciality, single-origin teas from the main tea growing regions of India viz. Assam, Darjeeling, Nilgiris, Sikkim, Meghalaya & other parts of North-East accessible to tea lovers and connoisseurs across the world. The traditional tea route is a long one, beginning in the tea estate and involves multiple intermediaries. Hence, once a batch is produced, it takes almost 6 months for that tea to reach the end consumer.
With the widespread adoption of technology and reach of the internet, we can easily bypass the long supply chain, reducing the time frame of delivering teas to a customer’s doorstep to almost a week and thereby ensuring, our customers have access to the freshest of teas every single time. Apart from single-origin teas, we also have a portfolio of flavored tea offerings in both green & black segments, alcohol-themed teas for the festive season, wellness segment for the health-conscious customers and of course, an exclusively curated offering of premium single-estate White, Oolong, Green & Black teas from best tea gardens in India. More than 90% of our overall business comes from international markets where the US contributes almost 40% to overall revenue followed by Russia, India, UK, Japan and Germany.
IBT: How did e-commerce help you sustain your business during the pandemic?
Kausshal Dugarr: We have immensely benefited from widespread adoption & pick-up of e-commerce this year. Post-covid, whilst the entire tea business looked to pivot online – we have been able take advantage of our solid online presence across the world; particularly India where the traditional model of doing business saw serious impediments in terms of transport, logistics, storage, closure of brick & mortar stores owing to pandemic and a long and inefficient supply chain. We have been able to engage with our customers in a brand new way – authentic messages over email, social media advertising, innovative videos and From the Source messaging.
IBT: What role does e-commerce play in your business? What initial hiccups did you face while establishing your brand’s online presence?
Kausshal Dugarr: Our idea was to bridge the time gap between time of production till it finally reaches the end customer; no matter where they are and ensure access to the freshest teas. When we started in early 2014, the idea of selling teas online in D2C format was an amateur concept and the traditional tea industry had never even thought of this and wanted to follow the decades-old model of bulk exports to traditional export destinations in EU, US, Japan, parts of Middle East and CIS countries. As a result, the tea producers never tried out anything different in terms of the style of manufacture and the exotic, rare tea varieties such as high-end white, oolong and black teas were still a rarity.
The concept of marketing speciality teas to a wider audience and creating a value proposition never really existed; with the bigger market players mainly involved in marketing CTC-tea, popularly known as “chai” to the Indian audience. We wanted to bring in fresh thinking to the tea industry and initially, when we started – no one really believed a change is possible. However, having delivered freshest cups to a worldwide audience and being backed by institutional investors a year later brought in a world of credibility to our mission and that really boosted our confidence. In fact, in the last couple of years – a lot of the traditional tea businesses have started building a website of their own and listing their estate teas in a big way.
Kausshal Dugarr is the Founder & CEO of Teabox.com, an Indian tea brand that sells the freshest tea and tea-based products sourced from Darjeeling, Assam, Nilgiris, and Nepal. Founded in 2012, it is world’s first vertically integrated tea brand that is disrupting a $50 billion industry with its innovations in technology and supply chain.
Raised in Darjeeling, with his family in the tea business [his father used to supply tea plantations with mechanical equipment and his brother runs a tea export business in Dubai], it was inevitable that Kausshal too would find his way into the trade. His idea was to ensure that tea consumers, no matter where they are in the world, get access to the freshest teas by creating a direct-to-consumer brand.
Prior to establishing Teabox, Kausshal graduated Cum Laude with a Bachelor’s of Business Management from the Singapore Management University (SMU). At SMU, he was the founder & president of SMU Ventures – The Entrepreneurship Society that encouraged students to pursue entrepreneurship and has resulted in few businesses with million dollar revenues. He worked as a corporate finance analyst and strategy consultant at KPMG Singapore. At KPMG, he worked with Government Agencies, private corporations across South East Asia and the Middle-East on long term corporate strategy development and corporate finance projects across range of industries such as healthcare, media, real estate and automotive.
Kausshal is also the co-founder of Books to Read – a non-profit aimed to help primary & secondary school children get access to books from developing nations where he and his team shipped around 100,000 books from Singapore to schools in Tanzania and Zambia. He has been recognized as Entrepreneur Magazine’s 35 Under 35 (2017), Fortune Magazine’s Top 5 Creative People (2016), CNBC’s Young Turk (2016), an INK Fellow (2015) and AACSB Influential Leader (2015). He has also been featured in publications such as New York Times, CNN, Forbes and The Economic Times and most recently was selected as one of the 40 Under 40 by Fortune magazine.