Case Study : Chaayos Disrupted the Way Modern Indians Consume Tea

I’m sure many of you begin your day with a hot cup of chai.

And have it in the evening as well.

And use it as emotional support on hard days.

One of the chai lovers among you reached out and asked for a case study on Chaayos (which co-incidentally was already in progress!):

Being the second-largest tea-producing nation, tea has become a part of our lifestyle.

In almost every lane, we can find a tea stall (or start-up hubs if you’re in Bangalore).

So, why would you go to a café to have tea when it is readily available?

That’s Chaayos’ USP: it combines quality, customization, and a homely ambiance.

It’s not just about having a cup of tea; it’s about enjoying a moment of comfort, relaxation, and connection.

Let’s look at their simple but on-point marketing strategies that gave them a valuation of $1 billion!

About Chaayos:

The traditional chai market has long been dominated by these vendors, who offer quick service, affordability, and convenience.

But that means it’s not always the most customized, hygienic, or relaxing option.

Think about it: when you have tea at home, you are more relaxed and enjoy it with a snack or the weather. But at a tea stall, it’s usually quicker and more chaotic than that.

It’s the former feeling that Chaayos wanted to replicate in an organized tea café.

Today’s consumers are increasingly looking for more than just a cup of tea; they seek an experience:

Health and wellness trend: Leading to demand for healthier tea options like green tea, herbal infusions, and teas with added functional benefits. Customization: Consumers value the ability to customize their tea. Hygiene and ambiance: Important factors for the modern tea drinker.

Source: The Financial Express

Chaayos was founded in 2012 by two passionate tea enthusiasts, Nitin Saluja and Raghav Verma.

Their vision was simple: “to help ease these seemingly endless pressures of modern existence using a traditional recipe for Relaxation i.e. Chai and Snacks that go along with it.”

What started as a single outlet in Gurgaon has rapidly expanded into a popular chain with over 200 outlets across major cities in India.

Though coffee chains like Starbucks and Café Coffee Day, although primarily focused on coffee, are starting to include chai options in their menus, it is not a priority.

This gives players like Chaayos an edge in terms of specialization and domination.

Marketing Strategies of Chaayos:

1. Target Audience:

Urban, middle-to-upper-class consumers who value quality, hygiene, and a personalized tea experience Young professionals, college students, and families who frequent cafés for both leisure and work. Tech-savvy and health-conscious individuals who are willing to pay a premium for a superior product and experience.

2. Brand Identity:

“Meri Wali Chai”: The core message of Chaayos is personalization.Their slogan, “Meri Wali Chai” (My Cup of Chai), perfectly shows how they offer a tailored tea experience for every customer. Modern Yet Traditional: Chaayos blends contemporary café culture with the rich tradition of Indian chai, appealing to both young professionals and older tea enthusiasts. Store Design: Each Chaayos outlet is designed to create a cozy and inviting ambiance. With comfortable seating, warm lighting, and decor that mixes modern aesthetics with traditional Indian elements, the stores provide a homely vibe for enjoying a cup of chai.

3. Products:

Customizable Chai: I’m sure you have a particular way in which you like to consume your chai. (I like mine with cardamom, pepper, and lemongrass!)Chaayos allows customers to create their own perfect cup of chai with over 80,000 possible combinations.Customers can choose the type of tea, sweetness level, milk preference, and additional spices. Unique Blends: They offer a variety of unique tea blends like “Aam Papad Chai,” “Hari Mirch Chai,” and seasonal specialties that keep the menu fresh and exciting. Snacks: Instead of offering burgers and fries as all cafes do, Chaayos wanted to take the experience a step further home. It complements its tea offerings with a range of snacks traditionally had with tea in India like Bun Maska and Toast.Every quarter, they also add new items to the menu to keep the consumers coming back for more.

4. Customer Experience:

In-Store Experience and Ambiance: Comfortable and Inviting Atmosphere:Chaayos outlets are designed to be cozy and inviting, with comfortable seating, warm lighting, and a relaxed vibe.This makes them ideal spots for casual hangouts, meetings, or solo tea breaks. They also made a Spotify playlist to help with relaxation. Hygiene and Quality: Maintaining high standards of hygiene and consistent product quality is a priority, addressing one of the primary concerns with traditional chai vendors.

5. Technology Integration:

Mobile App: Chaayos has developed a user-friendly mobile app that allows customers to order online, customize their chai, and track their orders.The app also features a loyalty program where customers can earn and redeem points.It is simple: You get 10 points on every purchase and can get a free chai for 60 points!This encourages customer retention and brand loyalty. Chai Monk: I have never made the same tea twice. Then how does a company like Chaayos maintain consistency?They use an AI-based tea bot that uses Internet of Things to ensure an invariable taste. Online Ordering and Delivery: Partnering with food delivery platforms like Swiggy, Chaayos ensures that customers can enjoy their favorite chai and snacks from the comfort of their homes.

6. Pandemic Entry into Retail:

Packaged Teas: To cater to customers staying at home, Chaayos launched a line of packaged teas. These products allow customers to enjoy their favorite Chaayos blends at home.

Source: Chaayos

E-commerce Platform: Chaayos developed an e-commerce platform to sell their packaged products online. This move not only boosted revenue during the pandemic but also expanded their customer base beyond the geographical reach of their cafes. Partnerships with Retail Chains:By partnering with major retail chains and supermarkets, Chaayos ensured wider distribution of their packaged products.

Instagram Strategy:

Currently, Chaayos has 45.4K followers on Instagram.

They also collaborated with Swiggy to create a post like this:

Source: Instagram of Chaayos

However, the engagement rate on their posts is very low. To tackle this, they can:

Remove inactive subscribers so that the posts reach the relevant audience. Include more engaging posts with quizzes and other gamification strategies. Partner with relevant influencers to boost reach and increase credibility.

In a Nutshell:

Chaayos’ billion-dollar journey is a testament to the power of understanding your audience’s needs and exceeding expectations.

They redefined the humble cup of chai, offering personalization, quality, and a comfortable haven.

Their multi-layered marketing strategy, from targeted branding to app integration, shows the importance of a holistic approach.