Chaayos Startup Story - More Than Just a Cup of Tea

Chai is much more than a cuppa tea in India. It's something that folks sip to begin their mornings; it is a required beverage to wake you up every morning and a nourishment drink with midday treats. Our generations have dabbled with Tea and its flavours; there's a distinct meaning of a fine balance for every 'chai lover.' Folks sip chai across every home in this nation, regardless of social status, or, to put it differently, a type of brew that is required to keep them going.

Although chai is such a vital and well-known beverage, we have never noticed a well-known label or chain outlet devoted solely to chai. There are around 35,711 Starbucks stores across the globe, as per news reported by Statista in 2022, and you couldn't get a lovely and clean cuppa in a café with a pleasant atmosphere. Folks had to rely on their homes or any curbside shop to get their favourite cuppa. This is the underlying spark that supports Chaayos.

"This was the key aspect behind Chaayos—to have a spot where you can go get a vibrant clean cuppa made according to your preference with a nice, cozy setting," says Nitin Saluja.

In this article, let's explore the world of Chaayos—its founders, business and revenue model, funding, and more.

Chaayos - Company Highlights

Chaayos - About
Chaayos - Industry
Chaayos - Founders
Chaayos - How was Chaayos Started?
Chaayos - Logo
Chaayos - Business Model
Chaayos - Unique Selling Proposition(USP)
Chaayos - Revenue Model
Chaayos - Challenges Faced During Covid-19
Chaayos - Funding and Investors
Chaayos - Investments
Chaayos - Growth and Financial
Chaayos - Marketing Strategy
Chaayos - Advertisements and Social Media Campaigns
Chaayos - Competitors
Chaayos - Future Plans

Chaayos - About

Chaayos is a contemporary Indian brand that embodies the bold spirit of its creator, Nitin Saluja. Visitors adore visiting its well-furnished cafés to sip chai and sample various kinds. With true and delicious ingredients, Chaayos now makes it simple for anyone to enjoy their favorite adrak-elaichi chai at home. Chaayos may conduct enjoyable events, update the cafés with unique touches that pay homage to Nitin's design, and spread the word about the simplicity and genuineness of their homemade chai alternatives to improve things even more. For those who enjoy chai, Chaayos turns into the ideal setting for both at home and in cafés.

Chaayos - Industry

Indian food and beverage businesses have raised over $600 million in funding in a fast-paced expansion from 2014 to H1 2022. Future prospects appear promising; by 2025, it is predicted that India's e-commerce sector will grow to be worth $400 billion.

According to the findings from Inc42's "The State of Indian Startup Ecosystem Report, 2022," the food and beverage industry is leading the way and is expected to develop at a remarkable rate of 29% CAGR over the next three years. This highlights the dynamic and promising startup scene in India, especially in the food and beverage industry.

Chaayos - Founders

Chaayo's co-founders are Nitin Saluja and Raghav Verma.

Nitin Saluja

Nitin Saluja, co-founder of Chaayos, graduated from IIT Mumbai. Additionally, he is one of ThinkLabs' co-founders. He was employed at Opera Solutions prior to cofounding Chaayos.

Raghav Verma

Raghav Verma is a graduate from IIT Delhi. Having co-founded PrepSquare and having experience in Opera Solutions, his unique combination of technological know-how and business acumen has played a pivotal role in establishing Chaayos success.

Chaayos - How was Chaayos Started?

Chaayos is the brainchild of two engineers, Nitin Saluja and Raghav Verma. They worked for the US consultancy firm Opera Solutions. Nitin was a tea connoisseur.

During this time, they both met via a common friend who was also employed by Opera Solutions in the United States. They both discussed the concept and were compelled to put the weirdest idea on the startup's floor. They both resigned and poured their hearts and souls into their startup.

Nitin is in charge of product design and distribution networks, while Raghav is in charge of business growth and advertising. They called their company "Chaayos," and the first store was established in Gurgaon in November 2012.

It is very easy to think of Chai as an item. Consumers at Chaayos, on the other hand, can choose from 25 flavoured teas that can be customized in 12,000 diverse ways! The catchphrase is "Experiments with Tea." Their company believes in the customization of chai with a broad array of flavours. They have introduced a very special chai menu, or you could say they were willing to try something new.

The overall vibe of the stores is another significant aspect they have introduced to their biz. The café exemplifies the "Chai lifestyle." The interiors pertain to the very fundamental idea of chai; lamps created by cutting Chai cups, teapots, and Chai samples in a palette that demonstrate the firm's exploratory nature.

The top-selling Chaayos store generated a yearly income of Rs 1 crore. This was the most significant achievement in its business journey as per the news report of July, 2023.

Chaayos - Logo

Chaayos - Business Model

Chaayos' business model is reflected in its unique product, 'Meri wali Chai' which is a combination of quality, flavours, wholesomeness, and variety. It provides various types of tea flavours, including 25 tea types, and 12,000 ways to customize them.

Clients can also choose from a variety of add-on flavours. As a result, it offers personalized tea solutions based on the customer's preferences. It sells bundled snacks and chai mixes in addition to tea.

Its main audience includes both Gen-Z and Gen-Y clients, as tea is popular among both generations. The clientele comes from upper middle class and upper class backgrounds.

Chaayos - Unique Selling Proposition(USP)

Its USP is a very new and unique flavoured hygienic, customized tea. In addition, the label has other facets of USP, such as:

A Deluxe Outlet Ambience

The ambience inside cafes is both stresses relieving and calming. With appropriate background music, reclining furniture design, etc., the label offers an ideal atmosphere to calm the mind while also working on projects.

Higher Output in Hardly Any Time

It functions on an approach to appreciate and gratify every client of every store, which served as the label's USP in generating high results. Various snacks provided by the company, such as Maggie, Sandwich, Wada pav, etc., have also attributed to its faithful and repeat clients. The label has achieved the rapid accomplishment of its tactic of combining creativity, innovativeness, and exploring with chai that surpassed expectations.

Advanced Response Framework

It has incorporated a well-defined task control program that integrates usual customer reviews, prompt actions on bad reviews, and so on. The team is well-educated and well-trained.

Diversified Menu

It offers a diverse selection on its menu. Originally serving various flavoured teas, the brand has since augmented to serve a variety of snacks and meals to both Indian and foreign clients. They also use Kulhads to serve chai in an environmentally friendly manner.

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Chaayos - Revenue Model

Within a quarter of the company's launch, each store begins to profit. That year, the company's sales increased by 30%, which includes total sales of chai and nibbles, i.e., about 4–4.5 lakh cups, i.e. approximately 2 lakh units. It made Rs 52 crore in income in FY18.

The label also makes money by serving chai on demand, which accts for 20% of total earnings. They also supply approximately 300 boxes of bundled chai blends weighing 100 gm each. The cost for each box is Rs 200.

Chaayos - Challenges Faced During Covid-19

Eateries were struggling financially due to low foot traffic and rising rents. Few were working on a revenue-sharing rental contract; instead, some were returning to the local shops. Many people prefer food delivery because buyer complacency is lower in this case.

These difficulties have not spared Chaayos. The shops were closed for the entire span of the quarantine, and in-store sales were still marginal. However, the online ordering biz restored to 40% of pre-COVID levels. Regardless of the difficulties, its kept its stores open.

Rent agreements have played a significant role in keeping it stable. Well before the pandemic, 40% to 45% of its shops had a revenue-sharing agreement for lease, which was beneficial in this scenario. Even where there's no income sharing contract, Chaayos has requested exemptions because the landlords don't have several bidders for these spots in that situation.

It has created an online delivery app to help people in pre-ordering and thus avoid long lines. Because of the strong tech involved, they've been able to easily transform into contactless operations.

Chaayos - Funding and Investors

In eight investment rounds, Chaayos has raised $85.5 million as of June 13, 2022.

Here is the company funding details:

Chaayos - Investments

To date, Chaayos has invested in just one company. On May 31, 2022, it made an $1.5 million seed round investment in Fitelo.

Chaayos - Growth and Financial

Its adventure began by starting its very first shop in DLF Cyber City in Gurgaon, Delhi. They operates with 200+ stores in Mumbai, Delhi, Bangalore, Pune, Hyderabad, Chennai. As of 2015 news report, between 4,500 and 5,000 walk-ins per day visit Chaayos 11 locations. Company has strong 1,001-5,000 number of employees.

Financial

Expenses

Chaayos total expenses rose from Rs 211 crore in FY22 to Rs 349 crore in FY23.

EBITDA

Chaayos - Marketing Strategy

The advertising tactic of Chaayos involves both offline and online promotional tactics. For virtual advertisements, the brand makes good use of digital marketing tools such as social media and e-mail marketing. Buyers near stores or walk-ins are the focus of its offline marketing plan. Its loyalty program is for satisfied clients, and this advert applies to all stores.

Online

It is utilizing an online media forum for its promotions, i.e., brand visibility and customer acquisition to improve customer care. This is also their strongest asset, as they manage client queries swiftly and effectively. The following are some of the online platforms that the firm uses for promotions:

Facebook

With good number of fans and supporters, its Facebook page which was initiated in 2012, is now the absolute forum for its marketing events. Chaayos uses this platform to connect with its audiences by allowing them to share ideas, recommendations, tales, etc. in an open chat forum. The label also promotes its activities on this virtual media site.

Instagram

It communicates with its customers and fans via Instagram. With a good number of Instagram fans, they're using this online media tool for a variety of adverts. It frequently posts pictures of various famous visitors or celebs who visit their stores, as well as styles and displays e-cards for festive purposes.

Twitter

It also has a Twitter following. The label deals with customer inquiries on this app daily. It also serves its users with e-coupons for new tea varieties, and supporters or clients can create their customized tea with Chaayos tea packs and tell their stories on Twitter. The company launched a Twitter hashtag called Experiments with Chai that has increased its clientele in Chaayos stores by 25%.

YouTube

It makes good use of YouTube for promotions. To connect with people, brand innovators share their insights and progress stories regularly via short video clips on the channel.

Offline:

Aside from the aforementioned, Chaayos also conducts promotions with fitness centers and supermarkets.

Chaayos - Advertisements and Social Media Campaigns

Chaayos mein Tai Chai? #AisaBhiHoSaktaHai

The Chai Frappe is a new summer beverage from Chaayos, with the equally distinctive and energizing campaign hashtag #AisaBhiHoSaktaHai. With an unorthodox take on what to expect at Chaayos, the #AisaBhiHoSaktaHai campaign challenges stereotypes and encourages people to think beyond their constraints while celebrating creativity and ingenuity.

Chaayos - Competitors

Its direct rivals are Chai Point and Chai Sutta Bar. The company's competitiveness over its rivals is based on its deluxe ambience of stores, efficient delivery, better results in a shorter timeframe, fully personalized products, and a diverse menu for both Regional and Global tastes.

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Chaayos - Future Plans

Within the next three years, it intends to grow from 90 to 300 cafés. Expansion, on the other hand, can be difficult to manage in the food industry. Many companies experience lower client satisfaction as their retail footprints expand due to inconsistency or poor service. Chaayos, on the other hand, has invested in new tech to assure that uniformity is not a concern.

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FAQs

Who is the founder of Chaayos?

Nitin Saluja and Raghav Verma are the founders of Chaayos.

When was Chaayos started in India?

Chaayos was founded in 2012 by Nitin Saluja and Raghav Verma.

What is special about Chaayos?

Chaayos has many chai flavours, the company experiments with different chai flavours. Also, it offers a unique ambience in its cafés to its customers which is calming and stress relieving.