Chaayos
in the UK
Group 6
COMPANY PROFILE
200+ 80000+
Cafes in India. Aiming to reach Ways in which chai can be personalised
Sunshine Teahouse Private Limited
400 by next year with different ingredients
aka 'Chaayos', was founded with a
vision to create unique tea
experiences for the Indian 237 Cr $93.9M
Customer Revenue attained in FY’23, an Total funding received over 14 rounds,
impressive 75.6% growth from latest being a series C funding of $53M
Launched in Nov 2012, company FY’22
has kept its core focus on
personalization (Meri Wali Chai)
and premium ingredients, along
with snacks in product portfolio
TARGET MARKET- UK
The strategic expansion presents a unique opportunity
to captivate British tea drinkers with unparalleled
customization and a vibrant cafe experience.
Market Potential
Long standing tea culture with high
consumer demand, average annual
supply of 1.9 kilograms per capita
USP & Product Portfolio
A unique tea experience – “Crafting your own tea, Just the way you
like it” – that too served on the go, warm and freshly made-
Strategic Fit limitless customisation possibilities and authentic flavours.
Chaayos’ focus on personalisation
and high quality ingredients aligns
perfectly with growing demands for
experiential offerings in UK
INDUSTRY ANALYSIS- CAFE INDUSTRY (UK)
ECONOMIC FACTORS CULTURAL FACTORS
Market size and growth Tea Habits
Valued at £10.2 billion (USD 13.03 billion) in Consumption mostly in tea bags (97.5%)- not
2023 consumed on the go
Expected CAGR of 5.27% until 2028 for English Breakfast Tea is by far the most
chained cafe players in the UK popular blend followed by Earl Grey and
Green Tea
Consumer Spending Regional Values
Consumer spending in cafes have increased Urban dwellers preferring customization and
by 31% post pandemic: rising inflation and innovative cafe approaches
cost of living are pressing concerns Scottish emphasize tea as an afternoon ritual
Consumer confidence: slightly below pre- with snacks , deeply blended in Irish culture
pandemic levels-expected to gradually as a symbol of hospitality & camaraderie
recover in the coming years
Immigrant Population
Trade factors
Large proportion of Indian, Pakistani , Chinese
Strong economic cooperation between India and & Turkish diaspora - few countries with high
UK- ease of registration & running business consumption of tea
Exempt sugar tax through provision of high Conflict of collectivism vs individualism in
calcium (milk content) marketing strategy
INDUSTRY ANALYSIS- CAFE INDUSTRY (UK)
POLITICAL FACTORS LEGAL FACTORS
Market size and growth Tea Habits
Valued at £10.2 billion (USD 13.03 billion) in Consumption mostly in tea bags (97.5%)- not
2023 consumed on the go
Expected CAGR of 5.27% until 2028 for English Breakfast Tea is by far the most
chained cafe players in the UK popular blend followed by Earl Grey and
Green Tea
Consumer Spending Regional Values
Consumer spending in cafes have increased Urban dwellers preferring customization and
by 31% post pandemic: rising inflation and innovative cafe approaches
cost of living are pressing concerns Scottish emphasize tea as an afternoon ritual
Consumer confidence: slightly below pre- with snacks , deeply blended in Irish culture
pandemic levels-expected to gradually as a symbol of hospitality & camaraderie
recover in the coming years
Immigrant Population
Trade factors
Large proportion of Indian, Pakistani , Chinese
Strong economic cooperation between India and & Turkish diaspora - few countries with high
UK- ease of registration & running business consumption of tea
Exempt sugar tax through provision of high Conflict of collectivism vs individualism in
calcium (milk content) marketing strategy
Global Marketing Strategy
Market research
Lack of a dominant brand, with clear majority.
Moderate fragmentation. Good opportunity to
establish itself through differentiation
Consistently growing market - revenue and user base
Consumer research
Consumer demographics by age, gender, and income -
almost uniform in nature. Slight peak in usage pattern Purchase - dominant offline behavior, with affinity for
between the age of 20-60yrs. Mobile purchase in online behavior
Consumer research - Perceptual differences on Tea
India United Kingdom
In India, tea is for everyone, It's a common
In the UK, tea holds a special place in
drink that brings people together, no
our culture. For us it is a timeless
matter their background. Tea stands for
symbol of British hospitality and
humility, simplicity, signalling a break
refinement. From intimate
from the grind. From street corners to
conversations to grand occasions,
fancy homes, tea is a part of our daily life. afternoon teas bring people together
In India, tea - available widely in all corner shops - is a more In the UK, it is often more of a luxury item, with a focus on
affordable option for a wide range of consumers - is premium and artisanal teas- it is usually taken with an
consumed daily by a large group from varying socio- accompaniment of scones, cakes and biscuits -
economic backgrounds symbolising stature and refinement.
In India, tea is commonly perceived as a rejuvenating In the UK, tea is often perceived as a comforting and
beverage, often flavored with spices such as cardamom, soothing drink, especially in moments of relaxation or
cinnamon, and ginger. social gatherings - and often has a milder taste.
Tea is often brewed with milk, sugar, and spices, then The UK predominantly consumes black tea, which is
boiled together to create a flavorful concoction. typically brewed with boiling water and served with milk and
sugar according to personal preference.
Segmentation Targeting Positioning (STP)
Segmentation (Current)
Demographic segmentation :
Young adults - (18-35 years) prioritising graduates and young
working professionals, business owners
Upper middle class to higher income earners Expand age segment - to 18-50 yrs
Urban residents - primarily in metro cities, urban centers. (based on usage distribution)
Psychographic segmentation : Group/segment - people interested in sophistication and
Busy individuals seeking relaxation and break from daily leisurely indulgence. (As tea is not seen as a quick
routine pick-me-up within British culture)
Consumers who appreciate diverse flavours, and are into
customisation and personalisation Recognize importance of occasion-based tea
ceremonies- afternoon tea gatherings, and meetups
Based on usage:
Customers looking for a meetup place, apt for socialising and
networking
Customers looking for a calm place to chill, and relax with a
cup of tea.
Segmentation Targeting Positioning (STP)
Targeting (Current)
College students residing in
metro cities, with disposable
income and a preference for
Affluent urban dwellers, who appreciate high
premium dining experiences -
quality tea, and consider themselves to be
with personalisation
opportunities tea-connoisseurs (with high WTP) can be
included within the target segment.
Professionals with
disposable income, looking
for a refreshing break during
work hours or conducting
informal meetings.
Segmentation Targeting Positioning (STP)
Positioning (Current)
"Meri Wali Chai" - personalised tea
experience with over 12,000 Position as a immersive tea experience for tea lovers,
customization options to meet, make merry and socialise - while consuming
high-quality tea in an elegant and ambient environment
Chai as a source of relaxation and
rejuvenation - a place to chill amidst
the chaos
Focus on quality ingredients, with
prioritisation for uniformity,
innovation and eco-friendly
practices
Our Product Offering
CHAI
+ = RELAX
SNACKS
Premium Ambience: Every Cafe is uniquely designed
Broad Menus to suite Western & Indian Palette Highly Customizable products & other offerings
Specially Delivering Hot
assorted Gift Served over Chai in
box from the 20 CRORES+ Specially
house of Chaayos Chai till date Designed Kettle
Customization for UK Market
Introduce Functional Herbal Teas
Offer teas with added probiotics, fiber, and botanicals for specific health benefits.
Target gut health, mental health, detoxification, and relaxation trends.
Emphasize Taste and Flavor Variety:
Blend green tea with popular flavors like peppermint, lemon, or pomegranate.
Explore unique flavor combinations to appeal to diverse customer preferences.
Expand Decaffeinated Options:
Introduce a variety of decaf black teas.
Cater to consumers seeking caffeine-free alternatives without compromising taste.
Customize Indian snacks to satisfy British Taste Palette:
Introduce British snacks alongside Chayoos' existing offerings (Mini Naan Pizzas, Samoosas)
Widen customer appeal and provide a taste of both Indian and British culinary traditions.
Capitalize on Cold Brew and RTD Tea:
Introduce innovative cold brew tea flavors & bubble teas.
Offer convenient RTD options for on-the-go consumers looking for refreshing beverages.
Ambience & Experience
Offer an environment where customers can socialize, work, or unwind while enjoying their tea.
Incorporate elements of British tea culture into the cafe's design, such as cozy seating areas,
vintage teapots, and elegant tea sets.
Pricing Strategy
Economics Factors
ECONOMIC FACTORS
Graph-1: Graph-2: Graph-3:
Inflation rate for the CPI in UK from Sept Inflation rate for food in UK from Exchange rate from May 2020 to
2000 to January 2024 March 2015 to Dec 2023 Feb 2024
Current Inflation rate: 3.6 %
Food inflation rate: 6.9 %
Both rates are on the higher side
for a developed country.
After Brexit, fluctuation in the
exchange rate is relatively higher.
Fig. India and UK trade relation (Impacting
the export pricing factors)
Pricing Strategy
Market Factors
ECONOMIC FACTORS
Medium to High (Varied income levels, price-
Demand Elasticity High (Varied income levels, price-sensitive consumers)
sensitive consumers in certain segments)
High in the British Tea segment. Low to Medium in
Competitive Landscape High (Diverse market players, price competition)
the Indian Chai segment.
Strategic factors
High (Varied tastes, regional preferences, price High (Varied tastes, cultural nuances, stickiness
Consumer Preferences
sensitivity) with brands is high)
High (Diverse offerings, Emphasis on quality and
Chaiiwala Chai Guys
Product Differentiation High (Variety of offerings, regional specialties) £4 £6
authenticity)
Cha Sha Dishoom
£2 £3.2
Cost Factors
The Kati Roll Company
£1.25
Cost of Production Low to Medium (Varies based on sourcing, labor costs) High (Higher labor costs, regulatory compliance)
Operating Expenses Medium (Varies based on location, scale of operations) High (Rent, utilities, labor costs)
Low to Medium (Varies based on import regulations,
Import Duties and Taxes High (Import duties, tariffs, VAT)
duties)
High (Currency fluctuations, currency risk
Currency Exchange Rates Low (Stable exchange rates, minimal currency risk)
management)
Pricing Strategy
Initial Phase : Market Holding Strategy
Stability: Ensures stability in pricing, avoiding potential price wars and market
disruptions.
Competitive Positioning: Allows Chaayos to establish itself as a competitive player
in the UK tea cafe market.
Market Penetration: Attracts a wider customer base with competitive pricing,
fostering initial brand recognition and loyalty.
Consumer Acceptance: Aligns with consumer expectations and market norms,
reducing resistance to price changes.
Future Phase: Market Skimming Strategy
Brand Recognition: Capitalizes on established brand recognition and customer
loyalty built during the initial phase.
Perceived Value: Positions Chaayos as a premium tea cafe brand offering
unique and authentic experiences.
Maximized Revenue: Extracts maximum value from customers willing to pay a
premium for high-quality tea and cultural experiences.
Profitability: Enhances profit margins by leveraging brand equity and premium
pricing strategies.
Global Distribution - UK
Influencing Macroeconomic Factors
01 02 03 04 05
Market size and Economic Stability & Cultural Preferences Regulatory Competitive
Growth potential Consumer Spending & Trends Environment landscape
Chayo's can Chayo's can Chayo's can Adhering to
The UK tea market
leverage leverage UK’s capitalize on this regulatory
is highly
substantial tea stability in trend by offering a standards ensures
competitive, with
market growth with consumer spending diverse range of consumer trust and
both local and
growing demand patterns, to teas catering to brand credibility,
international tea
for specialty teas establish a strong various tastes and crucial for Chayo's
brands vying for
and unique tea foothold and drive preferences. compliance and
market share
experiences. sales growth market entry
How to reach customers?
Location: Choose prime areas with high footfall such as city
In India, Chaayos used to have a franchise model. As of centers, shopping districts, and business hubs. Proximity to
2022, they stopped giving franchises. public transportation and parking availability should also be
considered.
Scalability:
Strategic Partnerships: Establish partnerships with local
The Clustered approach (depth first, breadth later)
businesses, universities, and organizations to increase
visibility and attract customers
An important aspect of the distribution Model
Multi-Channel Marketing: Utilize digital marketing
channels such as social media platforms, SEO, email
marketing, &guerrilla marketing techniques to create
awareness and drive foot traffic.
Customer Experience Enhancement: Focus on delivering
A Deluxe Outlet Ambience Diversified Menu Advanced Response an exceptional customer experience that differentiates
Framework Chayoos from traditional cafes
Chaayos provides online delivery of tea for homes and offices. Loyalty Program: Implement a customer loyalty program to
There is a mobile app for B2B subscription reward repeat visits and encourage brand loyalty. Offer
incentives such as discounts & freebies
Advertising - India
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.
80% Digital Spend 20% OOH Spend
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.
Advertising - UK
Influencing Macroeconomic Factors
01 02 03 04 05
Local Partnerships Localised Marketing Delivery Traditional
Digital Marketing
& Events Campaigns Platforms Advertising
Utilize social Utilize visually
media, SEO, and appealing ads
Collaborate with Customize
targeted online ads Partner with food showcasing Chaayos'
local businesses messages and
for potential UK delivery services. authentic Indian chai
and organizations. promotions for UK
customers. and snacks
consumers.
Ensure a seamless
Sponsor or
Create engaging online ordering Target print media &
participate in Highlight unique
content experience. outdoor advertising
cultural festivals aspects and appeal
showcasing spaces in areas
and food events. to local trends.
Chayoos' offerings frequented by
and ambiance. potential customers.
Global Brand Personality
Sophistication:
Charming Retain Sophistication
“Chaayos is a charming tea shop!”
Global Brand Personality
Heritage: Sincerity:
Nostalgia Cheerful/Wholesome
“Tea reminds me of home.” “Tea makes me happy.”
Nation Equity
Take advantage of the natural associations of tea with India. Indian culture is also known for its warmth to guests:
Athithi Devo Bhava.
Halo Effect: Book-keeping Model
Warmth
Positive Emotional Highlight Country
Equity of Origin
