India is the second-largest producer of tea, globally, after China. India grows some of the world’s finest teas, which is 25 percent of the world's production. However, there was no brand that was taking tea to the world under a homegrown label. Also, there were several challenges with the supply chain of the product — tea loses flavor with time. The product was reaching consumers after months and years of being harvested in India, and hence, customers were getting the product that was not at par with their expectations as the freshness was going away. This gave an opportunity to a brand like Vahdam India to disrupt the supply chain, cut out all middlemen, source direct, and deliver direct. Vahdam India was started in 2015 with a vision to take Indian teas to the world.
Vahdam India has made market entry via an online channel. Digital channels let the brand micro-target the market and help it to compete with the big brands as brands come under the same pedestrian when they bid for a click on Amazon, Facebook, or Google.
“There are multiple benefits of going through online as the digital channel has democratized the entire process of consumer brand building. If we look at the distribution strategy 10 years back, the only way to build a global brand was to go to America or go to any of the global markets, set up a shop, and launch your products. But with the internet, you could sit out of India, reach every state and every city potentially in the world,” Bala Sarda, Founder, and CEO, Vahdam India said.
The brand’s main focus is on the tea category. It is also experimenting with complimentary categories like spices and herbs. Currently, Vahdam India offers around 250 SKUs
“We sell almost 80-90 signature blends of loose tea leaves and tea bags, apart from a bunch of products like turmeric lattes, matchas, gifts and assortments, and tea accessories to add to the experience,” Sarda stated.
Focus on Marketing
The brand is primarily focusing on digital media as it helps Vahdam micro-target. Digital media also helps us to reach out to more consumers. Besides, one of the core things that it does as a brand is sampling. “Given ours is a consumer product, we do a lot of brand sampling in every market. We do partner data sampling through a bunch of methods that get us the highest ROI in terms of our brand marketing initiatives,” Sarda noted.
Additionally, the brand also does an annual national campaign in key markets right before the holiday season to get at the top of the mind of the consumers that it is looking to target.
A Way Ahead
Vahdam India has ended FY 2021 with net revenue of Rs 159 crore, up from Rs 75 crore in FY 2020, registering 110 percent YoY growth. The brand also achieved net profitability in FY21. “We are targeting to deliver Rs 500 crore in revenue by FY 2024. We see ourselves growing 40-50% YoY over the next two to three years,” Sarda asserted.
The brand is present in around 1500 stores globally. It ships to 132 countries currently. The majority of its revenue comes from the top five markets — Canada, North America, the UK, Germany, and India. “We are doing a launch in the UK in May and this would be our first retail launch in the European region,” he added.
India is not a part of the brand’s core strategy right now. Almost 5-7 percent of its business comes from India. “We will be focusing on digital channels in the Indian market. Apart from our website, we sell on e-commerce marketplaces like Amazon, Flipkart, and BigBasket. We further plan to launch our own experience store over the next 12 to 18 months,” Sarda concluded.