Startup Stage: Revenue Generation

Structure of the Company: PVT Ltd.

Website: https://www.teainntech.com/

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Business Overview

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Executive Summary: Tea Inntech is one of India's first B2B E-Trade platform that is using unique and innovative technological infrastructure to fetch a better price for agricultural produce especially Tea at a cheaper cost in terms of resources and overheads and at the fastest turn around time. The success of this platform will not only help producers maximize their profitability but also onboard 700 million kgs of tea produce that moves privately through unorganized means due to lack of a digital platform for private sales and procurement. It is a supplier to buyer module, where sellers can sell their teas directly to the listed buyers without middle-men using various features available on the platform to achieve a optimum price realization. Tea Inntech has been fully operational since December 2020 and total deals made on our platform directly between suppliers and buyers have crossed 21 crores. Since it is an unmonetized platform, we do not have a turnover yet. However the proposed service charge will be 0.5% of the total transaction value levied on the supplier. The existing brokerage in the industry is at 1% along with other overheads which is unreasonably higher to that of Tea Inntech. More than 50% of Indian tea produce sells privately which is estimated to be of 10000 crores. In the next 3 years, if Tea Inntech can tap 35% of this entire pie given that there are no other players as of now, it will generate a revenue of 17 crores. Going forward it will not only result in wealth creation but also significant value addition for producers and buyers thereby opening up employment opportunities for tea tasters, auctioneers, software engineers, administrative executives and so on.

Market need: India’s 170-year-old tea industry is gasping for survival and needs the government’s help to reverse the downtrend, members of the Consultative Committee of Planters’ Associations said. Climate change, the CCPA said, has added to tea price stagnation, increasing labour and other input costs, mismatch between demand and supply leading to oversupply, high transaction costs and fair price discovery challenges at the auctions. The above is a cut out from an article published by The Hindu which emphasizes the rising costs and reduced profitability of farmers. Tea Inntech is not only solving the problem of fair price discovery challenges in both auction and private sales but also focuses on reducing overheads at the fastest turnaround time thereby maximizing profitability of the producers.

Product/Service description: Having worked in J thomas and Co. (The largest and the oldest tea auctioneers in the world) for more than 3 years and understanding the problems of the industry, is when Tea Inntech was started back in 2020. Being a supplier to buyer model, thereby eliminating middle-men and inefficiencies, Tea Inntech reduces every overhead of a supplier to the bare minimum thereby maximizing the profitability of the suppliers. More than 50% of Indian tea produce is unorganized and sells without any digital platform giving rise to various issues of incorrect price discovery to high sales and procurement costs. Tea Inntech focuses on not this unorganized sector as well as the organized sector for significant value addition. The vision of our company is to achieve an optimum price for producers at a reasonable cost in terms of resources and over heads at the fastest turnaround time thereby maximizing profitability. The solution is in the form of a unique and flexible technological infrastructure and its distinctive features which is only available on Tea Inntech and no where else in the Industry. Not only are we using the most advanced technological recipe to come up with a product of this kind to provide a service incomparable. Therefore Tea Inntech is one of India's first B2B E trade platform for private sales and procurement. Few of the features include a) List of buyers from which a supplier can choose strategically on the basis of their buying pattern to save sampling costs. b) Cross bidding - A supplier may offer the same produce to multiple buyers thereby creating competition to achieve an ideal price discovery. c) A supplier can offer and transport teas directly from the field to the respective buyers thereby eliminating supply chain inefficiencies. d) A buyer may place his highest buying price while automated bids are placed at intervals on his/her behalf thereby reducing procurement time and costs.

Customers/Users: The target customer segment covers the entire clientele involved in producing 1300 million kgs of Indian tea production. Each producer today is conscious of the rising cost of production and diminishing profit margins only adds to the worry. Therefore maximising profit margins through effective module of sales and marketing is the need of the hour. The biggest challenge in building an ecommerce business is to initiate the chicken and the egg effect. We were fortunate enough to crack the resistance with ease and as on date we have more than 40 registered and operating buyers on the platform. With a wide buyer portfolio we are increasing our supplier base. With an increase in the supplier portfolio it will induce more buyers to participate ultimately increasing our overall quantity. We are reaching out to more and more buyers through video marketing and because tea is a small fraternity we are also spreading through word of mouth.

Revenue Model: As of now the total deals between suppliers and buyers is approximately 21 crores on Tea Inntech and because it is an unmonetized platform we have not generated any revenue so far. Having said that with our recent client acquisition of Amalgamated plantations (A Tata Enterprise), we will now be levying a service charge of 0.5% on the total transaction amount. Service charge of middle-men along with other overheads are unreasonably higher as compared to ours. Going forward the revenue potential of Tea Inntech is humungous having a first mover advantage. Even if 35% of the unorganized sector is tapped within the next few years, a revenue generation of approx. 17 crores becomes inevitable, while the potential of the organized sector is no less.

Current traction: We have worked with the world’s largest and oldest auctioneers J Thomas and company and signed a user agreement with them. Largest exporter of Orthodox tea Mk Shah Exports are working with us along with India’s second largest producer Amalgamated plantations (A Tata Enterprise). We recently signed an engagement letter with the world’s largest producer of Darjeeling Tea – Darjeeling organic tea estates private limited.

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Promoters' Information

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Products/Services