Traditionally retail businesses were limited to brick-and-mortar stores and were routed through distributors but with the advent of E Commerce, it has become relatively easier for beverage manufacturers and companies to engage directly with customers and prospects. This change has been largely fueled by the COVID 19 pandemic, where producers recognized the need to ship their produce to consumers through the online route. This has led to brands gaining important insights about their consumers, through the D2C model, and therefore understand their demands and preferences better. Deep consumer insights are the game changer that will allow brands to get the best possible outcome for their marketing spend.
For us at Luxmi Tea, we saw a tremendous spike in the sale of tea at the onset and during the pandemic. People who would usually drink tea from cafes and QSRs were compelled to start making tea at home. With this came the customer also realized the importance of the quality and health benefits of tea and thus became interested in the source as well. Since we ship freshly harvested teas from our estates in Assam, Darjeeling and Rwanda, we quickly reconfigured our supply chain mechanism to meet the spike in domestic consumption through the online route.
With in-depth knowledge about customer interests and behavior, comes customization and personalization of products and services which were previously impossible with the traditional retail model. With healthy eating coming to the forefront even before the pandemic, the consumption of green tea was growing by almost 60% year on year. In the past one year, there has been an almost insatiable demand for green tea blended with immunity boosting herbs and botanicals which aid in boosting immunity. Had tea manufacturers relied on conventional supply chains for this vital need to filter back to them, it would have taken a very long time to launch such a product line as compared to the online model of business where data availability is real time.
According to DataReportal, there were 687.6 million internet users in India in January 2020. The number of internet users in India increased by 128 million (+23%) between 2019 and 2020. With an ever-increasing customer base, beverages, along with food, has become the leading product category in E Commerce in India.
We are spoilt for choice when it comes to E Commerce technology which has made it relatively simple for companies to sell their goods to all parts of India and also tap into global markets. To be able to provide a discerning consumer with fresh teas that are free from pesticides and harmful chemicals has now been made possible through online marketplaces and company owned E Commerce websites. New brands have mushroomed online with several large players offering personalized and innovative wellness centric beverages in various packaging options. Educated customers have become more conscious about they consume and therefore do not object to the increased spend while opting for a beverage specific to their needs.
We are witnessing early days in the digitization of the beverage industry and products will continue to become more personalized and customer centric. There are challenges faced by out sector are the quick delivery of goods, solving the last mile problem and reducing the costs of logistics, especially same day delivery costs.
The digital implements that are accessible today make e-commerce a far more scalable model than what traditional retail could ever offer. Internet based businesses have a long way to go in terms of gaining market share as compared to their offline counterparts but are definitely becoming a formidable force to reckon with.
With these many advantages on offer for everyone in the beverage industry, through the online route, there is great potential for almost everyone to experience phenomenal growth. Beverage start-ups, established brands and large-scale manufacturers have had a fair share of success through e commerce and it is believed that this is just the beginning and the best is yet to come.