IIT-incubated CuppaTrade brews digital disruption in tea sales

While the Indian tea market is dominated by auctions and private sales, CuppaTrade — the IIT-Kharagpur incubated start-up — is looking to digitise tea sales through its B2B platform.

The CuppaTrade platform, which aims to connect small tea producers and last-mile buyers, went live last week. Set up last year by Sandip Thapa and Mihir Gandhi, professionals with experience in tea and B2B platforms, the boot-strapped CuppaTrade says its helps tea producers gain premium rates, while reducing costs for buyers.

“Our focus is clearly on the small tea growers, co-operatives and small tea producers who do not have the means or knowledge to reach out to markets at large and are exploited by a handful of traders, packeteers and exporters. On the other hand, there are many buyers who do not know so much variety exists at several price points, simply because there is no platform or entity that has exposed the small tea buyers to such teas. CuppaTrade is bridging this gap,” said Thapa, co-founder and CEO of the company.

The platform has registered over 900 buyers and over 300 small producers from Assam, Arunachal Pradesh, Nagaland, Kangra, Nilgiris, and Nepal.

“Our objective is to reduce the current sales cycle time by 90 per cent, curtail cost of sales by 80 per cent, while making the procurement cost cheaper by 70 per cent,” Thapa said. CuppaTrade says it has reduced sales costs to Rs 2-2.5 per kg as against Rs 8-10 per kg in the current auction system. Similarly, the sales cycle time will be reduced to 2-7 days from the present 35-50 days, Thapa said.

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While registration is free for buyers, sellers are charged 1.25 per cent of the total transactional value. For the sellers, CuppaTrade will provide a cup score for their teas, based on samples provided.

The start-up is also working with IIT-Kharagpur on developing artificial intelligence-based models to help in price forecasting and address the issue of traceability, Thapa said. Besides, it has tied up with HDFC to address the issue of credit for both buyers and sellers.

Of the 1,350 million kg of tea produced in India, about 40 per cent is traded through auctions, and the rest through private sales. “The small tea producers are out of the auctioneers’, brokers’ ambit as their volumes are small, while auctions are not considered the best selling place for speciality tea manufacturers as they produce in small lots,” Thapa said.

“For sellers, the new platform seeks to deliver one-to-one negotiations, as in private sales, flexibility in sales exposure timing, package size, sampling and sample size, faster sales, 50 per cent reduction in costs of sales, increased buyer base, and direct pan-India and global market reach. For buyers, CuppaTrade will provide access to freshest tea due to fast sales cycle, large variety to choose from, complete traceability from factory to destination, and lower buying price for secondary buyers/semi wholesalers through better value distribution, consequent to reduced layers,” said N Dharmaraj, a tea industry veteran, mentor and advisor to CuppaTrade.

“I am quite convinced with the potential of this model to revolutionise the tea marketing space, having spent a couple of decades trying to reform the primary market structure for tea in India,” Dharmaraj added.