The tea café chain’s vastly improved sales display the growing opportunities for premium cafés in the country – but widening losses reflect wider challenges in the global economy
Chaayos’ growth reflects the increasing demand for premium café experiences among Indian consumers | Photo credit: Ayush Sharma
India’s Chaayos has recovered from difficult 2021 trading, posting strong revenue growth for the 12 months ended 31 March 2022.
The tea café chain generated revenues of Rs 135 Cr ($16.5m) in the period – 145% higher than the Rs 55 Cr ($7.7m) reported for the same period in 2021.
However, the company’s operating loss increased by 37% to Rs 71 Cr ($8.7m) following an 85% increase in expenses.
The greater outlay was attributed to rising raw materials and wages costs alongside increased rental expenditure due to outlet growth.
Although Chaayos’ 45% fall in revenues in 2021 was reflected trading restrictions on Indian café and hospitality trade during the pandemic.
The company has, however, continued to achieve growth. In June 2022, Chaayos raised $53m in Series C funding, led by Alpha Wave Ventures, to expand its café footprint and explore new domestic markets.
The tea café chain reached its 200-store milestone in India the following month and announced a target of operating 400 outlets by the end of 2023.
Chaayos’ success reflects increasing demand for premium café experiences among Indian consumers.
In October 2022 Starbucks saw its significant outlet growth and entered14 new cities in the country, The following month, UK-based Costa Coffee reported improved sales and outlet growth across India the following month.
Additionally, Canadian coffee chain Tim Hortons has set a target to 120 stores in India over the next three years, US-based Dunkin’ has launched a new store design as part of strategy to attract younger consumers and Australian coffee chain The Coffee Club will debut in India next year.