Bubble tea, a Taiwanese tea-based beverage, has been dominating the Asia Pacific and North America for quite some time, so the global bubble tea market has grown at a CAGR of 9% to reach $6.17 B by 2033.
This global drink has now gained a huge fan following in India. Social media platforms, especially Instagram, are reflecting this trend, with hashtags like 'Bubble Tea' and 'Boba Tea' collecting millions of posts.
Over the last couple of years, bubble tea has captured the interest of Gen Z in India, as have other global trends such as Turkish ice cream, Neapolitan pizza, K-pop burgers and ramen.
"In India, the bubble tea market is still in its nascent stage. But it's growing fast. In the next 10 years, I see this becoming a $3 to $4 billion market opportunity in India, "said Boba Bhai, Founder and CEO, Dhruv Kohli.
While global brands such as Chatime, Coco Fresh Tea & Juice and Lollicup US dominate the bubble tea landscape globally, India is witnessing a surge in small companies and small cafes entering this new segment. These up-and-coming players include Dr. Bubbles, The Bubble Tea Junction, Bubble Bee, Cha Bar, and Got Tea.
Following this trend, Chai Point recently launched its own bubble tea. Among these, a new start-up named Boba Bhai has emerged to tap into this emerging market.
Founded by Dhruv Kohli in 2023, Boba Bhai sells 45 flavours of bubble tea and K-pop burgers with an Indian twist. The company, which has 27 outlets across seven cities including Delhi, Gurugram, Udaipur, Bengaluru, Mumbai, Hyderabad and Chennai, currently has an annual revenue run rate (ARR) of Rs 24 crore and a monthly revenue run rate (MRR) of Rs 24 crore.
Kohli claims that the startup has generated a revenue of Rs 8 crore in the first six months of operation. By December 2024, he aims to reach Rs 60-65 crore in revenue and capture 75-80% of India's bubble tea market share.
So far, the startup has raised Rs. 12.5 crore ($1.4 million) from investors such as Titan Capital, Global Growth Capital UK, Arjun Vaidya, Mars Shot Ventures, DVC, Warmup Ventures, Varun Alag and Peerchek. Also, the monthly repeat rate is 45%, it is serving 60K customers per month and has over 4 lakh customers overall.
The story of Boba Bhai
Boba bhai has its origins in Kohli's obsession with bubble tea, who returned to India from Australia in April 2022. Kohli was surprised that the drink, which he had long frowned upon abroad, was a scarce product in India. Kohli, in fact, decided to launch this exotic drink into Indian palettes.
After spending three months with his R & D team, Kohli realised that there were no cheap options in the Indian market, and the products that existed at that time were very different and overpriced than the original products.
Recognizing the opportunity to satisfy the Indian palette and create a new market segment, Kohli looked at consumer preferences. Realizing that India's younger generation is the fastest growing market segment, Kohli targeted Gen Z and Millennials.
Initially started as a hobby project of Kohli, the project soon started attracting 40,000 to 60,000 customers per month.
Our vision is to not only build another F & B brand but also integrate bubble tea into people's lifestyle," Kohli said.
We realised that creating a category from scratch is not easy, especially with established giants like Cafe Coffee Day dominating the tea and coffee market. Despite the lack of resources and capital, we were determined to make our mark. "Our aim was not just to introduce another pizza or biryani, but to start a new category," "Kohli said."
Kohli faced significant hurdles while launching his start-up, especially in educating customers about bubble tea, as it was unfamiliar to many. Another obstacle for Kohli was setting up a supply chain from scratch in India. Kohli added that finding vendors to match the requirements and packaging of the bubble tea posed a huge challenge.
"In addition, the production process used in China, where bubble tea is usually served chilled and primarily by delivery, requires strategic partnerships with vendors. To address this, we have collaborated with vendors from different states, "the founder said.
To overcome these challenges, he focused on devising clear messaging strategies to communicate the benefits of bubble tea.
Boba bhai's go-to-market strategy
Started as a D2C delivery model, the startup currently serves customers through Swiggy, Zomato and its own website. It has 27 offline stores across India in cities like Delhi, Gurugram, Udaipur, Bengaluru, Mumbai, Hyderabad, and Chennai. These stores are located in malls, high streets and isolated places, most of them in Bengaluru and Udaipur.
While it currently serves customers through these four channels, the startup aims to expand to include fast commerce and modern retail in the near future.
Currently, the sales split between its channels is 80% from online platforms like Swiggy and Zomato and its own website, while the remaining 20% is from its offline stores.
Initially launched with six products, the QSR brand now offers 20-25 items along with 45 bubble teas. Its bestsellers include Taro Lava, Mocha, Jamun Kala Khatta and Chilli Alfonso Mango Iced Tea. In addition to selling bubble tea, the startup has also included K-pop burgers in its product list. The product range starts from Rs 99 and goes up to Rs 219.
According to Kohli, Boba Bhai sets itself apart from its competitors by emphasising the uniqueness of its product range and offering a wide range of bubble tees. Moreover, as Bubble Tea aims to integrate with people's daily routines, the brand positions itself as a lifestyle brand rather than an F & B.
To ensure differentiation, the start-up communicates personally with the customers, maintaining consistency from the packaging to the storage environment. In addition, it prioritizes sustainability, using biodegradable materials and putting forward environmentally friendly options such as paper straws.
What's in front of Bob?
The startup's expansion plans for FY2025 include targeting India's top cities and tripling its offline stores to reach 80-100 stores. Further, it aims to expand its footprint to 300 stores in three years and 500 stores in five years, with an annual recurring revenue target of Rs 100 crore.
Eventually, Boba Bhai plans to expand into international markets such as Saudi Arabia and Dubai, which have a significant Indian population.
In addition, the brand aims to diversify its product portfolio beyond bubble tea by introducing Bingsu Korean Ice Cream in its physical stores. Additionally, it plans to introduce more bubble tea flavours in the coming months to offer a wider range of choices to consumers.