The Easy Way to Start a Successful Export Business in India Today

Summary

In this insightful video, Jai and Akash, founders of Kabj, share their entrepreneurial journey in exporting Indian tea to global markets. They discuss the strategies behind identifying competitive advantages, participating in international exhibitions, and building partnerships with local agents to expand their reach. Key highlights include overcoming challenges with payment terms, managing logistics, and innovating packaging to cater to global preferences. The founders emphasize the importance of staying customer-centric and adapting products based on feedback, offering valuable lessons for aspiring exporters looking to scale their businesses internationally.

Takeaways

• 😀 The U.S. offers fantastic exposure to global markets, giving businesses in India a competitive advantage in various industries.
• 😀 Indian black tea is well-known in Russia, with more awareness there than within India itself, highlighting an opportunity for international exposure.
• 😀 A significant portion (45%) of India's exports comes from medium and small-sized businesses, emphasizing the potential for smaller companies to grow through exports.
• 😀 The founders of Kabz Tea, Jay and Akash, managed to generate 50% of their revenue through exports, showcasing how young brands can thrive internationally.
• 😀 To successfully export, a company must first understand its unique advantages, whether it’s pricing, quality, or innovation, compared to other countries.
• 😀 India is the third-largest exporter of tea in the world, behind Sri Lanka and Kenya, making tea a viable product for export growth.
• 😀 Participating in global trade fairs like Gulfood can significantly boost visibility and lead to new business opportunities, as shown by Kabz Tea’s success at the event.
• 😀 Building partnerships with local distributors or agents in foreign markets can be a key strategy for young brands with limited resources.
• 😀 Payment terms are critical in international business; Kabz Tea uses a 30% advance payment system, with the remaining 70% upon shipment to avoid cash flow problems.
• 😀 Customer feedback and continuous experimentation with products, like standardizing green tea for consistent taste, are vital for successfully entering the market.
• 😀 Exporters must ensure their products are insured during shipment and carefully manage logistics and documentation to avoid financial risks.

Q & A

What inspired Jai and Akash to bring flavored black tea to India?

Jai was inspired by his experience in the U.S., where he noticed that countries like Russia had an advanced tea market with a variety of flavored teas. He realized that India was not fully exploring this potential and saw an opportunity to introduce diverse flavors to the Indian market.

How important is exports to their business model?

Exports play a crucial role in Jai and Akash's business model, contributing significantly to their revenue. A large portion of their business comes from exports, with about 50% of their revenue generated through international markets.

What challenges did they face in the export process, and how did they overcome them?

One of the main challenges they faced was managing payment terms, as international business often involves uncertain financial agreements. They overcame this by using clear payment structures—30% advance and 70% upon shipment—and by leveraging platforms and agents that helped navigate these complexities.

Why is India positioned well for tea exports?

India is one of the largest producers and exporters of tea, ranking third globally after Sri Lanka and Kenya. India's tea has a competitive edge due to its quality and price, making it an attractive option for international markets.

What strategies did they use to get their brand noticed internationally?

Jai and Akash participated in global exhibitions like Gulfood, where they showcased their product. They also worked with agents and partners in various countries who helped them promote and sell their brand. These strategies helped them gain visibility and expand into markets like the UAE and Australia.

How did customer feedback influence the development of their product?

Customer feedback was central to refining their product. For example, when they first offered tea samples, customers liked the flavors but struggled with brewing it correctly. This feedback led them to standardize the tea blends and adjust the product to ensure consistent quality and ease of use.

What role does packaging play in their business?

Packaging is a significant part of their product's appeal. They created a convenient, ready-to-drink packaging using pyramid tea bags. This innovation was designed to cater to consumers' preferences and simplify the tea-drinking experience, particularly for international markets.

What advice do they give to new businesses wanting to export their products?

They recommend understanding the unique strengths of your product—whether it's quality, price, or something else—and identifying markets where these strengths give you a competitive edge. Exhibitions, using agents, and leveraging e-commerce platforms like Amazon are great ways to reach international customers.

How did they manage the logistical aspects of their export business?

Jai and Akash used a clear and simple payment structure for exports, with 30% paid in advance and 70% upon shipment. They also insured their shipments to mitigate risks. They worked with agents who had prior experience in international trade, helping them navigate logistics and legal challenges.

What key lesson did Jai and Akash learn about product development?

A key lesson they learned was the importance of experimenting closely with customers. By gathering feedback and making adjustments based on real-world use, they were able to improve their product, ensuring it met consumer needs and expectations more effectively.