Episode 137: Brewing Authenticity in E-Commerce with Shunan Teng of Tea Drunk
In an era where digitization is not just an option but a necessity, Tea Drunk’s transition from a cozy teahouse to a thriving e-commerce business provides a perfect case study for navigating turbulent business waters.
In a candid discussion with Nick Fredrick on the “Subscription: Scaled” podcast, Shunan Teng, CEO and Founder of Tea Drunk, shares her transitional journey. Standout details include her prowess in bringing traditional tea to the Western market and her ability to tackle difficult circumstances by seamlessly pivoting.
“When I first founded the company, I wanted it to be an introduction of traditional Chinese tea to a Western audience,” says Shunan.
However, an unforeseen challenge emerged—the global Covid-19 pandemic.
Learning the Ropes of the E-Commerce World
Shunan recalls that when it was time to focus on e-commerce, it was no longer a question but a necessity. Strategy took a backseat and survival took the wheel. The change wasn’t straightforward. Team members, who specialized in providing rich, in-person experiences, needed to master an entirely new set of skills overnight. Tea Drunk navigated these uncharted waters with genuine optimism.
The logistics of transitioning from a physical store to an online platform presented hurdles. Tea Drunk found itself reevaluating its sales strategy and dealing with issues such as packaging, product shipment and FDA compliance. Shunan shares how the company dealt with some of these issues. For example, rethinking packaging to be both functional and authentic. Many rapid-response solutions were far from temporary and required a thorough reevaluation of their operational strategy.
Refining Customer Experience in a Virtual Space
While many of their teahouse customers remained loyal and started purchasing online, e-commerce still presented a challenge. How could they convey the same quality and in-house experience on a virtual platform? For Shunan, shifting the business to an e-commerce model wasn’t merely about having an online presence. They needed to ensure that the product and its presentation still resonated with customers without them necessarily having that firsthand physical experience with the product.
Her story illustrates resilience, adaptability and an unyielding spirit to evolve amidst adversity. The pandemic may have closed the doors to their physical teahouse, but it opened a wealth of new opportunities in e-commerce. It revealed new customer segments and business opportunities, including corporate gifting, tastings, large-format tea classes and collaborations with restaurants for tea-paired menus. This was a shift in business strategy and an evolution in the traditional Chinese tea market.
From Dark to Light: Website Redesign
When in-person experiences became reminiscent of pre-pandemic times, Shunan’s teahouse did not merely digitize its offerings. It also reinvented its online aesthetic. The website went from a somber, dark color palette — reflecting a secluded serenity — to a more lively and inviting white-and-beige color scheme.
“We wanted to be as personable, as friendly, as possible,” reveals Shunan. The aim was to reflect the warm, inclusive feeling that was the signature of their in-person services.
She admits that they are lucky to have a loyal following in terms of customer acquisition. The teahouse’s faithful clientele proved to be a source of steady and exponential growth. Word-of-mouth referrals were aided by the availability of an easily shareable website URL. This trusted community not only made the transition to digital smoother but also acted as a stable foundation when exploring other channels for customer acquisition.
A Rich Blend: Bridging Offline and Online Experiences
Shunan’s teahouse encountered a serendipitous upswing on Instagram, amassing around 35,000 followers without a conscious effort to do so. This unforeseen social media growth, added to collaborations and partnership activities — both online and offline — acted as a catalyst, driving more traffic to their website. They leveraged these online channels to convert visitors into customers through various strategies, including discounts for first-time online customers.
A Balancing Act: Retaining Subscriptions While Avoiding Product Saturation
Despite achieving an uptick upon its initial rollout, the subscription model encountered some hurdles in the latter half of 2022. Shunan notes that they started seeing a decline in e-commerce with the return to in-person experiences and a surplus of online products. The teahouse introduced an option to skip subscriptions to counteract cancellations due to product overflow. This step managed attrition rates effectively but presented a snag where consistent revenue streams were concerned. The strategy now involves a blend of in-person experiences to complement and sustain the online tea club.
The strategy for ensuring the longevity of the tea club membership goes way beyond simply delivering tea. Discounts, product collaborations and exclusive event access form part of Shunan’s value-added strategy. Her offerings, whether in experiences or tangible products, reveal her deep understanding of customer retention.
Embracing Digital While Preserving Tradition
With a previous recurring customer rate of 70%, the challenge became replicating this loyal customer base digitally. It’s worth noting how Tea Drunk managed to carve its digital niche while maintaining a strong connection with its original audience. This demonstrates a fascinating blend of traditional customer relationship management and leveraging online platforms like Facebook groups and emails to stay engaged.
Shunan remarks that an unintended but welcome consequence of moving into the digital space is that it allows for a geographically diverse customer base. With an impressive 20% of its customers originating from outside Canada and the US, Tea Drunk has extended its reach to international markets, including the Middle East and Northern Europe. The company’s strategic digital move sustained the business during the pandemic and broadened its customer demographics, providing a win on all fronts.
Bridging Tradition and Tech
Tea Drunk’s journey from an authentic, in-person teahouse to a digital online platform is not merely a story of survival during a pandemic. It’s a testament to how businesses, even those deeply rooted in tradition, can leverage digital platforms to sustain, grow and diversify in an increasingly digital world. Shunan’s experiences demonstrate how it is possible to maintain customer engagement, preserve brand identity and transition into an online market without compromising quality or integrity. Her experiences provide valuable insights for tech leaders navigating the digital market.
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