What company does

The Chaguan website will offer customers the fullest up-to-date information about tea, grown in Taiwan. It will also introduce element of Chinese culture, history, literature and contemporary life in Taiwan in a brief, but educational manner. On of the strongest sides and outstanding differences from the Mainland China tea will be, ecological, natural quality of the tea. Plus one of the differences from the mainland China tea would be the connection of Taiwanese history to the Japanese.

The Website will have high quality design and be well structured, also important to make the website UX friendly. All the content on the website should look up-to-date, fashionable, minimalistic and informative. It will have blog and forum sections to make it more interactive and to attract visitors. The content should be highly educational, but not wordy, with photo illustrations. Also different teas should be grouped in categories according to fermentation, elevation and season.

Along with the website there should be sufficient presence in the social media, such as Facebook, Instagram and Russian Facebook version Vkontakte. The content should be constantly update on those platforms and they should be easily integrated with the main website. The content for Instagram, Facebook and Vkontakte should be pretty much the same.

The potential client base can be found on the thematic forums and Facebook and Vkontakte groups.

Main concept:

The idea is to create a view of the good Taiwanese (mostly high segment) tea as a fashionable and esthetical drink. Like wine or whisky. Teach Russians to tell good tea from bad. To make it

an easier and more entertaining process customers should be provided with a visible and user friendly classification method, based on fermentation, elevation and the crop season.

Chaguan web-site should introduce the difference between Chinese and Taiwanese tea. It should highlight the quality of Taiwanese tea, compared to Chinese tea from the mainland, introduce uniqueness of Taiwanese tea, especially because it’s healthier (natural, organic) and its better quality.

Many Asian products in the west are associated with a healthy, new-age lifestyle. One the most known things in the west is Chinese medicine and Chinese tea. The main marketing strategy should be - tea is good for health and Taiwanese tea is organic and natural, it can even do better improve your health, bring you mindfulness and serenity, which is very important in big cities.

Chaguan web-site should provide brief history of tea in an entertaining form, with visible classification. It also should have a blog section with constantly update educational information with photos and videos, because each tea has its story.

Russian people don’t know much about tea and tea culture. That’s why the website should introduce the difference between various types of tea. The tea will be graded according to the place it was grown (map with altitude and names of mountains) and degrees of fermentation (0-100%+ post-fermentation), season of the crop and its taste. Each kind of tea will have an educational video – how to brew it and how to drink, what taste and smell it should have.

Web-site will also introduce Taiwanese and Chinese culture, history, related to tea. It will be humorous and entertaining. In the blog section it going to have interviews with foreigners or Taiwanese, living in Taiwan.

Web-site should consist not only of text, because now a days people don’t like reading too much, but will also have videos. In the videos (not over 10 min each) tea masters will introduce types

of tea, how good tea should look and how it should be made. In other videos Taiwanese and foreigners will be talking about Taiwan, history, life in Taiwan.

Web-site will have good and logical design. It should be up to date and attractive to users.

Chaguan should have presence in social media, so people can get up-to-date information, be entertained and educated. Social networks give opportunity of interactive relationship with clients.

Customer segment:

Customers are mainly middle aged people and young people that can afford the high quality but reasonable priced tea. Customers should have access to internet via PC, mobile phones or Tablets and interest in foreign countries and cultures. They should love to travel abroad and to try new things. They should be interested in high quality food and drinks, DIY approach, good humour and spend quite a lot time online. People that prefer good looking products to cheep.

Like entertainment and care about health. They are very likely to use social networks like:

Facebook, Instagram or Vkontakte. Those people are technically educated and generally well educated middle class, mostly from big cities in Russia.

Value proposition:

Unique and new product that can’t be bought anywhere. Very important part of the value proposition would be educational information, transparency about tea production and chance to interact with people, other users who are also interested in tea. Chaguan website and social networks’ pages should create the feeling that the customer belongs to a club of people that like to drink good tea from good looking package and tea pots and cups. Customers will be offered a decent range of tea, from good quality tea to aged expensive tea, that can be only purchased through special order. Label special order should make the fact of purchasing more meaningful.

The list of teas is the following:

 Standard quality Wulong tea (that can be brewed around 5 times). For instance Wenshan Baozhong Wulong

 High-quality, high-altitude Wulong tea (that can be brewed up to 8-10 times). For instatnce Lishan Wulong, Guifei, Dongding Wulong.

 Unusual Wulong tea, with outstanding taste, that will be enjoyed by women. For instance, Oriental Beauty.

 Black tea, because in Russia people do enjoy drinking black tea. Sun-Moon Lake black tea.

 And old Wulong tea, that are being stored for over 10-15 years.

In the future project development customers can buy not only tea, but make DIY tea and buy tea equipment for the so-called tea ceremony. There also will be health products from the Chinese medicine, basic and popular ones, like Goji berries.

Unique and simple minimalistic design is another value that will be offered to the customers.

Chaguan tea packaging should stand out to attract customer’s attention, because tea drinking is an esthetical, meditative process, as seen in the west.

Accessibility and availability will be another value for Chaguan clients. High quality product in a fashionable package will be offered to them.

Channels to reach customers:

a) Awareness

Via Internet, through the main Changuan website. Collaboration with popular social media platforms and of course using social networks – Facebook, Instagram, Vkontakte (Russian Facebook) is crucial. Social media presence is a must in the modern entrepreneurial world.

To take an example of Instagram as an e-commerce sales booster. It has got a great potential to attract users to the website and the product.

It has got around 300 million active users monthly. 75% of Instagram users are outside the US.

Over 60% of users log in daily, making it the second most engaged network after Facebook. 30%

of internet users are now on Instagram. ²²

b) Evaluation

The following steps are the core strategy for Instagram product promotion and evaluation from customers:²³

 Develop a signature look. Esthetical part of the project with unique approach, of a

minimalist Asian style, to keep authentic feel of tea, but also not to overload page with useless information.

 Give product clear capturing descriptions. It seems that clear and to the point

description of the product us vitally important. One also need to attract the attention and interest of likely customers with the interesting, striking descriptions.

 Promote product visibility in search with hashtags. It is important to hashtag the product. Hashtags have a lot to do with how the product get discovered on Instagram.

 Make purchasing easy. It’s important to make easy and clear connection, links to the main website to facilitate the transaction.

 Partner with influencers. It is a good tool to expand brand awareness and increase sales

by partnering with Instagram influencers. Such cooperation let to reach an audience that is specifically targeted to the product.

22 https://www.instagram.com/press/

23Talbot, Kate (2015, December 1). Re: 5 Tips for Selling Products on Instagram. [Online blog entry]. Retrieved from: http://www.socialmediaexaminer.com/5-tips-for-selling-products-on-instagram/

It’s important to promote the brand and to build the brand awareness through these channels, that should be constantly updated. Maybe set up a page on Etsy.

For the customers’ feedback, there will be website blog, as well as social media presence. For emergency and problem solving there will be e-mail and phone number provided.

c) Purchase

It’s a very important part of the business, that should be operated really smooth, especially in Russia.

After the customer decided on what he/she wants to purchase the website gives four payment options:

1. Visa card

2. QIWI wallet (or other Russian popular e-wallets) 3. PayPal

4. Cash payment through a bank

Important part is payment in Russia:

According to researchers global payment leaders have failed to change the habits of Russian users, who prefer local services. As a result, Russian payment systems are more popular in the country than international ones. Therefore, to reach as large an audience as possible online stores in Russia try to accept all well-known e-wallets: 47% of stores accept Yandex.Money e-wallets, 44% WebMoney and 39% Qiwi. PayPal now covers 8% of online stores in Russia.

Figure 5.1 Use of payment services in Russia from https://money.yandex.ru/doc.xml?id=527114

Almost 83% of Russian consumers use offline payments kiosks at least once a year and 73% use e-wallets. This means that a comparable number of consumers are aware of kiosks and e-wallets.

The kiosks enable consumers to add money to an e-wallet account. Currently all major online payment services are working with kiosks, which means that every kiosk has the access to all popular e-wallets. For instance, Yandex.Money collaborates with the biggest Russian bank Sberbank, where users can top up their e-wallets directly from ATMs.

Figure 5.2 Use of non-cash payment services in Russia from

https://www.internetretailer.com/commentary/2015/06/30/introduction-online-payments-russia d) Delivery

The standard package of tea is 50-gram pack. It should be delivered by International EMS post directly to the customers in Russia from Taiwan, at least at the initial stage of the business. If the order exceeds certain price the delivery should be free. If the order is under a certain amount of money (the amount should be decided during the process), the customer should pay for the delivery. Customers should be able to track the goods that are being delivered on-line.

Express Mail Service (EMS) is an international express postal service offered by postal-administration members of the Universal Postal Union (UPU). These administrators created the EMS Cooperative in 1998 within the framework of the UPU to promote the harmonization and development of postal services worldwide.

e) After sales

Post-purchase customer support will include educational information in the form of text, photos and videos on how to brew tea, how to drink it and how to make tea drinking experience unique.

Chaguan website and social media pages will provide videos (not over 10 min each), photos and text posts where tea masters will introduce types of tea, how good tea should look and how it should be made. Also customers will have opportunity to get information about Taiwan from podcast like posts where Taiwanese and foreigners will be talking about Taiwan, its history, life and local culture.

For the customers’ feedback, there will be website blog, as well as social media presence. For emergency and problem solving there will be e-mail and phone number provide

Customer relationship:

The basics of the customer relationship should be emotional connection. The special connection will be established through story telling by text videos and photos. It is important to provide potential customers with the real, full information about the product and the production process (to establish the sentiment of trust). On Chaguan website there will be videos with Taiwanese farmers that speak from the first person to customers and explain the growing, collecting, processing and brewing process. The story will be narrated from the first person. The social media accounts should be connected to the real people, that are running the project. Those people with background in sinology and experience of living in Taiwan which proves the professionalism and established more trust between client and customer. This way the sense of trust and transparency will be present.

Another aspect of the customer relationship might be co-creation, of the content on-line, in the mass media space, where potential customers can leave comments and have discussions about Taiwanese tea and everything that is associated with the topic.

Revenue streams:

The starting revenue should come from the sale of the product. The margin for the product should be not lower than 100%

The price is being decided on based on two main principles: to have income and what are the market prices.

Maybe some additional revenue from social medias.

In the future: from wholesale business and tea ceremony service.

Key recourses:

Physical resources: tea leaves that will be bought from Taiwanese farmers. In the future:

packaging machines and warehouse.

Human resources: writers of the text and videos, graphic designer.

Intellectual resources: Web-site (Wix company that let users construct their own websites on-line), EMS post service.

Key activities:

Buying tea from farmers, packing it, resending to Russian cities. Maybe have a warehouse in Moscow and St. Petersburg in future. It will depend on how much time it will takes to get the package.

Producing intellectual, educational content on the Chaguan website, as well as on the social media platforms, such as Instagram, Facebook and Vkontakte. Active promoting offline and online.

In the future: selling tea related equipment, arranging tea ceremony service for companies in Russia (with the tea master, tea equipment and good quality tea). Tea ceremony will let people learn something new about different culture, improve corporate spirit and give the employees chance to get to know each other in a relaxing atmosphere of tea drinking.

Key partners:

 Taiwanese tea farmers will be the main key partners for this business. It’s cheaper to purchase tea from the farmers, then from resellers. Also there is a risk of a stolen database as in the case of RealChinaTea.

 Delivery services, when launching business can start with EMS service, because it’s cheep. Later might switch to another delivery model.

 Wix company that let users construct their own websites on-line. It’s a cheap and efficient way.

 Outsourced accountant’s services.

 Social networks, to create and boost brand awareness and provide customers with transparent and up-to-date sufficient information.

 Russian and international on-line payment systems:

1. Visa card

2. QIWI wallet (or other Russian popular e-wallets) 3. PayPal

4. Cash payment through a bank

Cost structure:

The cost will be Value driven.

Direct costs:

 The cost of tea leaves, bought form farmers (the price depends on the tea type and quality)

 The cost of package

 The cost of mailing the tea to the customer (EMS post)

Indirect costs:

 The cost of advertising online (in terms of time and skills)

 General supplies (the cost of going to the farmer and get the tealeaves)

 Accounting services (in the future we will outsource accounting part of the job)

 The cost of fee payment transaction paid to the E-wallet companies and

Visa/Mastercard/Bank. Transaction fees for accepting payments from banks and e-wallets – 1% from the transaction

 Fee to Wix for the website operation (the usage fee is $300 per year)

 Customer support cost

 Time cost for creating website

Expenses (mostly marketing):

 Advertising costs

 Promotion on the social media cost

 Entertainment costs

 Travel costs (to collect material for promotion) How we will calculate a 50 gr package of tea (example):

The cost of 50 gr of tea from a farmer – $10

The final price for customers is $27.5 per 50 gr.

The retail margin is 100%.

Cost structure will also include intelligible cost – time spent on building and designing the website, also the time to meet farmers and negotiate the price.