Selling Tea in India the Electronic Way

Indian auction centers have been peddling tea the old fashioned way since 1861, selling it in crowded halls filled with traders and auctioneers. A good auctioneer can usually sell up to three lots in one minute, making tea trading a quick, but time-consuming process. But low tea prices, high government sanctions, and evolving times have led to online trading becoming an acceptable medium in India.

The high-tech shift is much more economy-driven than it is fashionable. Electronic trading promises fairer prices and lower transaction costs for farmers. (Source: nytimes.com)

The advantage of going digital for Indian farmers is, of course, expanding their consumer base so that buyers can place a bid from anywhere in the world. Another advantage: more consumers means that more bids are coming in, creating a competitive atmosphere in which the fairest and best price representing the true value of the tea is being offered.

In the old days, physically getting crates of tea to an auction hall was a tremendous hassle. Farmers had to harvest the leaves and process them into black tea before bringing the final product to market. Sometimes, the farmers would sell the tea leaves as is, processed by the highest bidder. A broker took the tea, placed it in a warehouse and assessed its quality. (Source: yahoo.com)

Potential buyers then had the opportunity to sample the tea and a catalogue was produced outlining the specific features for each type of tea that was to be sold. The entire process took weeks to complete and many involved were left to hope for a better way.

Moving the process to an electronic forum means that tea catalogues are now produced in record fashion and the paperwork involved in setting prices, brokering time and documenting sales has become a non-factor. (Source: nytimes.com)

The electronic process will expand the current consumer base and introduce a new generation of online travelers to an age-old business. Selling tea on a national basis is impressive enough when you live in a country with a population in excess of one billion people. If you sell that same product to an international audience, farmers will be guaranteed to receive a much better price for their products than anyone sitting in a dingy auction hall could ever offer.