Sabki Pasand Nirma: The Nirma Story Part 1

Few brands claim to have fully home-grown technology and even fewer brand stories are told with as much relish as that of Nirma - a home-grown product that revolutionized the detergent market in India, and successfully challenged large multinational leaders in the process. At one point of time, it commanded a 49% share of Indian detergent market and its story is the stuff of legends. So, what changed the scenario so much that it is now limited to a meager 10% share in the detergent market? What situations drove it to make a decision of delisting from both BSE and NSE? We shall explore its journey and analyse the effects of its decisions in this article.


A brief history:

In the summer of 1969, Dr. Karsanbhai Patel, a Gujarati entrepreneur, manufactured a phosphate free synthetic detergent powder. He then setup his first detergent-making unit in the backyard of his home in Ahmedabad measuring all of 100 square feet. With bare hands and a bucket, he would prepare the dry mix detergent powder that he had invented, pack them in polythene bags and then set off on his bicycle to sell the packets door to door. Every packet of Nirma that Karsanbhai Patel sold to his consumers came with a money-back guarantee.

In those days, HLL commanded the majority share of the Indian detergent market, a 36%. Along came Patel, selling a much cheaper brand- it cost Rs.3 per kg compared to Rs.13 per kg of HLL's surf. Patel cracked the low-cost code more than two decades before the rest of India began to even think about it. Soon, Nirma had established itself as a brand to be reckoned with and has built a huge base of loyal, middle-class customers. As sales grew, so did Nirma's scale of operations and along with that the brand's competitive edge. The cost-conscious approach of the initial years was to evolve into a strategic perspective. Dr. Karsanbhai Patel put enormous stress on operating efficiencies and marketing practices to ensure that consumers got their money's worth. By the 1980s, Nirma was the toast of marketing gurus.

By the end of 1987, it had a 49% share in the detergents market. Meanwhile, HLL's share had fallen to 8% in 1989. The launch of Nirma detergent cake came sixteen years after the introduction of the detergent powder. Its success was almost a foregone conclusion. In 1990, Nirma Super Detergent, a spray-dried blue detergent powder, was launched. With the launch of the high-TFM content Nirma Beauty Soap, Nirma began to expand its product portfolio.

A 15,000-strong workforce at different locations ensures that there is no compromise on quality and that production deadlines are met. Also, Nirma spent a lot on advertising, especially on TV, which ensured its trademark jingle was recognized across the length and breadth of the country. Nirma, launched another brand: Nima. Both the brands from the Nirma stable have been successful in grabbing a huge chunk of all incremental sales growth in the soap category in the past twelve years.

While the brands were making marketing history of sorts, the company was strengthening its operations. The detergents portfolio was strengthened by setting up backward integration projects. 90% of all raw materials - including linear alkyl benzene (LAB), soda ash, salt and packaging material - are manufactured in-house. In 1994, Nirma Limited was listed on the stock exchanges. Nirma is the flagship company of the group with complete rights and ownership of the brand. Its wholly owned subsidiary, Nirma Consumer Care Limited, is the distribution arm.

It seemed that The Nirma story is the success story of how an Indian Entrepreneur took on the big MNCs and rewrote the rules of business. Everything was perfect and awe-inspiring. So, what went wrong? Why the dancing girl of Nirma ended up with a sad face? Catch us on the remaining part of the story on

Victim of its own success: The Nirma Story Part 2

in the next post. :)

Celebrating everything,

Aravind M
http://www.aravind90.blogspot.com