The Rise & Fall of Nirma Washing Powder

In 1969, a 24-year-old boy from Gujarat started selling his yellow detergent powder from house to house on a bicycle. Later, this very powder became India’s number-one detergent brand, Nirma. But what happened that led to a sudden decline in Nirma’s sales, ultimately causing its complete downfall?

This story began about 55 years ago when Gujarat’s Karsanbhai Patel, a chemist working in a government department, found that his salary was insufficient to support his family. So, he decided to start a small business for some extra income. With a BSc degree and a job as a chemist, he had a good understanding of chemicals.

He began experimenting with soda ash and other such chemicals in his home. After several failures, he finally created an affordable and effective detergent powder and named this invention Nirma, after his one-year-old daughter, Nirmupa. He packed the powder in simple plastic packets and started selling it from house to house on his bicycle the very next day.

At the time, most people in the middle and lower classes used laundry soap to wash clothes. This yellow-colored laundry soap was cheap, but it could not clean tough stains. On the other hand, the upper-class people used detergent powders that worked well even in India’s hard water and were effective in removing all kinds of stains.

The detergent powder market was dominated by Hindustan Lever Limited (HLL), with its Surf brand, priced at ₹15 per kg, which made it unaffordable for the middle and lower classes. Seeing this as an opportunity, Karsanbhai started selling Nirma for just ₹3. 5 per kg, meaning people could finally get a detergent powder at the price of laundry soap.

As a result, Nirma became very popular in no time, and Karsanbhai started selling 200 kg of detergent powder per day. As demand grew, Karsanbhai set up a small shed in Sarsapur near Ahmedabad and hired labor for production. He also improved the packaging and added the Nirma Girl mascot, which later became one of India’s most recognized brand mascots.

Karsanbhai’s next target was to improve distribution. At that time, there were over 2,000 retailers in Ahmedabad, and to grow, he needed to make Nirma available in these stores. However, as a new brand, many retailers were reluctant to stock Nirma.

To tackle this, Karsanbhai adopted an extraordinary tactic. Karsanbhai employed women to go to each retailer and ask to buy Nirma. This made the retailers think that there was a high demand for Nirma washing powder.

And they were losing out on profits because they could not fulfill the demand. That’s why they started contacting Karsanbhai themselves and began to stock Nirma in their stores. In no time, Nirma became the number-one detergent powder in Ahmedabad and surrounding villages.

And it was time to expand across Gujarat. Karsanbhai knew that if he wanted to beat brands like Surf across Gujarat and India, he had only one major advantage —Nirma’s low price—and he was determined not to raise it. Hence, during the expansion, he kept Nirma’s formula as simple as possible.

Nirma contained 65% soda ash, which was locally available at a low cost in Gujarat. Nirma had only half the active detergent content compared to Surf, and lacked whitening agents or perfumes. Additionally, instead of investing in large factories, Karsanbhai set up small sheds in different villages.

While Surf used expensive machines and electricity for manufacturing, Nirma's production was entirely done manually by labor, which was much more cost-effective. Furthermore, thanks to a government scheme for working without electricity, Nirma received a 15% excise duty rebate. Finally, Surf required four stages to reach the customer, Nirma could reach the customer in just three stages.

This direct system not only reduced costs but also increased speed. Due to these factors, Nirma kept its prices under control, and by 1975, it had expanded throughout Gujarat. The success of Nirma was driven by perfect pricing, market understanding, and distribution innovation.

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After Gujarat, Karsanbhai now wanted to expand all over India. He wanted to do it quickly. That’s why he decided to launch Nirma’s first ad campaign.

In 1975, All India Radio played Nirma’s jingle for the first time, which went “sabki pasand Nirma” (Everyone prefers Nirma). Nirma knew that Indians loved detergent that produced more foam. That’s why in the ad, this line – “Thoda sa powder aur jhaag dher saara” (Get more foam with a pinch of powder) –was added to the ad.

Moreover, the promise of “Kam keemat me adhik safedi” (Low price, more brightness) also played a significant role in attracting customers. The catchy jingle and memorable tune of the Nirma commercial quickly captured the consumer's attention. In 1982, using the same jingle, Nirma launched its first TV ad with the iconic dancing Nirma Girl mascot.

This was a huge success, much like the earlier radio ads. “Washing Powder Nirma, Washing Powder Nirma. ” X2 By 1977, Nirma had captured 12% of the market share, and by 1985, it had captured nearly 60% —making it India’s largest detergent brand.

What began as a side income for Karsanbhai with Nirma made him the "detergent king" of India. However, unfortunately, this success was short-lived as the old market player was about to retaliate. Initially, Nirma had captured only the middle and lower-income segments, but even upper-class customers began shifting to Nirma, unsure of why Surf was better in terms of quality.

In 1986, Nirma launched a detergent bar that directly challenged HLL’s Rin bar, causing several Rin customers to switch to Nirma as well. HLL soon realized that Nirma had become a significant threat to their business. In response, they launched a secret internal mission with the codename STING (Strategy To Inhibit Nirma’s Growth).

Under this mission, Nirma’s business strategy was studied in detail. Following this, HLL created a counter strategy. After weeks of research, HLL came to the conclusion that in order to compete with Nirma, they too had to sell a detergent powder at a low cost.

However, if they priced Surf at Nirma’s price, they would incur losses, and their long-established premium brand image would be destroyed. So, HLL decided to launch their own low-cost detergent powder. Before doing so, they conducted market research that exposed Nirma's weaknesses.

For instance, Nirma left an industrial smell on clothes after washing. Also, Nirma did not dissolve completely in water, which roughened the dry fabric. In addition, many Nirma caused irritation and blisters in some people.

Taking these weaknesses into account, HLL first added pleasant fragrances to their detergent. Secondly, they made it gentle on the hands and ensured that it dissolved completely in water. These improvements were made with the cost in mind.

Since salt was an important raw material for their new detergent, HLL set up their factory near salt mines in Gujarat, connecting it with a direct pipeline from the mines. They also made massive investments in R&D to find cheaper alternatives for fragrances and other enhancers in their detergent. With all these improvements, HLL launched a detergent powder that was priced the same as Nirma but had better quality.

And that’s how Wheel Detergent Powder was launched. In its ads, HLL directly targeted Nirma by saying, "I asked for cleansing, and you gave me irritation! " "I asked for cleansing, and you gave me irritation!

" This message resonated with Nirma’s customers, and they began shifting to Wheel. As a result, by 1990, Wheel became India’s second-largest detergent brand after Nirma HLL also launched ad campaigns for Surf, targeting Nirma. In the ads, they showed a smart housewife named Lalitaji, who said, “There’s a difference in affordability and quality of a product.

” In the ad, the yellow-coloured power representing Nirma was compared with Surf's blue-coloured powder and it was claimed that “Half a kg of Surf is equal to 1 kg of cheap powder. ” HLL’s strategies were effective, raising its market share from 11% to 24%. Nirma’s market share fell from 60% to 50%.

But this was just the beginning of Nirma's downfall. Around this time, another competitor was emerging from the streets of Uttar Pradesh that was going to destroy Nirma—Ghadi Detergent Powder. In 1980, witnessing the boom of the detergent market, two brothers from Kanpur, Murlidhar and Vimal Kumar, launched their own detergent powder.

They noticed that Nirma and Wheel dominated the cheap detergent category, but with India’s increasing per capita income, millions of people were moving up from the lower to the middle class. These middle-class consumers no longer just wanted cheap detergent. They wanted high-value products at affordable prices.

Thus, they launched Ghadi Detergent Powder, which not only had better quality than Nirma, but its price was 10% higher than Nirma’s. Because of this, customers automatically began perceiving Ghadi as a higher-quality detergent. Additionally, the extra 10% price allowed Ghadi to offer its dealers and retailers a higher commission than its competitors, which led to retailers recommending Ghadi detergent to customers as their first choice.

Consequently, sales began to grow organically. To minimize distribution costs, Ghadi adopted a 200-kilometer manufacturing model. That’s why within a 200-kilometer radius of every major market, they began to set up small manufacturing plants or depots.

This ensured that Ghadi’s stock was always available in stores, and it also reduced shipping costs. Finally, Ghadi used a memorable jingle in its ad campaigns that attracted customers like a magnet. The jingle was: “Pehle istemaal kare phir vishwas karein” (Use it, trust it).

These strategies eventually made Ghadi the number-one detergent brand in India. On the other hand, by 1990, Nirma was continuously losing market share and needed major changes to survive. First, they needed to reduce the amount of soda ash in their product, as it caused irritation to hands and long-term damage to clothes.

Improving fragrance and increasing the quantity of active detergent was also crucial. During this time, Nirma hired a market research agency called Samsika Marketing Consultants to conduct a survey. The survey revealed that most customers felt embarrassed to use Nirma, indicating that the brand had developed an image as an inferior product and needed a serious makeover.

Nirma needed to improve its outdated packaging to eliminate the perception of inferiority. They also needed to launch new advertising campaigns to counter the ads from Wheel and Surf, repositioning their product from just a cheap option to a value-for-money detergent. However, Nirma failed to take these steps.

Instead of focusing on their core product, they entered the premium detergent market to compete with Surf, which worsened the situation. In the mid-1990s, Nirma launched its premium detergent, Nirma Blue. By then, however, the premium detergent market was not only dominated by Surf but also Ariel.

Compared to these brands, Nirma Blue offered nothing innovative or better. Despite the quality of the product, the perception of Nirma Blue was poor. While HLL had deliberately given its premium and affordable detergent brands entirely different names, Nirma included its existing brand name in its premium product.

As a result, customers perceived it as just another inferior product, and Nirma Blue failed within a few years. Similarly, Nirma launched other products like Nirma bathing soap, Nirma hair oil, Nirma shampoo, and Nirma toothpaste. They assumed these products would benefit from Nirma’s popular branding.

However, the opposite happened. First, customers who liked Nirma only associated the brand with detergent products, so they did not find Nirma’s soap, oil, or shampoo appealing. Secondly, due to the perception of Nirma as an inferior brand, none of these products gained traction.

By 2017, Nirma’s market share had plummeted to just 4%. To revive the brand, they launched Nirma Advance, featuring Hrithik Roshan in its advertisements. The campaign message was, “For the stubborn stains of the new age, trust Nirma Advance.

” However, consumers did not connect with Hrithik Roshan in a detergent ad, nor did they understand what Nirma meant by "stubborn stains of the new age. " Fortunately, Nirma diversified into sectors like soda ash manufacturing, cement, and education in time. These ventures continue to generate significant revenue for the company.

However, the detergent business, which was the foundation of their success, has now declined considerably. Nirma’s story proves that becoming number one in any field and staying number one are two entirely different things. No matter how big you become, if you’re not changing, you’re losing.

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