How Ghari challenged the Detergent Giants and emerged as a Market Leader - Next Big Brand
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How Ghari challenged the Detergent Giants and emerged as a Market Leader

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Sourav
Written by Sourav
[email protected] | | Published on: March-21-2019 04:53 AM

The detergent market in India is divided into three segments – premium, mid-range, and popular. The premium segment comprises Ariel and Surf; the mid-range segment comprises Tide, and Rin; and the popular segment comprises Wheel, Nirma and Ghari. The market share of the detergents in the premium segment is 15%, and that of the mid-range and popular are 40% and 45% respectively.

Today, we are going to have a look at the Popular segment and witness the emergence of a brand which track-backs its origin to 1985

Surf, Nirma, Wheel, and Rin fought for the Indian Market Share 

Before 1985, Hindustan Unilever’s (HUL) Surf held the number one position in the detergent market in India. However, when Nirma Chemicals launched a detergent brand called Nirma, aimed at the middle and lower middle-class customers, Surf lost the number one position.

detergent brands

image source: google images

Soon, HUL realized that there was a big portion of the market which was untouched by others and it launched two low-priced detergents called Wheel and Rin targeting the lower middle-class group.

Witness the silent entry of Ghari

When Hindustan Unilever, and Nirma Chemicals began increasing their market share, Rohit Surfactants Private Limited (RSPL) from Kanpur, silently launched a detergent brand called Ghari primarily for rural customers, and middle and lower-middle-class customers. Ghari followed Nirma’s strategy of keeping low price and targeting customers at the bottom of the market.

In 2011, Ghari toppled Wheel to be India’s largest home and personal care brand. RSPL, which was launched by brothers Muralidhar and Bimal Kumar Gyanchandani, is now an Rs.5,000-crore company with Ghari alone contributing around 75% of the total revenue. The company, widely celebrated by many (like us) as an example of the small-town entrepreneurial success story, also sells other products including Venus soap, Xpert dishwasher, and Namaste Dairy brand.

Today, Ghari is the market leader in the detergent industry, with a market share of 17.3% and Wheel is tagging behind closely at 16.9%. Within the economy segment, both Ghari and Wheel are priced similar.

Tide is at present at the third position with a market share of 13.5% and Nirma has less than 6% market share.

ghadi detergent

image source: google images

Reasons behind Ghari’s Growth and Success Run

Aggressive Pricing: First and Foremost, Ghari has always maintained affordable pricing, which is why it has managed to become a household and popular name in India.  Ghari detergent is the most preferred among the masses and secures a high market share. It is because It launched itself in the popular segment at a time when India was not a very premium market. It focused on its strength and created a strong brand out of itself.

Regional Focus. and then SCALE: When launched, Ghari did not have the financial power to beat giants like HUL and P&G. Focusing on Uttar Pradesh, it’s home state, was a big advantage for Ghari. The reason is attributed to the fact that Uttar Pradesh has a population of 204 million, the highest among Indian states. It accounts for over 12% of the country’s FMCG sales.

In addition, the adjoining markets of Bihar, Madhya Pradesh, and Punjab along with UP account for one-third of the total consumer products market. The strategic focus for Ghari was to capture adjoining markets after capturing the massive market in Uttar Pradesh. Ghari was successful in capturing the adjoining markets over a period of time and emerged as a leader.

Growth in market demand for washing machines has recently expanded at an impressive rate in India. The growing penetration of washing machines is directly increasing the demand for machine-wash laundry detergents. Moreover, the purchasing power of Indians has increased, which is encouraging many players in the detergent market to expand its network and upturn product penetration, especially in the rural market.

Lucrative Margins to the Suppliers: Compared to competitors who provided a 5% profit margin, Ghari detergent provided a profit margin of 6-7% to its wholesale and stock-keepers. This enabled Ghari to have a loyal and stronger dealer base to push sales while keeping its prices low.

About the author

Sourav

Sourav

Excellent story-teller, with a background in SEO and Digital Marketing.
Likes to write and give form to opinion and incidents.

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