Kaya Kalp or Harsha’s Well-Oiled Intelligence
Lead:
Brand Stories is a column that introduces globally successful brands and their creators. For several months we have read about foreign brands that made it to Indian markets after their success abroad. This month, however, we are going to know about an Indian brand that conquered the markets in nearly 25 countries, exhibiting a sleek smartness and well-oiled intelligence. Let us know more about the brand Parachute and its creator Harsh Mariwala.
Matter:
Masjid Bunder is not an ideal place to be when you want to see or show dreams. You had to be from the high-brow locality of Bandra to enjoy the luxuries of having dreams. And if you were to start a new company hoping for good prospects, you had to have an office that would create a sense of trust in the candidates walking in for interviews. It should raise their expectations about the company. You need some space, like a sports club. That was what was going on in the mind of Harsh Mariwala when he started Marico and went on to establish his brand in not just one or two but 25 countries within the first one and a half-decade of its inception.
To some of the uninitiated readers, the question “who is Harsh Mariwala” may arise; however, if you have heard ‘Parachute’ or ‘Saffola’, you have found your answer. But then you may ask what made him abandon his successful family business – Bombay Oil Industries, and enter the consumer oil products industry? What was the passion that led him to establish a billion-dollar empire within a few years on his own?
Harsh was born in Mumbai. His grandfather Vallabhdas Vasanji, however, had migrated nearly 150 years ago from Kutch to Mumbai and since then he became a true Mumbaikar. His son and Harsh’s father Charandas had started Bombay Oil Industries in 1948. His three brothers accompanied him. Their business included spices, essential chemical commodities along with oil. Black peppercorn was their speciality. Black pepper is known as Mari in Gujarati; hence they were called the Mariwallas.
Harsh studied in Sydenham College in South Mumbai. He joined the family business in 1971. Parachute coconut oil and Saffola Refined oil were already known brands of Bombay Oil Industries. Their market share was considerable. But these oils were sold in 15 litre cans. Nobody could think of selling them in small units of 1 liter or in a few grams. Charandas and his brothers, as convention would have it, were only focusing on reaching wholesalers. They did not realize that Parachute and Saffola had a brand value, and they could be sold in retail with millions of consumers.
Harsh belonged to the new generation who had also studied business management. He was giving a lot of thought to the idea of taking his product to the everyday consumer. Harsh knew that there were two companies from Kolkata and Nagpur which purchased goods from Bombay oil and sold them to consumers with smaller packets. Their profits were higher than the manufacturers. Harsh visited these companies to understand their business model. Harsh could see that consumers in both the markets in Nagpur and Kolkata were delighted with Bombay Oil. Moreover, Parachute oil was far better than other oils in terms of purity and transparency.
Harsh saw that retailers were making enormous profits by selling their oil. He then resolved to do it himself. Parachute is a coconut oil product. Harsh Mariwala was confident that coconut will always be in demand in a country like India. He knew that their oil needed a brand. Retailing companies sold Parachute and Saffola in metal tins. But these tins caused a lot of wastage during the use of the oil because of poor design.
Hence Harsh had started thinking about the possibility of selling oil in smaller plastic bottles instead of tins. He had already formed a research team for this. Their report, however, was not exciting. Their findings showed that earlier, a company tried this idea with square-shaped plastic bottles. Coconut oil packed in such bottles was the favourite dish of the rodents. Hence if they were to continue this idea, it would be more profitable to the mice than Harsh who was already facing losses.
Harsh’s team decided to undertake an experiment. They changed the shape of the bottle from square to round. Harsh hired R. V. Bindumadhavan, an expert officer from Ranbaxy for this experiment. The container was now cylindrical with a thicker plastic cover. Now no mouse could chew on them. It prevented damages, gladdened the retailers, but the customer was yet to be convinced. Bindumadhavan created yet another experiment which involved putting 8-10 mice in a cage with the plastic bottles. The mice could smell coconut oil in the bottles, but they could not hold them in their mouths. Bindumadhavan and their team conducted this experiment for two days. They also recorded it on camera. It was clear that the mice were unsuccessful even after two days. Harsh’s marketing team took this recording to all the distributors in the country. Anybody who saw this recording chose to prefer these bottles over any other rival brand. Every one of them kept 5-6 sample bottles with them and observed for the next 15 days that genuinely they were invincible against the mice. From then on, they started selling Marico bottles. Within the next two years, Marico conquered the Indian market.
This success came a long way after 16-17 years. But the shift from tin boxes to plastic bottles had reduced cost. Harsh then decided to put this saved money in the advertising of Parachute. As a result, Parachute became not only the biggest brand in India but also in all the countries in the world that understood the importance of hair oiling. Harsh, although being the grandson of Vasanji, was never going to settle with this success. For him, complacency was alien to his nature.
He took a risky step in 1988 when he founded Marico foods limited. Today, this company has entered the personal care products industry with edible oils, fabric care products, processed food etc. These products are sold under the company’s various brand names such as Parachute, Saffola, Sweekar, Hare & Care, Revive and Seal. In 1989, the company bought the Rasoi brand and its factory at Jalgaon. With increasing demand, the company started a new plant having a production capacity of 24 thousand tons at Kozhikode, Kerala in 1993. In 1994, Harsh signed a deal with his paternal company to own the trademarks of Parachute and Saffola. In 1996, Marico entered the stock market. They introduced 10 lakh shares of 10 Rs each. This was followed by Parachute herbal.
Meanwhile, Marico stepped into the international market in 1990. They started their first factory outside India in Bangladesh. The company bought Nihar from the multinational company Hindustan Unilever and also acquired brands such as Reckitt’s Set Wet, Livon, Zatak etc. Harsh had also founded a subsidiary company called Kaya ltd after realizing the possibilities in the hair products industry. Incidentally, Marico stepped into a new field, namely Skincare. Today, Marico produces more than 50 products that look after various skin problems.
The company’s progress in the 21st century reveals incredible speed, expansion of work and territory. It entered the Information Technology sector. It is considered to be trailblazers in the human resource and development sector. Harsh decided to resign from his CEO post while Marico was still at the top. He knew that the company needed a leader with professional expertise. Hence he remained as president. He took it upon himself to guide the board of directors and company management.
Before that, in 2003, Harsh had founded the Marico Innovation Foundation. It was important for new businesses with the potential to stand out, to get financial and moral support. Marico helped such companies. Harsh had understood the importance of corporate social responsibility in 2003. To honour such businesses with spectacular success in both these fields, Harsh had planned awards under the Marico Innovation Foundation. Today these awards are considered to be the most prestigious globally.
Archana is Harsh’s wife. They have two children, namely Rajvi and Rishabh. Both started their professional career with Marico. Gradually they discovered newer vistas of business with their genius. This was history repeated, just like how Harsh had left Bombay oil industry to start his own company. Harsh took their decision with a sportsmanlike spirit. A spirit probably ingrained in his blood. Even after crossing his sixties, he hits the gym every day to stay fit. On holidays, he plays golf, squash. He swims and goes trekking.
His office is located in Kalina. Saugat Gupta is the new CEO. Today Marico’s annual turnover has crossed Rs. 8000 crores. With regular ups and downs in the share market, the company has launched up to 20 lakh stocks in the share market priced at Rs. 370 and above. The company has earned its customers’ trust, and that is why their products are in high demand. These are the signs of a bright future.
Block:
For a product to be a successful brand, it doesn’t have to be big. Hair oil can be a top brand. Marico has proven this with their Parachute brand. Besides, they have launched more than 50 skincare products, edible oils and processed foods. They have also stepped into the information technology sector and are continuing their successful journey.
Originally Published in Yashashwi Udyojak. Subscribe Today.
