How a Gujarati businessman went from making detergent in his backyard to building a Rs 2500 crore empire

Any 90s kid who’s spent their childhood glued to the TV screen can’t ever forget the lyrics of Nirma commercial and the little girl on its packet twirling in a white dress. But did you know that Karsanbhai Patel, the founder and owner of Nirma went from selling the detergent on his bicycle to turning the company into a formidable group worth Rs 2500 crore?

Today, Karsanbhai is among the richest billionaires in India. With a net worth of Rs 27,804 crores ($3.9 billion), the 75-year-old holds the 30th spot on Forbes 2019 list of Rich Indians. Moreover, he is also ranked 394th among the richest billionaires in the world. How did it all start? We’re here to tell you.

How did Karsanbhai Patel invent Nirma detergent?

In 1945, Karsanbhai was born to a farmer’s family in Ruppur, Gujarat. By the age of 21, he had completed a bachelor’s degree in chemistry. In the beginning he tried to do a regular job like his peers. He worked as a lab technician in the New Cotton Mills belonging to the Lalbhai Group, which is credited for bringing the jeans revolution in India. Following this brief stint, he even took up a job at the Geology and Mining Department of the Gujarat government.

Year 1969 was the beginning of a turning point in Karsanbhai’s career trajectory. It was the time when a brand named ‘Surf’ by Hindustan Lever Ltd (now Hindustan Unilever) established complete monopoly over the detergent market in India. A packet of Surf back then was sold anywhere between Rs 10-15. It’s USP was that it removed stains from your clothes and didn’t harm your hands unlike regular washing soap bars. However, this price point was not affordable to middle-class households, who had no other option but to resort to the old bar soap.

The entrepreneur in Karsanbhai saw this problem and figured out a solution. After he would return home from office, a young Karsanbhai invested all his time and resources into creating a phosphate free detergent in his backyard. The thing he needed to keep in mind was to create a detergent whose production cost was low so that everyone could afford it. After many trials and failures, Karsanbhai developed a formula for a yellow-coloured detergent powder that could be sold for a mere Rs 3. He decided to name his invention after his daughter Nirupama. And that’s how Nirma came into being.

Karsanbhai Patel’s sale strategy for Nirma detergent

Once the product had a solid formula, Karsanbhai Patel decided to start selling it. Every day, for three years, he would go door-to-door and neighbourhood-to-neighbourhood on his cycle and make a sales pitch for the detergent. Since it was a new product, he offered his customers a money-back guarantee if they found the product unsatisfactory. At the time, Nirma became the lowest-priced detergent in all of Ahmedabad. And this made Karsanbhai’s product an instant success. Three years later, he quit his Government job and set up shop in Ahmedabad to carry out this venture full-time.

His product was doing really well in some parts of Gujarat, however, there was a need to increase his reach. The norm at that time was to give retailers his product on credit. This was quite a risk, because if the product didn’t sell Karsanbhai would have had to shut everything. And so, he decided to try out something new.

He decided to invest a little money in television advertising. These advertisements, with their catchy jingles, targeted housewives. And this gamble paid off really well. Nirma became a household name and people wanted to buy it. However, at this time, he pulled back 90% of the stock from the market. For about a full month, potential customers asked about the detergent at their local stores but would have to return empty-handed. It was during this time that retail shop owners flocked to Karsanbhai and requested to increase the detergent’s supply. He obliged after another whole month. This strategy helped Nirma dominate the sales and even beat Surf at their own game. In fact, it went on to become the highest-selling detergent in the country. Even after a decade, it remained the largest sold detergent in India.

What Karsanbhai Patel and Nirma detergent did for the Indian economy

Nirma’s skyrocketing sales led to the creation of a new segment in the economy for detergent powder. It was of great quality and available at a low cost. Plus, the fact that it was made without phosphates made it the more environmentally-friendly detergent, compared to the others. Moreover, the process of manufacturing the detergent was a labour intensive process. And so, Nirma went on to employ over 14,000 people (as of 2004) and became a leading employer in the country.

Karsanbhai Patel’s other ventures besides the Nirma detergent

Once Nirma was dominating the detergent industry, Karsanbhai decided to venture into more FMCG industries. Nirma entered the premium market with its own set of toilet soaps, beauty soaps and even shampoos. The latter venture failed, although another one of their products, the edible salt Shudh is still around and doing well. Over all, Nirma holds a 20% market share of soap cakes and 35% share as far as detergents are concerned.

But that’s not all. Karsanbhai Patel even launched the Nirma Institute of Technology in Ahmedabad in 1995. This later grew into one of the leading engineering colleges in Gujarat. Another building that was an Institute of Management followed, and in 2003, the entire structure was consolidated under the Nirma University of Science and Technology, which is overseen by the Nirma Education and Research Foundation. Karsanbhai’s CSR called Nirmalabs education program, aims at training and incubating entrepreneurs since 2004.

Now, Karsanbhai Patel has handed over the reigns of his successful business in the hands of his two sons. In 2010, he was conferred the Padma Shri by then President of India, Pratibha Patil. Even today, Nirma remains the largest producer of soda ash in the world and the company has gone private since 2012. With his massive fortune, Karsanbhai Patel bought a six-seat chopper in 2013, which costs Rs 40 crore. This feat made him the third Ahmedabad-based industrialist, after Gautam Adani (Adani Group) and Pankaj Patel (Zydus Group), to buy a helicopter. As for Nirma, it still remains among India’s preferred choice of detergents. And its jingles will forever be etched in our memories.