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Vol. XXX No. 17, January 1-15, 2021
A recent news item announcing the demise of Dr. C.K Rajkumar of Velvette Shampoo fame caught my eye. It brought back memories of my long association with rural marketing.
As a guest faculty on the subject of rural marketing at management institutes across the country, I always devote a class to the sachet revolution of the 80’s, which helped open rural markets to FMCG companies. The trend made it possible for a poor villager to buy expensive brands of daily consumables like soaps, shampoos etc. in small packs at prices he could afford.
Unlike urban folks who bought their provisions on a monthly basis, a farmer who lived on a weekly salary bought items that lasted him just for a day or a week. When I went on field visits in the ‘70s, I would notice the village shopkeeper splitting a cake of the popular Lifebuoy soap into six pieces and sell each piece at a price that was a little more than the price of a one-sixth piece – satisfying a customer demand, and at the same time, making some extra money for himself.
In classes, after introducing students to the concept of the sachet revolution, I would ask them to name the inventor. The answer would be invariably be either C.K Rajkumar or his younger brother, C.K. Ranganathan, the current CMD of CavinKare which markets the popular Chik Shampoo. Neither is the right answer. In fact, it was their father Chinni Krishnan, based in Cuddalore, Tamil Nadu, who introduced the sachet concept to the Indian market, long before multinational companies woke up to the potential of the idea.
Chinni Krishnan was an agriculturist who was also into the pharmaceutical business. He used to get perturbed by the sight of poor children with unkempt hair walking on the streets. He dreamt of a day when the common man could enjoy everything a rich man does. He often used to say, “Whatever I make, I want the coolies and the rickshaw pullers to use. I want to make my products affordable to them.”
In those days, talcum powders were packed in tin containers and priced high. He repacked the contents in smaller 100gm, 50gm and 20gm packs and sold them at a cheaper price. He did the same thing with Epsom salt. He was confident that even liquid items could be packed in sachets.
How did Chinni Krishnan first develop the sachet? He first modified a machine that sealed PVC folders and then took a transparent hose pipe that was used to water plants. He sealed the transparent plastic at one end and filled it with water and then sealed it at the other end. The first experiment was not successful. He tried alternative materials using the same idea until he got the right solution. Thus the sachet idea was born. The first items he sold in sachets were hair oil, honey and shampoo, in and around Cuddalore.
Chinni Krishnan was a great innovator, but a poor marketer. Selling products in sachets was his mission and he used to tell his sons that “this is going to be the product of the future”. Unfortunately he did not live to see his dream come true.
Chinni Krishnan died in 1979 at the relatively young age of 48, a couple of years after he got into the sachet business. When he died, it was discovered that he had taken a bank loan of Rs 2 lakhs from the State Bank of India. The bank threatened to auction the family house which was mortgaged if the loan was not repaid. To save the family house, his sons Rajkumar and Ashok Kumar, a doctor and lawyer respectively, resigned their jobs and took over the business even though they had no prior knowledge of the domain. They introduced Velvette Shampoo in a sachet pack which they sold at Rs. 2 a sachet. The credit for making Velvette Shampoo a famous brand must go to Dr. Rajkumar. As the business started picking up, he took help from Godrej Soaps to reach markets not only in India but also abroad.
C.K. Raj Kumar, the man who pioneered the concept of sachets in India.
While it was Dr. Rajkumar who made his father’s dream come true initially, today it is Chinni Krishnan’s younger son C.K. Ranganathan, the Chairman and Managing Director of CavinKare, who has shown the world that it is possible to beat the multinationals even in the most difficult market of fast moving consumer goods. Though he was not academically well qualified like his brothers, the entrepreneurial spirit which he inherited from his father made him break away from the family business very early because of a difference he had with his brothers over how the business should be run. He started his own company Beauty Products and started selling the now famous Chik Shampoo at Rs. 1/- a sachet. It was directly in competition with Velvette shampoo. Interestingly, the name ‘Chik’ was coined using letters from his father’s name Chinni Krishnan.
Chik products in sachets and containers. Courtesy: The Hindu Business Line.
He was to take the brand Chik to great heights using interesting promotional ideas aimed at rural markets. Within a couple of years, Chik overtook Velvette and became the top shampoo brand in South India. The success of Chik motivated Ranganathan to diversify into other fields like dairy, personal and professional care, food, snacks and beverages with brand names like Chik, Nyle, Karthika and Cavin, all marketed under CavinKare, the new name of his company. With a turnover nearing Rs. 1,500 crores, the Chennai-based CavinKare is today one of the leading players in the FMCG segment in India. Chinni Krishnan would have been proud of his youngest son’s achievements.
The inspiring story of Ranganathan & CavinKare is well known and Ranganathan has won many industry awards. But his father, the original innovator of the sachet, was never recognised for his revolutionary concept until recently, when at the Disruptors Tamil Nadu 2018 event hosted by YourStory.com he was posthumously conferred with The Legend of Disruption Award. The award was received by his four sons at a glittering function in Chennai.
The award was a long overdue recognition for a man whose invention not only revolutionised rural marketing but has penetrated even urban markets such that every conceivable product, is now available in sachet packs. Like Karsanbhai Patel of the Nirma detergent fame, Chinni Krishnan was a pioneer who proved that anyone, irrespective of his economic status or background, can come up with new ideas which can disrupt the market place.