Surf Excel: Lalitaji has finally delivered the goods

HUL decided to take the ‘premiumisation’ route, which meant pushing products with steeper price tags but better quality. (Image source: hul.co.in)

This is a story of the rarest of the rare unicorn, the one that has generated more than a billion dollars in actual sales, not mere valuations. In other words, it’s a unicorn that enjoys its consumers’ true, unfeigned patronage and is not propped on the shoulders of investors. It is also the story of the transformation of the Indian consumer who has always been sneered at for being ‘price conscious’, or the one that would trade quality for a cheaper price tag.
The brand in question is Surf Excel, a premium detergent brand owned by Hindustan Unilever Ltd. It generated $1 billion in sales in 2022 and with that, it became the only non-food brand in the fast-moving consumer goods (FMCG) market to acquire the exalted status of a unicorn brand.

Even in the food category, ParleG is the only standalone (different from the mother brand Parle) brand to have brought home more than a billion dollars in sales. There is, however, a distinct difference between Surf Excel and ParleG. Though both belong to the daily consumption basket of an average consumer, these are placed at the extreme ends of the consumption spectrum. ParleG is a mass brand targeted at the consumer at the bottom of the pyramid, and hence, is priced quite competitively whereas Surf Excel is a premium, and hence, a pricier brand, supposedly catering to those at the top but it’s a supposition that has been disproved by the brand’s latest sales records.

Growth In Challenging Times
What makes Surf Excel’s spectacular performance even more remarkable is that it has come at an exceptionally challenging time. The pandemic and the geo-political tension have wrecked economies across the world. India, like most of its global counterparts, is faced with the challenges of rising oil prices and inflation. According to a paper, titled ‘Anatomy of Inflation’s Ascent in India’,  by three authors from the Reserve Bank of India, inflation shot up to 7.8 percent in April before easing to an average of 6.8 percent during May-November 2022 and it has stayed elevated ever since. This has led to prices shooting through the roof while dampening demand and consumer sentiment.

Clearly, it isn’t an upbeat economic environment that has helped Surf Excel expand its sales, and that too, 32 percent, or thrice the rate at which the market grew.

Quality Over Price
Surf was always positioned in the market as a premium product. In its popular advertising campaign in the 1970s, iconic Lalitaji, when confronted with buying an expensive detergent while bargaining with a vegetable seller for a few rupees, retorts that it’s a sensible buy though it’s expensive because it delivers better results. Her effort to appeal to the consumer’s better sense, however, didn’t bring in desired results. The consumer instead chose a regional brand Nirma launched at less than one-third the price of Surf.

Heeding the message, HUL launched Wheel, a cheaper detergent brand, in the mid-1980s that stole the march over Nirma but only to be beaten by another regional brand Ghari in 2012. Throughout this period, the primary tool used by companies to hit rivals or corner a bigger market share was competitive pricing. The strategy, however, was not conducive to their bottom line. Winning market share at the cost of profitability is a bloody business that is not sustainable in the long run, unless one is spending someone else’s money. (The reference to the current-day unicorns here is not incidental.)
Having come back bruised from the battle for market leadership, companies began to rework their game plan. HUL, for instance, decided to take the ‘premiumisation’ route, which meant pushing products with steeper price tags but better quality. That’s when Surf’s positioning changed from simply being an expensive product to one that delivers more value and, stands up for values, such as sustainability and letting children be, and “daag achche hai” tagline was born.

Change Of Strategy

The consumer, however, didn’t make the brand a winner overnight. Surf had to work harder, and it took its brand managers over a decade of innovations in product quality, packaging and pricing to woo her back. Surf today is available in powder, liquid, and capsule formats in different packs and sizes and at different price points that have helped expand the consumer universe it could appeal to.
According to HUL, 40 percent of its sales last year came from packs priced at Rs 10. This means it isn’t only the consumer at the top of the consumption pyramid who buys Surf; those in the middle, too, are using it to wash their dirty linen. And this is what makes this milestone in Surf’s journey a landmark in the consumption story of an average Indian consumer, too. This is a validation that she has evolved from being a price-sensitive buyer to a discerning consumer who is happy to shell out extra bucks for better quality and efficiency.

Lalitaji, it seems, was ahead of her time.

Archna Shukla is a senior journalist based in Delhi. Views are personal, and do not represent the stand of this publication.