What can D2C learn from Surf Excel's $1 billion sales? 👕
Welcome to the 129th edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 94,400+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more
1959 → HUL launched Surf Excel in India 🇮🇳
2023 → Surf Excel is now a $1 billion brand 🤯
Here's how it built the D2C empire ⬇️
Quick context 🗓
FY 2022-23 was successful for Hindustan Unilever, as Surf Excel posted ₹8,200 Crore & Brooke Bond ₹5,000 crore in annual revenues. Surf excel's growth of 32% was almost 3X the detergent category growth.
Here’s how Surf Excel is winning ⬇️
And, lessons for D2C brands.
First/ understanding the category 🙇🏻♂️
Thousands of local detergent players in Bharat. Expanding to metros requires money for shelf space. Cracking rural distribution is key. Heavy distribution and retail network over decades created success. Massive operations.
Second/ educating the category 📺
Indian consumers used to think scrubbing clothes caused damage, but Surf Excel showed them their detergent wouldn't cause damage. Their TV commercials conveyed this message for decades.
Third/ right positioning 🏆
Surf Excel is perceived as a premium upgrade, leveraging trust from cleanliness tests of “before & after”. This enabled incremental price elasticity, and Surf Excel has 43% market share even though it's not the cheapest.
Fourth/ price point capture 💰
HUL had had competition. Proctor & Gamble wanted to target lower-priced market. HUL launched Wheel Bar, creating an entry price point, capturing the early market too.
Fifth/ the sachet pricing 🤯
The rural Bharat wants value product but lacks one shot appetite to pay. Surf Excel launched sachet pricing & 40% of it’s revenue comes from sachets. If this isn’t “understanding the users” - I don’t know what is.
I wrote a larger piece on why sachet pricing works in India. Read HERE
D2C is a hard business to crack 🙇🏻♂️
Especially when you have limited customer lifetime value. This is where finding low cost customer acquisition channels become important. Over 200+ D2C founders & leaders from BlissClub, Lenskart, MyMuse & more are solving their customer acquisition cost problems at GrowthX. Learn science of D2C customer acquisition.
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