The iconic handmade soap brand Medimix is facing tough competition from MNCs and home-grown brands, but the company believes it can ‘innovate’
There are times when slow and steady does win the race. Take the case of Chennai-based Medimix, which is the world’s largest selling handmade Ayurvedic soap, and is entering its 50th year. The family-run company that makes the soap has believed in step-by-step progress and doing it their own way, be it production, marketing or distribution. They are convinced this is the reason behind their successful survival.
Medimix was created by Dr VP Sidhan, a doctor with the Indian Railways, in 1969, to treat railway labourers who developed skin allergies and diseases. Sidhan comes from a family of Ayurveda practitioners. The family used to make an oil that was prescribed for all kinds of skin disorders. Sidhan started using this oil to make soaps in his kitchen, along with his wife. He used his connections to place them in a few medical shops in Chennai. The word spread and people started buying the soap.
The formal manufacturing of Medimix soaps began in the 1970s, in a small rented building in a Chennai suburb, with just one employee. It largely remained a prescription product. The early advertisements carried the tag line ‘doctors prescribe’.
The company started supplying soaps to hotels. This strategy worked well. Slowly, the hotel market was captured and one can find the jade green Medimix soaps in most hotels, other than five-stars. That helped convert many to Medimix. Proper marketing began only in the 1990s, when private regional TV channels entered the scene. The company started advertising on Sun TV and Asianet. “We started using opportunities that came up,” says AV Anoop, MD, AVA Cholayil Group. The company now believes in high-profile advertising.
In early 1980s, labour problems made the promoter shut down the unit in Chennai and shift to interior Tamil Nadu to manufacture soap, which also created job opportunities there. The work in Chennai resumed in 1983 when Anoop, Sidhan’s son-in-law, got on board. Another unit was started in 1984. In 2007, Sidhan partitioned the group into Cholayil Pvt Ltd, managed by Pradeep Cholayil (Sidhan’s son) in the north, and the AVA Group to be managed by Anoop in the south.
AVA Group has six factories manufacturing soaps in Chennai, Pondicherry and Vizhupuram. The workers initially came from rural areas. “We trained them and taught them to maintain the highest hygiene standards,” says Anoop. In the 1980s, the group started expanding. Soaps continued to be handmade, packaged and stamped. In 1983, as many as 5,000 soaps were being made per day. It was time to scale up and it posed problems, as soaps had to be manually made. Consultants said it was not possible to increase numbers.
All the machinery in Medimix has been built in-house. “We have always worked in consultation with workers. Employees share responsibility for innovation, so everybody feels involved in taking the business forward. Good innovations are carefully evaluated and rewarded. When this problem of increasing productivity came up, our workers told us what to do. A soap gets packed every second in the factory. There are 18 herbs inside a soap. Today, each factory makes 80,000-1,00,000 soaps per day,” he adds.
Anoop says that the company does not extend credit to the market. “Initially, we gave six soaps to each shopkeeper. If we had given credit, where is the incentive for the shops to push soaps?” Medimix has no borrowings either. “We don’t want to go public or invite investments from outside.”
Anoop has expanded the range of products and services under the AVA brand. Kaytra herbal products, a JV with Ambika Pillai of Kerala, has had a soft launch in Tamil Nadu. Production facilities have been set up in Pondicherry and Kerala. Melam, a Kerala-based spice and masala brand acquired two years ago, has also had a soft launch in Chennai. “We know this is a highly competitive market. But the demand is huge here and globally.” Sanjeevanam restaurants offer health food. A huge multi-speciality hospital is being set up in Kochi. “We will follow our path of not rushing into any anything, but making haste slowly,” says Anoop.
Medimix is still the iconic brand that has global leadership. Competition has become intense with well-known legacy brands such as Dabur, Baidyanath, Zandu, Emami, Himalaya, Charak and Vicco. MNCs have also jumped in. Everybody wants to cater to customers’ growing preference for herbal products. The Ayurvedic products market is estimated at Rs 50,000 crore. “The entry of MNCs, Patanjali and other brands has only expanded the market, and not eaten into ours,” he says.
Medimix has slightly lesser than 300 employees, and most of them women. They are faster than machines. “We had more earlier. With increasing prosperity and the children of the women getting educated and doing well in life, it is difficult to find people. Very few young people are willing to do this work. The average age of our employees has gone up to 40.”
What is the future of handmade soaps, then? “So far we have managed to increase productivity each month. I don’t see major changes happening in the near future. There is going to be labour shortage eventually. But then we always innovate to get through emerging problems,” he says.