The problem with the ‘sachet revolution’

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Editor's note: A small shampoo sachet of ₹1. A little soap of ₹2. A finger-sized coconut oil bottle of ₹2. Most Indians may have used these at least once in their lives. As an economist, I have always wondered why we see them in such large volumes in most Indian shops, especially in rural areas. In the developed world, rural consumers generally buy larger bottles of shampoo or oil or body wash, or larger soaps. When I began to teach a course on the Indian economy more than a decade back, I used to put this up as a question to my students—much to their amusement, and my fun. Indian textbooks on marketing management or rural marketing are instructive reading here. They will tell you that the “sachet revolution” was India’s “disruptor innovation” in the 1980s, and its pioneer was one Chinni Krishnan from Cuddalore, Tamil Nadu. Those were the days when a shopkeeper in the village would cut a Lifebuoy soap into six pieces and sell them at a price little more than one-sixth that of the full soap. Similar was …