The Story of Parachute Oil

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Early Days

Let’s read the story of Parachute Oil!

Back in those days, we used to go to the school applying this hair oil. And if one didn’t apply hair oil, they were given this hair oil in school to apply. For many years this has been a part of our life, whether it’s 90s or early millenniums. This was the hair oil for every common household.

the story of parachute oil

A mother would never think of a low-quality oil for her kid and that’s the reason Parachute still has a dominant market share over the years.

How Blue Parachute Bottles Came into Existence?

Initially, the coconut oil was sold in big tins of 15L. Then, the parent company Marico found the opportunity in selling it in small packing.

But with a new opportunity comes new challenges as well.

Here the challenge was to stock it in the small sized plastic bottles.

The problem of rats was a big reason to worry during those times. They had to come up with a plan to tackle this issue. The problem with plastic bottle was that rats could bite it with their teeth. And they loved nothing more than an oil with a coconut smell.

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Marico instead rounded the plastic bottles and hardened them so that rats could not bite and tear it. It worked.

Story of Parachute Coconut Oil

There came the story of the famous parachute coconut oil. People at Marico took the dried coconuts and cut it into two halves.

After the water had been taken out, they sun-dried it for 5 days. Thereafter, removed the outer shell and then the copra was sun-dried for a couple of weeks. The copra was poured into a oil extractor and the result of the extraction was the coconut oil after all the filtering for about a day.

Bonus Video: Parachute Oil Ad Campaign

Grabbing Market Share and The Problem of Copy Cats

Parachute has a 60% market share. It contributes to around 40+% of the sales of Marico Ltd. But that’s not it!

With huge market share comes a huge cost to maintain the market share. The cost of the whole process and extraction of copra is quite high. But later in 2018, the copra prices started to reduce and the profit margins went up.

Last year their margins got a boost in Q1 profits through the decreasing prices of copra.

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Moreover, it also had to deal with the problems of imitators in the market. These imitators also ate the profits of Marico.

They had to deal with the imitators by getting expensive moulds which was difficult for imitators to imitate. The plastic containers were made for all seasons and were tamper-proof with flipflop packaging for ensuring purity.

For the rural areas, the company also introduced oils in sachets and smaller quantities which also disrupted the loose oil market.

Why Marico Doesn’t Write Parachute Coconut Hair Oil on Packing?

One thing that might have amazed you is that you apply parachute coconut oil to your hair but nowhere on the packaging it is written – “Parachute Coconut Hair Oil”.

That is because the company is able to pay less taxes by not writing. Edible oil is taxed at 5% while hair oil is taxed at 18%.

Though they subliminally tell that it’s hair oil but never have they officially come out and claimed that. Although people can use the oil for cooking as well. It’s actually an edible oil which is actually good for the body. Moreover, you will also see an FSSAI mark on the back of the packaging. It states the Food Safety and Standards Authority of India approves of it as usable for cooking purposes.

How Did Coconut Oil Get its Name – Parachute?

Another question that would come to your mind is: why did a coconut oil get the name ‘Parachute’?

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It was Harsh Mariwala’s uncle who gave the product its name. During the Indo-Pak and Indo-China wars of the 1960s, the parachute troops used to be covered in the media press very often. This was enough for the name to survive for as long as the company wanted.

Thanks for reading!

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Cover Image: Slideshare

 

References:

Shivangi, N. (2019, December 23). Parachute’s Tax Planning – A Case Study. Retrieved September 20, 2020, from https://kailashafoundation.org/2019/12/23/parachutes-tax-planning/

Sriram, M. (2017, May 23). For good hair days! Retrieved September 20, 2020, from https://bloncampus.thehindubusinessline.com/columns/brand-basics/for-good-hair-days/article9707993.ece

Pawan Kumar, I., & Kumar, P. (2018, October 16). Marico - Onwards and Upwards. Retrieved September 20, 2020, from https://finception.in/stocks/marico/

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Priyansh Chanchani
Fresh graduate in Business Administration with a specialization in Finance. Learner of capital markets and investments.
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