The Harvard Review had a recent article on how Proctor & Gamble’s Gillette division used “reverse innovation” to bring a new, inexpensive razor to India–the Gillette Guard. You can read the whole thing at the link but let me summarize:
- Gillette enjoys extraordinary gross margins in the Western world but don’t fare nearly as well in developing markets such as India.
- In India, Gillette historically focused on selling their low- and mid-tier American razors in different packaging. But the rural majority still shaved with double-edge razors, “a century-old technology that tends to cause far more cuts and bleeding” (I’ll get to that comment in a while…).
- P&G reversed the innovation approach at Gillette. It sent a team to India to research customers. They discovered the typical shaver (particularly in rural areas) was not only far more price-sensitive but also shaved in a completely different way: probably sitting on the floor, with a bowl of water, a hand-held mirror in low light, and “experiencing frequent nicks and cuts from his double-edged razor” (yeah, like I said I’ll get to that…).
- P&G/Gillette then created a razor to meet the specific needs of this consumer. “The result was the Gillette Guard, perhaps the most significant departure from its traditional product development in Gillette’s history. The Guard uses 80% fewer parts, a plastic housing, and a single blade to minimize cost while preserving ‘good-enough’ shaving performance. It also has a large safety comb to reduce nicks and cuts, easy-rinse cartridges for better cleaning without running water, and several other key features designed specifically for the Indian shaver.”
- Along with an Indian-centric product Gillette also built an Indian-centric business model. Manufacturing is done locally to further control production and supply chain costs, resulting in razors and blade cartridges selling for 15 and 5 rupees, respectively (about US $0.30 and US $0.10) — less than 3% of the Fusion ProGlide’s prices. “To distribute the product, rather than forming strong relationships with a handful of powerful retailers as in the U.S. or Europe, P&G had to strengthen its network of millions of Indian kiranas, or local shops.”
- Finally, unlike developed markets where the focus is increasingly on digital marketing, P&G invested instead in traditional ads featuring “Bollywood” actors.
The result? The article asserts that six months after its introduction, the Gillette Guard had over 50% of the market share by volume.
I’ve mentioned the Gillette Guard before. I think it’s actually a decent razor for what it is–inexpensive (well, in the Indian market. Getting one here in the ‘States is a little more expensive), engineered simply but with some interesting features, and designed with the needs of the typical user in mind. The article’s author suggests they need to apply that success to other emerging markets such as China and Africa, and then possibly onward to developed countries (possibly purposely disrupting their “core business” in the process).
But the author’s swipes at DE razors raised the hackles of traditional shavers. The article’s comment section is filled with defenders of the DE taking the author to task that the DE causes “frequent nicks and cuts.” Somewhat surprisingly to me–and to his credit–the article’s co-author wades right in to refute some of the criticisms.
Like many of those commenting on the article, I thought the complaints about DE’s were largely an “excuse.” After all, P&G/Gillette is looking for market share and profit (not necessarily a bad thing) with a proprietary product they have engineering control over (patents for DE safety razor blades have long since expired) so it would only make sense to criticize a competing product. However, there are some facts in the mix that Westerners may not know about. I was able to get the opinion of a major manufacturer about the state of DE razors sold to low income consumers in Indian and Asian countries and got some interesting insights–basically that the majority of DE’s made for those markets by manufacturers there are…well…poor quality. There are DE razors with plastic heads, poor shave angles, over exposure, etc. The name of the game is reducing the price of the product by any means possible as the majority of consumers are very low income and base purchase decisions on price – not quality. No wonder shavers get nicks and cuts.
Although I don’t like the environmental polluting aspect of yet another plastic cartridge, the Gillette Guard and the “reverse innovation” concept appear to be a success.
Take a look at the article and comments and let me know what you think.