Way back in the early 1950s, an economic survey of spending in India revealed that Upper middle class women were spending valuable foreign exchange on western cosmetics while the more middle class women had no access to quality makeup because of non-availability in the Indian market. Nehru was not very happy because it was affecting the forex reserves. Maintaining the forex reserves was of utmost importance considering the fact that Indian economy was still in its nascent stage. Nehru hit upon the idea of a home grown beauty brand which would cater to cosmetic needs of Indian women.
Nehru knew that only JRD Tata had the passion and entrepreneurship skills to tackle the challenges and personally requested him to come up with a solution. Tata, the always hungry entrepreneur, took on the challenge ecstatically.
Doing market research to find out the needs of Indian women and hiring experts & chemical engineers from the beauty industry was not really a challenge for JRD but coming up with a brand identity certainly was. Finally, after giving it a lot of thought, he named it “Lakmé” after the French Opera(Opera is an art form in which singers and musicians perform a dramatic work combining text and musical score, usually in a theatrical setting).
The reason he chose this particular French opera name was because “Lakmé” derives its name from Sanskrit for “Lakshmi”, the goddess of wealth and epitome of beauty. Funnily the name is a western take on the Indian goddess of wealth Lakshmi. It was the perfect name for the company as it was actually bringing wealth to the nation (by saving precious forex), could correlate itself very well with the beautiful Goddess and it appealed well to upper middle class women due to its videshi sounding name (Lakshmi lipstick or Lakshmi kajal would never have worked with the Indian ladies who were used to buying foreign cosmetics).
This being the first time an Indian cosmetic company was being founded, extensive market research went into determining the needs of the Indian skin and colour. Experts were hired from every field. That was the kind of thought process which went into any job which JRD Tata took up and the results were always exemplary. In 1952 Lakmé started as a 100 per cent subsidiary of Tata Oil Mills. Simone Tata, the French wife of Naval H. Tata, joined as managing director in 1961. Being a western born woman who had made India her home, she understood the core formula of the brand and was instrumental in shaping Lakmé into the household name that it became. It was a hugely successful brand and the rest is history. In 1996, Tata sold its stake in Lakme to HLL since it felt that HLL being an FMCG company will do better justice to the company and HLL have continued to efficiently nurture the brainchild of JRD. A recent survey ranked Lakme to be one of the top 50 most trusted brands in India.