We all have noticed the meteoric rise of Patanjali branded products in Indian market. The revenue has seen 150% rise in the last year touching the Rs. 5000 cr mark in just a decade of operations. The Patanjali range now has a wide array of 101 products under categories such as food, cosmetics, OTC products and ayurvedic medicines. This has raised alarms in the FMCG industry board rooms.
Majors are acquiring smaller ayurvedic brands and HUL is reviving its almost dead brand ‘AYUSH’ by launching 8 new products. It has also forced Indian brands, the likes of Dabur and Emami to not take their market share lightly. They have now woken up to the fact that Dabur Chawanpryash which enjoyed 40% market share and Emami creams which were the choice of middle class Indian women is under serious attack from a Yoga and lifestyle centre’s home-grown products.
India has always been the land of Ayurveda, herbals, yoga and vedic methods of healing. Indian-ness of the brand and its products has also helped it to forge partnership with retail tycoon Kishore Biyani’s Future Group which will open even wider channel of sales.
So what has led to the brand’s exponential growth:
1) Brand Ramdev
Baba who owns 90% in Aastha Channel sore to popularity after his early morning TV appearances began in 2002. Since then it has been no looking back. With a claimed following of 20 crore followers, NRI donations & political aspirations, the popularly known as half-naked sadhu has had a major impact on middle class Indians. He is one of the most popular names and although he doesn’t own a single share in Patanjali Ayurveda, he literally runs the show along with his close aide Balakrishna who owns 93% of the establishment.
2) Indian-ness and focus on health
Ramdev’s yoga lessons have helped so many people in solving their mental and physical issues. His stress on living a healthy lifestyle along with adopting swadeshi has made a considerable impact. The already established credibility had a very positive rub off on the brand Patanjali.
3) Pricing of Patanjali products
With focus on direct procurement form farmers, minimizing the administrative costs and not concentrating on profit making, Patanjali has been able to offer products at lower prices to Indian masses which helped in early adoption and wide acceptance.
4) Quality & Authenticity
Along with lower prices the quality of the product in itself has been a major focus area. For e.g. one of the highest selling product like Desi ghee has been widely accepted by Indian household when all other brands in the segment were considered adulterated.
5) Distribution and shelf space
Not only the products are now available at ever growing 300,000 plus retails outlets across the country, it has now tied up with Big Bazaar, Reliance Fresh, Spencer’s, SRS to tap into modern retail. Moreover, the brand now claims exclusive shelf space across retail outlets giving it wide visibility at the point of purchase.
But a few brand experts have also raised concerns over the exponential growth. Let’s understand what are the apprehensions regarding our swadeshi FMCG major.
- Too much dependence on Ramdev – Ramdev is the soul of brand Patanjali. He himself agrees to the fact that the brand is dependent on the fact but also claims that he will step back slowly and only the values will stay. He says that we can never have the firm listed as it would lead to shareholders influence on the values. But the question remains, once the current league of leaders step out who will take over the mettle as still continue to run the organization with the current values at its core.
- Brand Dilution – Entering into everything may lead to brand dilution. Many brand analysts believe the launch of instant noodles (which is not an Indian food) to cater to the popular demand is the first step towards this.
- Political connections and lack of Management – With Ramdev’s clear affiliation with the BJP, many believe that the change in power at the centre can lead to issues for the private organization. Tussles with FSSAI recently over the noodles and with the Income tax & ED in the past also point to the lack of management minds in the camp. Although there are hints that Patanjali might start recruiting from engineering and management schools soon.
Whatever might be the case, Ramdev has set up and interesting battle between Patanjali and FMCG giants for the marketers and brand analysts to take note for a few years to come.