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Will Baba Ramdev be able enough to sustain the meteoric rise of Brand Patanjali?

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.

Product lines offered by Patanjali - Mythical India
Product lines offered by Patanjali

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.

Ayush range of Ayurvedic products by HUL - Mythical India
Ayush range of Ayurvedic products by HUL
Dabur is also focusing on Ayurvedic products to counter Patanjali - Mythical India
Dabur’s range of Ayurvedic 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.

Ramdev at a Yoga Session - Mythical India
Baba Ramdev, Brand ambassador of Patanjali

 

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.

Price list of Patanjali herbal products - Mythical India
Price list of Patanjali herbal products

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.

Ramdev with Kishore Biyani of Future group - Mythical India
Ramdev with Kishore Biyani of Future group

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.
Baba Ramdev promoting Atta noodles launched by Patanjali - Mythical India
Baba Ramdev promoting Atta noodles launched by Patanjali
  • 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.
Baba ramdev with PM Narendra Modi, BJP - Mythical India
Strong connections to BJP

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.