‘Patanjali’ – a brand whose product is available today in almost every house of the country. This company has marked its presence known to almost the entire 1.2 billion population of our country and has been one of the fastest growing FMCG Company in India. It has its headquarters and manufacturing units at Haridwar, Uttar Pradesh. Being founded by Swami Ramdev and Acharya Balkrishna, Patanjali follows a combined approach of technology, yoga and ayurveda. It has a brand valuation of INR 30 billion and accounts for around 5 % of the FMCG industry. The sales of the company have doubled almost every year since 2013 and it has become the major disruptor in the FMCG industry in India.
Not everyone gets such huge success and not everyone is able to be successful throughout. Patanjali was a huge game changer in the FMCG sector but will it be consistent in maintaining it? Let us find out the story behind its success and whether it still continues to grow in the race or has started facing depressions?
It all began back at the time when Baba Ramdev appeared on the televisions as a spiritual yoga guru providing the people with free yoga exercises and techniques, and also having long discourse transactions with people. His preaching became more popular and he became an approachable saint by the Hindu population. With these things in background, his friend Acharya Balkrishna making use of Baba’s growing popularity came up with Patanjali Ayurveda Limited (PAL) with the use of his ancient Ayurvedic knowledge and the blend of modern technology. Patanjali entered into the market with a wide range of Ayurvedic medicines and later on diversified into the consumer goods category, attracted by the low entry barriers in the segment.
Patanjali currently produces 700 different types of products ranging from Natural Health Care, Natural Food Products, Ayurvedic Medicine, Herbal Home Care, and Natural Personal care. Some of its most popular products include Patanjali Dant Kanti, Patanjali Kesh Kanti, Patanjali Chyawanprash, Pantanjali Ghee and Patanjali Honey among others.
PAL was able to establish its business from scratch in a few years, thus gaining huge market share and posing a major threat to the big established multinationals in the industry. Patanjali followed a combined approach of low prices, natural and pure proposition and ‘swadeshi’ positioning to conquer the Indian population. One of the major reasons for its success was also its distribution strategy. PAL follows a twofold distribution strategy. Firstly, it makes its product available through its own retail outlets to establish a wider consumer base and once it has been established, the products are then made available to the public through general retail and pharmaceutical stores to cater the demand. For instance, in Delhi-NCR, Patanjali initially established its own ‘Chikitsalayas’, ‘Swadeshi Kendras’ and ‘Aarogya Kendras’ where it provided free medical consultation services through its own certified ayurvedic doctors. This attracted the early adopters segment among the middle class population and increased the sales of its ayurvedic medicines. A certified and trustworthy medical service in the name of Patanjali being free of cost provides greater footfall through word of mouth to friends and relatives. These stores provided an easy access for other products introduced by the company to the consumers. Thus, once the consumer base for the product got established, PAL shifted on with its product to the general trade stores which also helped the company in maintaining its goodwill in the market. Baba Ramdev as the brand ambassador for Patanjali is another major advantage as he is the portrayer of health and wellness among the Indian masses due to his association with yoga and ayurveda since years. Patanjali also follows a pricing strategy of charging around 20% less than its competitors. The company also has an innovative R&D facility combined with the latest technology in order to cater to the latest needs which is also noticeable from its decision to sell its products on E-Commerce platforms.
Patanjali recorded a sales turnover of Rs.10,561 crores in FY 17 and Baba Ramdev in a press interview said, “We have created capacity of Rs 50,000 crore and we are racing ahead now. Our target is to beat HUL by next year”. However, this target seems unachievable because as per the data records of Patanjali it has recorded the same sales in FY18 as it had in FY17 and thus it remains far away from beating Unilever which records an annual turnover of approximately Rs.30000 crores, three times the current turnover of Patanjali. There are many reasons for the low growth year faced by Patanjali. The increasing competition in the FMCG sector through introduction of herbal and ayurvedic products by Unilever where it relaunched its Ayush brand of Ayurvedic personal products, and also the massive changes in tax filing due to imposition of GST have also impacted the growth of Patanjali. As per some industry experts, the reason for this downfall is the huge diversification into different product lines by the company. The company should have its focus on specific high growth and high margin segments. The stock renewal process in the retail shops has adversely gone down which forces the consumers to shift to other brands due to unavailability and thus losing on to trust and brand loyalty from consumers.
Baba and Acharya Balkrishna have future plans of entering into the textile industry and open 100 Patanjali Paridhan stores, but the question is ‘Will it succeed?’Patanjali should now follow the advice of the industry experts and focus on capturing the market share of specific core products from its competitors rather than constantly increasing its portfolio. The low sales growth year was an alarm to Baba Ramdev to rethink upon his decisions and for us to know whether Patanjali still continues to be the disrupting force in the FMCG industry.
The Commerce Society, SRCC 