FMCG Sector My View

Patanjali, a potential competition for FMCG Co.’s?

In a short span of less than a decade, Patanjali recorded a turnover of Rs. 2,500 Crores in FY15, higher than what existing FMCG companies had achieved over a decadeAccording to the industry data, it has a market share of 4%-5% (FY15) despite having fairly limited distribution. Patanjali has also gained considerable traction in the toothpaste category.

Patanjali Ayurved Limited was established in 2006 by Baba Ramdev along with an Ayurveda practitioner, Acharya Balkrishna. Although Ramdev baba does not own any stake in the company, he has played an important role in gaining brand’s visibility.

The company manufactures around 800 products and has expanded to a full range of consumer categories, from edible oils, biscuits, and noodles to toothpaste, hair and skin care products. It sells its products through clinics, wellness centers and outlets. The company partnered with Future group to sell its products through Future Group’s stores and has plans for joint manufacturing in future.

The exponential growth of Patanjali is attributable to increasing appeal of ayurvedic and ‘natural’ products, price discounts (10% – 30%), better quality, and a growing desire to consume Indian brands. It also has an advantage of being associated with Yoga guru, Baba Ramdev. The company stepped up its advertising and promotional spends and roped in Hema Malini as its Brand Ambassador. According to BARC, Patanjali’s advertisements were one of the top three brands advertised on television (Nov’15).

Hence, Patanjali is definitely an exciting development in the FMCG Industry. Patanjali has been a disruptor in the FMCG market. It poses challenge to FMCG companies like Dabur and Marico that focuses on natural products. Going forward, Patanjali might eat market share of the FMCG majors present in oral care, hair care and OTC (over the counter) products. The future may see price wars or new product launches to cope with the stiff competition. Bring it on! As we know the major FMCG players are not going to be quiet!

Leave a Reply

Your email address will not be published. Required fields are marked *