Patanjali Ayurved has seen a meteoric rise in the past few years becoming a household name. A combination of low prices, claiming to be ‘natural and pure’ and the ‘swadeshi’ positioning are widely acknowledged behind their success.
Known to be the controversy child in the FMCG business, Patanjali has surprisingly survived in the market battling it out with other leading FMCG products. With over 5000+ retail outlets, selling over 444 products including over 30 types of food products, it has garnered a pretty decent customer base for itself.
In the era of start-ups, every other company claims to be disruptive, but hardly a few of them pass the litmus test and survive. This would either mean creating a new product that addresses an untapped blue ocean or to create cheaper, simpler or convenient alternatives to existing products.
Starting off as a Pharmacy store back in 2006, Patanjali has grown into one of the serious contenders having an array of products catering to all FMCG segments.
One just can’t deny the influence of Baba Ramdev who played a significant role in this ‘sprint to success’ of Patanjali. Baba Ramdev – a yoga guru who shot into fame with his free yoga lessons that were telecasted on TV back in 2003, has captured all the buzz of the market through his pharmacy ‘Patanjali Ayurved Limited (PAL)’.
Today Patanjali Ayurved is spread across the country and sells a splendid range of food and personal care items. It is larger than some of the peers in the industry such as Emami, Jyothy Labs who have been in the market for more than two decades. Patanjali is also perhaps the fastest growing FMCG in India being the latest entry to the 5000 Cr club within less than a decade.
With a single brand strategy (branding all its products under the same name – Patanjali) like Google and Microsoft, Patanjali was able to stand out from the other market leaders and it was much easier for Patanjali to gain visibility in the market with this strategy.
Quality products at a cheap price, ‘Made in India’, the Swadeshi positioning have been some of the key contributors that made Patanjali stand out from the crowd.
Patanjali’s aim is to make products available to the consumer at the fairest price, and therefore most of its products come at a considerable discount to existing options. The price factor and uncompromised quality are some of the main reasons for its loyal customer base for the given product category.
“Our profit margins are miniscule because the main aim is not to make profit,” said Ramdev. “Profiting from patients is against the philosophy of Ayurveda, so we aim at minimum profit from our health products. Our input costs are low because we source directly from farmers, avoiding middlemen.” Salaries are also modest. “There is no one in our company who is paid crores as salary,” he added. “Most companies have administrative costs of around 10 per cent of their revenue, but in our case, it is just two per cent.”
Initially, Patanjali shunned the conventional distribution network, preferring to rely on its own channels of super distributors, distributors, Chikitsalayas (franchise dispensaries) and Arogya Kendras (health centres which sell Ayurvedic remedies). Once it turned to retail outlets from 2011, revenue began to multiply manifold.
Beyond Patanjali’s flagship ayurvedic range of products, their strategy is to simply create products that people are already used to using and not try to innovate. Even the product names are very similar. This is very clever, as it significantly reduces the friction for the end consumer. They have established well-certified factories and herbal park as any other pharmacy company and they have one of the best Ayurveda research establishments in India and world.
The swift rise of Patanjali driven by a large variety of product offerings coupled with unconventional marketing strategies has disrupted the whole FMCG sector and revolutionized the industry in a record time. Patanjali’s dizzying growth story is now the talk of boardroom discussions and case study at management schools. It has become a household name and a success story.
– Jane Sharma