Baba Ramdev’s Patanjali Ayurvedic Products: Serving, Profitably?
“This is just the beginning. Nestlé, Hindustan Unilever and Colgate-Palmolive will be left clueless eventually.”1
Modern trade changed the way Indians shopped in the 1990s, then e-commerce and online shopping made way during the 2000s. This time around, it was Patanjali Ayurved Limited (PAL) – the latest disruptive force in the Indian FMCG sector – started in 2006 and grown exponentially since then. After clocking a sale of ₹5,000 crore ($744 million) in 2015–2016 with a growth of 150% over previous year, Baba Ramdev’s (Ramdev) PAL was targeting ₹10,000 crore revenue in 2016–2017.2 PAL, that started only a decade back, became a FMCG giant and grew ten times in size in the last 5 years – an unprecedented feat in India’s FMCG sector. Relying on ‘Brand Ramdev’, pitching its products as swadeshi (indigenous), using technology for mass quality production and adhering to traditional ayurvedic ingredients, PAL’s products overshadowed the offerings of all other FMCG companies in the Indian market.
The set revenue target of 2016–2017, if achieved, would put the company ahead of multinational giants like Nestlé, Colgate-Palmolive and Procter & Gamble. In addition, Ramdev has set a very ambitious sales target of reaching of ₹1 trillion ($14.9 billion)3 by 2025–2026, a 20-fold increase from the current numbers. The target represented a third the size of the current Indian packaged consumer products market (₹3.2 trillion4). Even HUL, present in India since 1888, could not reach one-third of PAL’s set target for 2025–2026. While the industry experts agree to the fact that PAL would be a major threat to domestic and global FMCG rivals alike, the company was facing numerous controversies and concerns that seemed to hamper its growth.............
1 Arnab Dutta, “Baba Ramdev’s Patanjali aims to double its revenue to Rs 10,000 cr in 2016-17”, http://www.business-standard.com/article/companies/baba-ramdev-s-patanjali-aims-to-double-its-revenue-to-rs-10-000-cr-in-2016-17-116042700061_1.html, April 27th 2016 (accessed date: June 3rd 2016)
3 Sounak Mitra, “Inside Baba Ramdev’s Patanjali Empire”, http://www.livemint.com/Companies/hLEBBx17cFY5rPjTjmIP9O/The-Patanjali-story.html, June 3rd 2016 (accessed date: June 3rd 2016)