The New Phenomenon!
Abhijit Burli ; March-2016; Money Wise
Patanjali Ayurved Ltd. is hoping to earn ₹ 5,000 – ₹ 10,000 Crore profits in the coming years, all of which is said to be diverted to non-profitable causes.
Ayurveda is often known as an ancient medicinal system that evolved in India which has been serving as an alternative medicine to Allopathy along with Homeopathy. Many who have known Ayurveda from the ancient Indian texts, say Ayurveda, whose origination is pre historic is actually a life science that deals with human mind and body. They say health of a human body depends on the balance of three basic elements Vata, Pitta and Kapha. Few others have viewed Ayurveda as a medicinal system evolved during the Vedic Age while it is also considered as a science developed during Indus valley civilization by few others. Ayurveda is also being looked at as a proto science by some and pseudo-science by few others who feel Ayurveda is just an alternative system of medicine which cannot be clinically proven, which however is debatable. However one wants to document it, the fact is it’s one among the preferred medicinal system in India today that’s spreading around.
Ayurveda is not just confined to India or around her, its antiquity and comparisons to ancient Chinese medicine has made it more popular world over. This indeed has created a huge commercial aspect towards Ayurvedic treatment and its products which is quite remarkable in spite of limitations in practices which are not 100% in line with the context to medical methods and procedures mentioned in Sushruta Samhita, Charaka Samhita and other ancient texts.
Apart from its medicinal aspect, for many years Ayurvedic products or Indian herbal products have been the preferred by consumer in the market. India had and still has some big brands in market who sell cosmetics, soaps-detergents, shampoo, tooth pastes, cleaning agents, energy drinks, food products and much more. Ayurvedic products who sell similar commodities had to take a back seat in the past while competing with these giants. But now with this huge visibility for Ayurvedic products, the market has not remained the same. Consumers’ preferences have gotten inclined towards Ayurvedic products when compared to many modern branded products. As a result, slowly but steadily Ayurvedic products have been pushing the modern branded products behind and writing its own numbers.
Few of the popular FMCGs in India:
Hindustan Unilever (HUL), Amul, Godrej, Dabur, Emami, Britannia, Wipro, Parle, Nirma, Himalaya etc.
Consumer Shift – What could have caused this?
- Could the acute competition by tons of brands in the market directed to woo the customer choked him?
- Has the consumer started feeling that other modern products are more harmful when compared to Ayurvedic products?
- Has the consumer experienced any positive results having used these Ayurvedic products?
- Has the consumer become socially-conscious and realized the importance and impact of using Indian made or Desi products to the Indian economy in the long run?
- Is it the increase in the awareness for Ayurvedic, Herbal and Organic products that’s driving the consumer in a new rather golden direction?
Anything or everything listed above could have resulted in elevation of Ayurvedic products in the big Indian market. Emami, Hindustan Unilever (HUL), Dabur, Himalaya Drug Company, Patanjali Ayurved Ltd. have been few of the major companies in the Indian market from quite some years now. In fact few of these companies have been around from decades. Some of these companies have been listed under Fast Moving Consumer Goods Companies or simply FMCG.
Although FMCG industry recorded no impressive growth during Q3 of the financial year 2015-16, the sales recorded for recently expanded Patanjali Ayurved Ltd. is quite different. It has been recording impressive numbers in contrast to others thus sending shock waves to all its competitors. Clearly it looks like increasing awareness about Herbal and Ayurvedic concepts among the consumers has resulted in greater consumption of Ayurvedic products. All thanks to the Yoga guru Baba Ramdev who has steered Patanjali Ayurved Ltd. to a brand that was never imagined to be. One factor that could have played a major role in acceptance of Patanjali products is many Indian homes lack home remedies these days. The modern lifestyles have driven long prevalent home remedies into its utmost dilution and when Patanjali Ayurved entered the fray with its products with its wide range of categories, consumers hooked on to it. Some of these Herbal products from other major companies in the past were also a touch too expensive when compared to modern products hence they shut doors to a huge customer base. Ever since taking such a giant step, Patanjali Ayurved Ltd. has managed to keep their product prices low at the same time ensure pure and good quality product. Although low price tags attract consumer for short-term, one cannot deny the fact that it could instantaneously become an alternative for a consumer by providing much needed visibility to the product. Reports suggest that the Patanjali Ayurved Ltd. has become a major name among FMCGs. In fact the Patanjali Ayurved Ltd. which was ranked 6th last year has now topped the list. The revenues which were secured around ₹ 450 Crore during the year 2011-12 are being expected to rise to ₹ 5000 Crore for FY16. Experts feel the revenues could reach a whopping ₹ 20,000 Crore by FY20.
As the saying goes fortune favours the brave, when Patanjali group decided to launch the Patanjali Atta Noodles, very popular instant food giant Nestle Maggi (2-minute) Noodles had got banned and the name got tainted. This probably gave Patanjali Ayurved an edge in the market and gained good momentum. Patanjali Ayurvedic Ltd. grabbed the Brass Ring by making use of the visibility it gained and transitioned it into much bigger arena by entering Television commercials. Patanjali group topped FMCGs by earning the number one spot among commercials outnumbering big market giants like Parle, Ponds, Cadburys and few more. Patanjali products like cow ghee, shampoo, biscuits, noodles, honey, dental cream and aloe Vera creams have been showcased regularly which the company says has been a conscious decision on their part to show its ads largely in news channels to target the required audience. It seems Patanjali Ayurved Ltd. has set aside ₹ 300 Crore budget for showcasing its products this year. Patanjali Ayurved Ltd. also seems to be taking on the big players outside of India as well. Patanjali group has been exporting its products to Canada, USA, UK and other countries.
Ever since Patanjali Ayurved took a herculean step to promote its products on main stream media, it quickly started to garner the attention of its target audience. The huge traction being gained by Patanjali products in India and outside of it directly impacted big brands which were already running successfully in the market. One such successful brand secured from decades is Colgate. Colgate has seen a significant drop in 2015-16 which is being speculated due to rise of Patanjali Dant Kanti toothpaste in the market. Patanjali Ayurved Ltd. group’s gain has been at an expense of many other companies in the market. Be it a modern day product company or even the herbal product companies. It’s not an exaggeration to say Patanjali products have taken chunk of its customers from its competition. For instance Patanjali Atta Noodles have made a direct impact on the sales of Nestle’s Maggi and Patanjali Honey has been sending shock waves to Dabur. This is being even termed as Swadeshi vs. Videshi War by few enthusiasts.
This steep rise in the market creates a question in one’s mind. How the Patanjali Ayurved Ltd. has managed to pull off these low price tags? Well, one thing that’s been said is that Patanjali group’s top management have given their services and do not expect a salary in return (which could be because of the tremendous respect Baba Ramdev has gained due his social works through Yoga). Then it’s said that the raw material procurement is efficiently done thereby arresting the possible leakages or commissions if any. Baba Ramdev has followers for his teaching in yoga world over who could add customers for his Patanjali Ayurved. Last year Patanjali group tied up with India’s biggest retailer, Future Group for promotion and distribution of Patanjali products. The current aim is to set up mega stores across the nation which is being thrown open to public and one can grab the franchise if they can satisfy the conditions demanded by Patanjali Ayurved Ltd.
Effects of Herbal Phenomenon?
- Herbal and non-Herbal based product companies are said to be planning to bring out products with natural ingredients.
- Godrej has launched a “Neem-Based” mosquito coil and Creme Hair Colour that contains coconut oil.
- Colgate is expected to hit back with a big marketing of its Colgate Active Salt Neem toothpaste to provide stiff competitions to its counterpart in addition to new products in the planning.
- Dabur has signed a deal with Snapdeal, which has agreed to sell Ayurvedic products on its e-commerce platform on Dabur’s new line of Ayurvedic product called ‘LiveVeda’
- Himalaya which is based in Bengaluru markets its products as the one with no chemicals and bleaches, now plans to expand into other categories this year by increasing brand awareness.
Baba Ramdev accused that the multinational firms like Hindustan Unilever, Colgate and Nestle are bribing people to get fake and adulterated Patanjali products tested in labs and said sometimes they even produce reports from fake laboratories to malign Patanjali Ayurved group, this was however declined by all the major counterparts.
Sri Sri Ayurveda from Art of Living, promoted by Sri Sri Ravishankar has a range of Ayurvedic medicines, toothpaste and shampoos, herbal drinks, energy drinks, could enter the market this year.
Amidst the competition, other companies also feel that the rise of Patanjali Ayurved could actually be the rise of an Herbal Phenomenon in India and they too can reap the benefits from what Patanjali Ayurved have sown. The herbal phenomenon could be the next big thing that could bring in a revolution in the market and the reactions seems to suggest the same. We saw Emami, recently acquiring Kesh King Brand (medical hair oil). Emami were also in race to acquire Indulekha Bringa hair oil along with HUL but ultimately bailed out. HUL who had previously made an exit from hair oil segment acquired Indulekha oil for a whooping ₹ 330 Crore, thus entering the segment. Dabur India too agrees on the low consumer awareness in the past about herbal products, which were also due to lack of credibility and poor labelling of products which are fast changing due to this Herbal revolution. Another, Himalaya Drug Company also feels it can reap benefits from this phenomenon as it could grow the herbal segment to new limits and expand the herbal market like never before. Herbal Industry is being taken seriously today than ever before and the companies have realized the importance of this consumer shift and have become swifter in chasing the consumer needs. Evaluating the magnitude of this shift so far, what coming up next is indeed a Phenomenon Herbal Revolution.
Patanjali Ayurved products are currently available with Patanjali shops (franchise shops) spread across the town. The magnitude shift in customers (using other regular products) it could gain could me a monstrous one if Patanjali products are available in supermarkets and retail shops like any other products.
These are the few products among many others available in the market for a regular buyer,