fbpx

What Made Patanjali The Indian FMCG King?

After Patanjali Ayurved Limited was registered in January 2006, it was prominently known for its Ayurvedic Medicines. PAL set up multiple medical clinics across the nation, under the name of Divya Chikitsalaya that provided free diagnosis to people They were set up as a way to help poor people gain access to better health services. 

They also provided Ayurvedic medicines through the Divya Pharmacy outlets. After providing their services in the Ayurvedic Medicines niche for around 6 years, in the year 2012, Baba Ramdev & Acharya Balkrishna extended Patanjali Ayurved Limited into Indian Mainstream Retail Sector. 

Divya Pharmacy’s medicines were already a hit among the consumers & with their entry into the retail sector, the duo launched a number of different grocery products into the market. Starting with common household ayurvedic products Patanjali soon launched all sorts of small & big daily use items. And the result today is that Patanjali’s mega marts available across the nation are sufficient in providing all the essentials one might find in a supermarket along with their products available in retail stores. But this was no easy feat to accomplish.

Ever since its establishment, Patanjali has been known for its astonishing growth rate. The company has established itself as a major company with a 10,000 cr + annual turnover in around a decade presently giving a tough competition to the giants of the industry including Hindustan Unilever Limited (HUL).

patanjali success story

Patanjali’s revenue had been multiplying over the years after their entry in the FMCG sector. The company that had generated a revenue of 453 crores in the year 2012; by the year 2016, generated annual revenue of around 5000 crore, which is an unparalleled growth for any company becoming the fastest growing Indian FMCG company to date.

Moreover, by the year 2017, the companies revenue doubled to 10,361 crores, which was a 111% growth. But the continuing growth came to a halt in the FY 2018, when their revenue dropped to around 5000 Crores. The reason for this is suspected to be the recent GST & Demonetization affecting Patanjali’s revenue.

A Wide Range Of Products

Starting with Divya Pharmacy that only sold Ayurvedic medicines to the people at affordable prices, Patanjali has now become a leading FMCG company that provides a large number of products in all possible categories. From daily needs to cosmetics, Patanjali sells everything. The product niche of Patanjali can be divided into the following categories:

1. Natural Health Care

This category mainly contains products like digestives, health & wellness products, diet food and Health drinks & beverages. Patanjali’s Cow’s ghee, which is estimated to have generated revenue of 1308 cr. Rupees in the Financial Year 2015-16, belongs to this category.

2. Natural Food Products

This category includes a wide range of food products, extending from biscuits, jams & noodles to spices & pulses, a number of products come under this section. This is a rather important sector of products for PAL since people trust Patanjali for being herbal & chemical-free. 

3. Ayurvedic Medicines

This category has been the USP for Patanjali, making them, the kings they are today. The company owes a big share of their sales profit to the ayurvedic medicines category. Before entering the FMCG sector, Patanjali had been selling Ayurvedic Medicines under the name of Divya Pharmaceuticals. These medicines, being effective to consumers have been a good enough reason for Patanjali’s rise today.

4. Herbal Home Care

This category of products includes products required for Pooja regularly. Not just Agarbatties & Dhoopbatties, but instead Patanjali provides a whole range of Pooja essentials including Hawan Samagri, Camphor, cotton wicks & even air fresheners. As usual, Patanjali boasts that their Home care products are natural & thus completely harmless to everyone.

5. Natural Personal Care

Another category of Patanjali Products includes Personal healthcare products & toiletries. This category includes all sorts of daily use items from body care products to dish wash & other cleaning products too, which are claimed to have the goodness of natural ingredients in them making them more effective than their Chemical Counterparts.

Though these are the only categories of products mentioned in Patanjali Ayurved’s website, the company has recently started dabbling in other product sectors too. 

Patanjali Paridhan:

patanjali success strategy

Patanjali Paridhan is Patanjali’s brand working in the apparel sector. Patanjali Paridhan is an exclusive apparel brand with over 3000 products under three sub brands, viz.  a womenswear brand Aastha, Unisex sportswear brand Livfit and a menswear brand Sanskar. Though these products are only being sold at the Patanjali Paridhan stores at New Delhi, Meerut, Aurangabad, Haridwar and Berhampur, Patanjali is targeting to soon open stores in every major city of the country. It is also expected that these products will soon be available on e-commerce sites like Amazon, Flipkart & PayTm mall.

patanjali success strategy

Patanjali’s Strategies That Helped Them Thrive Overtime:

The fastest growing Indian FMCG company till date, Patanjali has astonished everyone with its unparalleled growth over the years. It is one of the most successful FMCG companies in the Indian market & the company owes its success to multiple factors that have helped the company flourish over time. 

patanjali success case study

1. The Face Of Patanjali

patanjali success case study

One notable fact about Patanjali is that unlike most companies, they have never completely depended upon celebrity endorsers to endorse their products, but rather made Baba Ramdev the face of the company. The company has always vastly benefitted from Baba Ramdev’s following. 

Being a yoga guru, Baba Ramdev has already led many people to pursue a healthier life through his yoga camps and the initial consumers of Patanjali were his followers that not only worked as consumers but also helped market the brand through their positive reviews of the brand. Through his speeches & whenever speaking on stage, Baba Ramdev has always talked not just about Yoga or its benefits, but rather India & its culture in general. 

 

He has been known to shun MNCs for looting India with their products & advised people to boycott their products. He has always encouraged people to buy as much ‘Swadeshi’ or products made in India to avoid filling the pockets of foreign companies. His speeches have also always reflected a sense of patriotism in them that has encouraged in people a sense of love for their motherland. These are the things that Patanjali has used to market their products positively among the people of the nation. 

patanjali key to success

2. Branding Of Products

patanjali key to success

Every aspect of Patanjali products tells the story of its being natural & thus better than its counterparts. The brand has very cleverly worked on each & every aspect of their brand to make themselves stand out amidst the competitors. 

Consider the brand name & logo, for example; the name ‘Patanjali’ comes from the name of a 2nd-century scholar, who is considered as the Father of Yoga. Not just that, but their logo represents their name with a green & a saffron line below, invoking a sense of patriotism in the people. 

In fact, the logo of Divya yogapeeth is quite interesting as well, as it invokes a sense of Hinduism, as represented by the Om sign, while at the same time advocating herbal & Yoga.

reasons for patanjali success

3. Market Research & Satisfying Demands

Patanjali has an applaudable Market research team that works endlessly towards providing customers with the products they need. Patanjali has been known to keep customer needs above all & launch products catering the same. Now, what makes them stand out against their competitors is that they understand their customers better.

Baba Ramdev & his team interact with their audience on a large scale, using various media, including his yoga sessions, health care services, dispensaries & executives working to serve this purpose. These interactions helps them understand what their customers need & then cater products that could serve those needs. 

Good examples of this have been products like their Bottle gourd Juice & Aloe vera juice, that are not essentially a medicine, but rather daily wellness products that the customers can rely on to lead a healthy life. Now, the reason we mention this here is that it is products like these, that had helped Patanjali takeover the FMCG sector completely. The reason for this being that their rivals were not ready to give them enough competition, owing to the requirement they created & the lower prices at which they offered their products.

4. Market Segmentation & Management

A big reason for Patanjali being so popular among the masses is that through their marketing approaches they have also targeted all sections of the society & people of all ages. They broke the common misconception of “Ayurvedic is for Elderly” & made it cool enough to be adopted by the young & the old all the same. From their Gooseberry candies, chocolates, noodles & other similar products, they have been trying hard to become a favourite among the kids & the generation Z. Not just that but the cosmetic & body care products too are quite effective & thus loved by young adults.

The price & packaging of the products has also been done keeping in mind the needs of all sections of society. Where even though they have daily use products at cheaper rates so that even people from lower classes can afford them, they also have products that target the higher economic classes of the society.

Now to cater to this increased need in society, they also need to manage the Supply chain systems, which they do very well, owing to their 10000+ outlets throughout the nation. Moreover, now their products are also available at the non-Patanjali retail stores, helping them manage the demand-supply chain easily.

5. Controversies

Like any other brand growing in the industry, Patanjali too has faced challenges & controversies overtime. The fastidious growth of the brand & their huge investments has raised many eyebrows over time. The major question rises on their sources of investments, as many industry heads point out that the investment cycle of Patanjali is shrouded by a lot of mystery. 

But to answer this Acharya Balkrishna has always responded by saying that they receive a lot of money in charity & owing to their stupendous growth, banks are more than willing to offer them loans. He even says that he has no issues in giving anyone reports of all the money they get & how they spend it as both these Yog Gurus, do not spend a penny on their luxuries, but rather lead very simple lives in their Ashrama.

What gives more air to these blames is the fact that recently the Madhya Pradesh Government & Maharashtra BJP government has sold pieces of lands to Patanjali in Indore & on outskirts of Nagpur at dirt-cheap prices, when the actual cost of these lands was too expensive. 

 

6. Future Aspiration

Patanjali’s growth story has been quite unbelievable over the years, with them fulfilling their goals a little too soon than was expected. But steering into the future, the company has some big plans in mind. Baba Ramdev has even expressed his hopes to overcome the FMCG Giant HUL’s revenue of 34,487 crores by the end of the Fiscal year 2019. 

But these hopes are not based on a cock & bull story since the company realizes that as hard as the initial leap of success was, the road ahead remains rockier still. Acharya Balkrishna says that they need to better plan the supply-chain marketing & distribution of products. Their first step towards doing this has been setting up multiple manufacturing units across the nation at Tezpur, Indore, Nagpur, Noida and Vizianagaram. These units exclude the 30 other manufacturing units established for manufacturing Atta & oils. 

But the company still sees the best. As they have often mentioned, that Patanjali does not work for profit, but rather for the sake of providing the people of the nation better services, helping solve some of the problems of the society.

swot analysis infographic of patanjali

Swot Analysis

Started only a decade back, Patanjali has already become the third largest FMCG company in India. Considering all that they have done over time, here’s a small SWOT analysis of Patanjali. 

Strengths

  • Innovative & Harmless Products – Being Natural, Patanjali’s products are mostly harmless, thus generating more demand for them. Also, they have a history of creating innovative products to fulfil customer needs.
  • Strong Distribution Network – Patanjali has a large distribution network in the country, covering not just the Urban, but also the rural areas of the nation, helping them cater to a larger group of people.
  • Image Of Trust – Owing to the social image of Baba Ramdev & Acharya Balkrishna, Patanjali has a solid image of trust in the eyes of its consumers. This image goes a long way in profiting the company serve people better.
  • Social Responsibility – From free Chikitsalayas to Hospitals & other social works that Baba Ramdev & Acharya Balkrishna have been doing over the years, helps create a better image of Patanjali in the eyes of its consumers, further helping them do better.
  • Make in India & Swadeshi Initiatives – The company has always been promoting the use of Desi products. This has been a major part of their marketing strategy & it has been fruitful for them too. The icing on the cake has been their cheaper products, further empowering these initiatives.

Weaknesses

    • Concentration in North & West India – Patanjali’s outlets are mostly concentrated in Northern & Western India. Since Patanjali’s products are highly preferred throughout the nation, the lesser number of outlets throughout the eastern & southern India can prove harmful to the company as they are almost leaving half of the country untouched. If the company can tackle the problem & provide more products there, they can untap larger opportunities in the future.
    • Less Promotions – Though this looks like a benefit today, low promotions will cause harm to the company’s Marketing in the long run. It’s high time that Patanjali starts considering increasing their promotional activities.
    • Easy Availability of Substitutes – This is not new, as many new companies face the problem of fakes of their product in the market. These fakes are though not effective, often cheaper than the original products, thus harming the brand’s revenue.
    • No Clinical Approval – Being all Ayurvedic, Patanjali Products do not have the ‘Clinically Approved’ label on them, since they are tested only in their personal labs. This can cause the downfall of the company later, if any rival gave too much air to it.

 

Opportunities

  • An inclination to Herbal & Natural – Owing to the harmless products, people are relying more on Natural & herbal products these days. This opens a large avenue of opportunities for Patanjali to work on.
  • Untapped Markets – Even though Patanjali distributes to a large section of India, it still has a lot of untapped markets to capture. This mostly includes the rural markets & the domestic markets in the Southern & Eastern India,
  • Changing Lifestyles – The hectic lifestyles these days, compels people to work harder at keeping themselves fit & there’s no better way to do it than with natural products. ANd Patanjali can make use of this fact to expand even further.
  • Export Potential  – Baba Ramdev has a large popularity outside India too & Patanjali can use it to expand their market internationally by exporting more products with time. This will help them explore more untapped resources of revenue.

Threats

  • Products in Controversy – The fact that some Patanjali Products are facing controversy, can create a sense of mistrust in them. This can disrupt the initial strong image of the company.
  • The threat of International Competition – As the brand will flourish & go international, they will face Competition from larger, multinational brands. To compete with them, they will have to have a better & stronger strategy at hand.
  • Political Indulgence – Baba Ramdev is often seen on many political platforms, giving speeches. Though not actively involved in Politics, this indirect indulgence can also affect Patanjali. One wrong or controversial statement can hamper the image & reputation of the brand.

Conclusion

Patanjali as a brand has generated quite a ripple in the FMCG sector, right from its very start. Each of their steps has been very cleverly strategized to bring the best to the brand. Every effort made by the company in the last decade has brought to them only benefits. Even though facing a few obstacles along the way, the company is standing tall as ever, being the fastest growing company in the Indian FMCG sector. 

Headed by two hermits, with no degrees in Business or Marketing, Patanjali is expected to go a long way in the future, only if it manages to keep its head above water, as the road ahead will be tougher than before.

Scroll to Top