The Patanjali Story

What other FMCG companies can learn from their growth…

Baba Ramdev’s Patanjali has clocked fabulous sales of Rs.10,000 crore for the full year 2016-17. This makes Patanjali the third largest FMCG Company in India after Hindustan Unilever and ITC. From sales of Rs.450 crore in 2011, the company has grown to Rs.10,000 crore in 2017; nearly 20-fold. Going by that trend, the company’s projection to touch Rs.20,000 crore sales by next year does not seem entirely impractical. So, what are the lessons that other FMCG companies can learn from Patanjali…

Pricing with Quality is the key… 

One of the basic driving business logic for Patanjali has been pricing. In fact, if you take any of the Patanjali FMCG products and compare with other FMCG products, Patanjali is substantially cheaper. In a market that is still driven by the “Value for Money” principle, Patanjali has found the perfect positioning in the minds of the Indian customer. Of course, the feedback is that quality is also of a high order.

In sync with Indian values… 

One of the key advantages of Patanjali is its identification with traditional Indian values. For example attributes like purity, absence of harmful chemicals, and use of natural flavors are normally at the core of the Indian consumer’s value system. That is precisely the customer mindset that Patanjali has attacked and also managed to deliver.

Distribution is the key…

Probably, no other FMCG company in India has the kind of marketing investments and distribution presence as Patanjali has. Apart from distributing through aggregators, Patanjali has also set up its own dedicated distribution network across the length and breadth of India. This ensures that wherever you are in India, you will never be too far away from a Patanjali products outlet. The company has also focused heavily on rural and semi-urban areas where price continues to be a predominant factor in buying decisions. With its earthier image and more granular marketing and distribution module, Patanjali has effectively captured a big chunk of the incremental spending in the rural and semi-urban areas.

Understand Indian ethos…

In a nutshell, what Patanjali has displayed is that they have much sharper insights into the Indian ethos. The overall shift in India is towards more traditional approaches and the timing of the big push for Patanjali was also perfect. They also understood that if you deliver value consistently at a low price, then existing brands and brand strength does not really matter in India. We have seen products like Good Night mosquito repellants and shampoo sachets take Indian markets by storm. They had no brand or pedigree to fall back on. Just an idea that worked! ©

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