MUMBAI // An Indian company set up by a popular but controversial yoga guru and selling a wide variety of consumer products ranging from toothpaste to noodles, is giving multinationals a run for their money.
Patanjali Ayurved, founded by the saffron-robed television celebrity and spiritual guru Baba Ramdev, has become one of India’s fastest growing consumer goods companies.
“The rise of Patanjali has been nothing short of meteoric, posing a challenge to the companies that have dominated the consumer scene for years,” according to a report published this month by HSBC.
It says the company is “disrupting the consumer space” and consequently it has cut its target stock prices for companies including Nestlé India, a subsidiary of the Swiss food multinational.
“Some of the stocks considered to be most vulnerable, such as Colgate, Britannia, and Dabur, have already corrected,” it adds.
The brand’s products are based on Ayurveda, an Indian herbal medicine system and the name Patanjali comes from a yogic sage. The private company is based in Haridwar, in north India, considered a holy place by Hindus. Its facilities include an organic farm where it grows ingredients for its products. Patanjali Ayurved was launched in 2006, and among its range of hundreds of types of products, it offers ghee, pickles, juices, dal, haircare products and herbal medicines.
“We expect Patanjali to have revenues of 50 billion Indian rupees [Dh2.68bn] in 2016, up 150 per cent year on year,” says HSBC.
Vimal Kedia, the managing director of Manjushree Technopack, an Indian firm that is in talks with Patanjali for packaging its products, agrees the growth of Patanjali has been phenomenal. He says he expects the company to continue expanding at rapid pace over the coming years.
“Baba Ramdev has a very strong following throughout the country for more than 15 years now, due to his TV programme on yoga and live shows throughout the country,” says Mr Kedia.
“Of late, Ayurveda and homoeopathic medicines and products are catching on once again because people are scared of the news there are side-effects and problems from regular products.
“Whatever Baba Ramdev claims, people believe it. Stores have a separate shelf for his products and people are buying them. His brand is strong and he has positioned his products almost 20 to 25 per cent cheaper than the other fast moving consumer goods products.”
Major consumer companies are positioning themselves to compete with Patanjali. Hindustan Unilever, which is owned by the British-Dutch multinational Unilever and sells brands including Dove, has launched its own range of Ayurvedic personal care products, including shampoo and skincare creams under its Lever Ayush Therapy brand.
Sanjay Chakraborty, a marketing communication adviser based in Ahmedabad in Gujarat, says Patanjali has done a good job of spotting a gap and managing to appeal to Indian tastes.
“Baba Ramdev and his brand Patanjali have become synonymous to each other,” Mr Chakraborty says. “It is an interesting example of leveraging a successful personal brand and connecting with the audience. Since Baba Ramdev has a great following and can be described as a cult brand, so can his brand Patanjali.” He adds that Patanjali’s popularity has been bolstered by a high frequency of its adverts in various media.
“The campaigns have been carefully crafted to project a premium image but available at a economical price bracket,” Mr Chakraborty says.
“Patanjali, a truly 100 per cent Indian product for the country, attacking MNC’s expansion plans, has understood the opportunity. Patanjali in today’s marketing world is a successful case study with the right element of marketing mixed with the utmost understanding of the Indian consumer.”
Neeta Jain, a teacher in Mumbai, says she recently started using a few Patanjali products and now regularly buys the company’s ghee, bathing soap and washing -up liquid.
“I like them,” she says. “The ghee is supposed to be good and they are cheaper than the multinationals.”