Rise and rise of an empire

What started in 1997 as a small sized pharmacy, Patanjali Ayurveda Ltd. (PAL), today, is arguably among the fastest growing company in the Indian FMCG sector, a USD 50 Billion industry once dominated by multinational behemoths – the likes of Unilever, P&G, Nestle, Colgate – Palmolive, Johnson & Johnson. From shampoo and biscuits to ghee and noodles, and now apparel and footwear – no other indigenous company has built such a well-diversified product portfolio. It has grown more than ten times in revenue in last five years, an unparalleled feat in India’s FMCG industry. The company which grossed revenues of Rs. 10,000 crore for FY 2016-17 and targeting Rs. 20,000 -25,000 crore in FY 2018 has extensive sales channel of over 6000 distributors, 15,000 stores, and 100 mega-marts. Moreover, it has also tied up with retail chains like Future Group, Reliance Retail, Hyper City and Star Bazaar as well as leading e-commerce platforms. The recent announcements of Rs. 1,600 crore food park in Noida and Rs. 1,200 crore production facility in Assam as well as the buzz around Patanjali’s plans to go public signals the company’s robust expansion plan.

It is no surprise that American business magazine “Fast Company” ranked Baba Ramdev 27th in its list of “Most Creative Business People of 2016”, while his close associate and CEO of PAL Acharya Balkrishna has made his debut on the Forbes list of India’s 100 Richest People at 48th position; given the fact that he owns 94 per cent of the company.

IIFL Institutional Equities, for instance, in a recent report termed Patanjali a credible threat for consumer goods firms—not trying to beat others at their game but changing the game for them. It expects the company to clock revenues of Rs.20,000 crore by fiscal year 2020. These are big numbers and the firm’s growth trajectory is reported to be spreading nervousness in some boardrooms as well. It is also one of the biggest advertisers on Indian television.

The baba ramdev

phenomenon from moksha to market

Kaushik Deka

Rupa

Price : `295         

Pages : 184

The company is different from a typical business and the stated philosophy is to plough back profits into the company or to be used for social causes. The idea is to be present in as many categories as possible in order to give consumers more choices, and profits are to be reinvested in innovation and capacity expansion so pricing can be made more competitive.

Keeping all this in mind, one should find the book The Baba Ramdev Phenomenon an interesting read. Written by Kaushik Deka, the book offers a detailed account of Ramdev’s journey from attaining moksha in the Himalayas to ruling the market, especially the FMCG sector, with his Patanjali products. It captures the rise and rise of Patanjali and the various factors that worked for it, most importantly, the vision of Ramdev and the able assistance of his associate, Acharya Balkrishna. In a nutshell, if one wants to know about Baba Ramdev and his mystic journey of becoming a marketing guru, this book is for him.

The firm, in fact, has priced its product at a significant discount to others in a number of categories, which is helping drive sales. Patanjali is also said to be benefiting from a shift in consumer preferences towards herbal and ayurvedic products which are considered to be closer to nature. It has also positioned itself as a swadeshi brand, which has an appeal among a category of consumers.

 by Nilabh Krishna