Case

Marketing at Patanjali South Asian Journal of

Business and Management Cases
Ayurved: Creating Value 9(1) 99–111, 2020
© 2019 Birla Institute of Management Technology
in a Herbal Way Reprints and permissions:
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DOI: 10.1177/2277977919881415
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Neeraj Pandey1 and Gaurav Paul1

Abstract
On 9 October 2018, Baba Ramdev announced that Patanjali Ayurved Limited (PAL) would become the
largest Fast-moving consumer goods (FMCG) organization in the world by 2025 (ET Bureau, 2018).
PAL had created high visibility and awareness about its brands among consumers using the herbal
and wellness positioning. The CAGR (compound annual growth rate) of 100 per cent since the last 4
years was an indicator of preference of herbal products by the consumers (Malviya & Bhushan, 2018).
However, the competitors were launching various herbal product ranges to counter PAL. Baba Ramdev
knew that consumer ‘trust’ in the brand building of herbal products was crucial. He was exploring
various options for keeping the present trust intact.

Keywords
Digital marketing, herbal products, pricing, trust, value creation

Introduction
Patanjali Ayurved Limited (PAL), led by Baba Ramdev and its chief executive officer (CEO) Acharya
Balakrishna, had established high brand value for its products in the Indian market. It is now looking
forward to the next phase of expansion. The competitors such as Hindustan Unilever Limited (HUL),
Procter & Gamble (P&G), Colgate–Palmolive, Godrej Consumer Products Limited (GCPL) and Dabur
India Limited were launching new herbal products to counter PAL products. Baba Ramdev was also
concerned about sustaining trust among the consumers for its various herbal product offerings.

Disclaimer: This case is written for classroom discussion and is not intended to illustrate either effective or ineffective handling
of an administrative situation, or to represent successful or unsuccessful managerial decision-making, or endorse the views of the
management. The views and opinions expressed in this case are those of the author(s) and do not necessarily reflect the official
policy or position of South Asian Journal of Business & Management Cases.

1
National Institute of Industrial Engineering (NITIE), Vihar Lake, Mumbai, India.

Corresponding author:
Neeraj Pandey, National Institute of Industrial Engineering (NITIE), Vihar Lake, Mumbai, Maharashtra 400087, India.
E-mails: npandey@nitie.ac.in; neerajpandey100@gmail.com
100 South Asian Journal of Business and Management Cases 9(1)

The Beginning
PAL started as a small pharmacy in Haridwar, a small town in the state of Uttarakhand, India, in the year
1997. Formally, it registered itself as Patanjali Ayurveda Kendra Private Limited in Nepal in 2006
(Patanjali Ayurveda, 2018). In the same year, it registered as a private limited company in India also,
with the name ‘Patanjali Ayurved Limited’. PAL sold over 800 products in more than 25 categories
(Anand, 2016). It had more than 28 factories with more than 20,000 franchisees spread across India. PAL
majorly focussed on herbal consumer items and wellness category products. It planned to keep expanding
its herbal portfolio across many more products such as dairy, health food drinks and baby care products
(Bureau, 2015).
PAL was present in almost all fast-moving consumer goods (FMCG) product lines (see Table 1). The
popularity of PAL brands was giving a tough time to companies such as HUL, P&G, Colgate–Palmolive,
Nestle, ITC, GCPL and Dabur India Limited. PAL even without any film or cricket celebrity endorsement
had been successful in attracting new customers. The sales in categories such as toothpaste, ghee
(clarified butter), hair oil, honey and ayurvedic medicines picked up fast. The larger FMCG companies
like Godrej Consumer Products Limited (GCPL) with 119 years of legacy and Dabur India Limited with
133 years of legacy had revenue of US$740 million (Moneycontrol, 2018) and US$1.2 billion (Dabur
India Limited, 2018) in fiscal year (FY) 2016–2017, respectively. PAL’s revenue in FY 2016–2017 was
U$1.54 billion (see Figure 1).

Table 1. PAL Verticals

Natural Healthcare Natural Food Ayurvedic Herbal Home Natural Patanjali
Products Products Medicine Care Personal Care Publication
Digestives Biscuits and Kwath Agarbatti Skin care MP3
Chyawanprash cookies Disease Dish wash bar Dental care VCD
Ghee Spices Packages Hawan samagri Hair care DVD
Health drinks Candy Vati Body care Books
Pot Herbal tea Bhasma Toiletries Audio CD
Health and wellness Jam Churna Eye care Audiocassette
Badam pak Murabba Guggul Shishu care
Honey Soan papdi Parpati/Ras Shaving cream
Fruit juice Natural sugar Pishti
Broken cereals Arishta
Dalia Asava
Gram flour Syrup
(Besan) Godhan Ark
Pickle Oil
Mustard oil Lep
Corn flakes Balm
Dal pulses Inhaler
Rice Tablets
Noodles
Oats
Papad
Namkeen
Bura
Source: https://www.patanjaliayurved.net/
Pandey and Paul 101

Figure 1. PAL Revenue Growth (in million USD)

Source: Develpoed by the authors based on data from http://www.business-standard.com/article/companies/baba-ramdev-s-
patanjali-aims-to-double-its-revenue-to-rs-10-000-cr-in-2016-17-116042700061_1.html

The company had its fair share of roller coaster ride. PAL adopted an unusual business journey. It
started with free public Yoga programmes. The registration for these programmes was open to all. With
the growing health consciousness and its pioneering effort of promulgating Yoga at the mass level, it
became an instant hit among the masses. Baba Ramdev strongly advocated giving up junk food and
highlighted adulteration in various food items. He promoted Swadeshi products (domestic homemade
products) under the banner of ‘Bharat Swabhiman’.

Patanjali Ayurved Limited and Baba Ramdev

The key person behind the growth of PAL was Baba Ramdev. He became famous for making Yoga
popular among common people. He left his home in childhood to study Sanskrit and scriptures. After
learning Sanskrit, Yoga and scriptures, he established Divya Yog Mandir Trust at Haridwar, Uttarakhand
in India in 1995 (Patanjali Yogpeeth—Divya Yog Mandir, 2018). Acharya Balkrishna, his close aide and
an expert in Ayurveda, was instrumental in setting up this trust along with Baba Ramdev and later PAL
in 2006 (see Figure 2). The popularity of Baba Ramdev increased exponentially in India and abroad after
Hindi spiritual TV channel ‘Aastha’ started telecasting his Yoga programme in early 2003. Each morning
audience around the world used to look forward to watching his Yoga speech and videos. His cult
following rose as success stories of health benefits of Yoga increased multifold. The society was
becoming more health conscious—thanks to the TV Channel programmes and increased interaction over
social media and Yoga had the answer to healthy living. The success stories about Yoga helping in
fighting against ailments in the media and society increased the conviction about its benefits among the
masses.
Baba Ramdev did not have any shareholding in PAL. The majority of shares (92.8%) of PAL were with
Acharya Balakrishna. The remaining 7.2 per cent were with non-resident Indian (NRI) couple Sarwan
Podar and Sunita Podar. The couple also donated 900-acre Island in Scotland to PAL to help it establish
International Yoga Centre (Joseph, 2011). Acharya Balakrishna was the Managing Director of PAL.
102 South Asian Journal of Business and Management Cases 9(1)

Baba Ramdev made Yoga popular among the masses. He started learning Sanskrit and Yoga since the age
of nine. He founded Divya Yog Mandir Trust at Haridwar, Uttarakhand in India in 1995 and later PAL in
2006 with Acharya Balkrishna. Although he had no formal shareholding in PAL, he is the most popular face
of the organization to customers, employees, media and masses.
Acharya Balakrishna is the Managing Director of PAL. In his early 40s, he worked closely with Baba
Ramdev to realize the vision of PAL. Attired in a traditional kurta and dhoti most of the time, he did not
take any salary from PAL. He looked after day-to-day functioning and decision-making at PAL.
Ram Bharat is the younger brother of Baba Ramdev. He is also a board representative at PAL. He
maintains a low profile in the media.

Figure 2. Key Persons at PAL

Source: Times of India, Mumbai Edition and The Economic Times, Mumbai Edition, compilation using multiple newspaper issues:
http://www.acharyakulam.org/Content.aspx?MID=MjA4Mw==
https://www.worldfoodindia.in/speaker/acharya-balkrishna-ji
http://www.adageindia.in/marketing/news/meet-ram-bharat-the-acting-ceo-of-patanjali-ayurved/articleshow/52143425.cms

Growth at Patanjali Ayurved Limited

PAL had built one of the world’s largest food parks near Haridwar. It had tied up with various organizations
for the supply of finished products and raw material. PAL collaborated with Future Group and Reliance
Fresh (modern retail chain) for deeper penetration and availability of its products. The company had a
distribution network of more than 4,000 distributors, 10,000 exclusive stores and 100 mega-marts (Dutta,
2016). Due to increased customer demand, leading stores like Spencer’s Retail, Big Bazaar, Reliance
Fresh, HyperCity, SRS Retail and a large number of Kirana (mom and pop) stores were stocking and
selling PAL products. The company also sold products through its own e-commerce site, viz. http://
www.patanjaliayurved.net/.

Fast-moving Consumer Goods Industry

Indian FMCG landscape was fiercely competitive with the presence of reputed global and domestic brands.
The FMCG industry grew at the rate of 12 per cent with annual revenue of US$49 billion in 2016 (IBEF
Report, 2016b). The food products dominated the FMCG category with 43 per cent, followed by personal
care (22%) and fabric care (12%) (Shine Report, 2018). Most of the growth in the Indian market was going
to come from rural areas, where penetration was significantly low. The rural FMCG industry was projected
to grow by compound annual growth rate (CAGR) of 18.1 per cent with a potential of US$100 billion
during 2015–2025 (IBEF Report, 2018). The Indian government initiatives such as National Rural
Employment Guarantee Scheme, Food Security Bill and Direct Benefit Transfer had also increased the
disposable income in rural areas. Companies were looking to increase their foothold in Tier I and II cities
with the help of expanding modern retail, which was expected to reach US$180 billion by the year 2020.
Traditionally, the Indian FMCG (fourth largest sector in Indian economy) industry is divided into
three core segments: food and beverages (18%), healthcare products (32%), and household and personal
care products (50%) (IBEF Report, 2016a). Hair care products were the leading segment, accounting for
23 per cent in terms of revenue. Food products were second with 18 per cent share followed by health
Pandey and Paul 103

Table 2. Best Sellers of PAL

Sl. No. Product Category Revenue (in Million USD)* (2015–2016)
1. Ghee 107.7
2. Shampoo and hair oil 50
3. Toothpaste 46.2
4. Herbal cosmetics 38.5
Source: Sl. No. 1 and 3 retrieved from http://timesofindia.indiatimes.com/business/india-business/-Patanjali-to-invest-Rs-1k-cr-
for-1-RD-6-processing-units/articleshow/52002824.cms
Sl. No. 2 retrieved from http://www.indiatvnews.com/news/india-top-5-patanjali-products-behind-company-s-massive-revenue-
growth-326163
Sl. No. 4 retrieved from http://www.livemint.com/Companies/pbMiVOlhFoLTcKaH4L92XP/Patanjali-beats-sector-slump-revenue-
more-than-doubles-Rel.html
Note: *1USD = `65.

supplements and Oral Care products, which had a 16 per cent market share each. Certain food products
such as packaged atta (wheat flour), biscuits and soft drinks were a billion-dollar category. The urban
segment had the largest consumer base (65%) in India with the rest (35%) being part of the rural segment.
Approximately half of the rural spending was on FMCG products. Organizations such as HUL, Dabur
and ITC had 30–45 per cent of their revenue through rural sales alone. Ghee, shampoo and hair oil,
toothpaste and herbal cosmetics were the leading sale categories of PAL (Table 2).

Pull Marketing with Umbrella Branding

PAL used a unique mix of marketing capabilities. It adopted non-conventional ways of launching
products into the market.

Product
PAL followed three philosophies when it introduced any product in the market. These included Swadeshi
(manufactured in India) products, Ayurvedic products (Herbal) (no chemicals, preservatives, etc.) and
products with value proposition around wellness and nutrition. This approach was entirely different as
compared to competitive brands. PAL leveraged this philosophy to win the trust of customers. Baba
Ramdev highlighting the all-Swadeshi philosophy mentioned:

Unlike big business groups, my advertising work is handled by Vermillion, an Indian advertising agency.
(Ohri, 2016a)

In all its advertisements, PAL consistently highlighted its herbal (non-chemical) content. PAL claimed
that the company’s products were superior in terms of wellness aspects compared to all other similar
products available in the market from competing brands.

Packaging
PAL had invested in modernizing the processes of quality control and packaging. The product packaging
had a barcode and a hologram similar to the products of its close competitors. However, it ensured that
the packages looked simple. It went well with their core philosophy of simplicity. Looking at the growth
104 South Asian Journal of Business and Management Cases 9(1)

of PAL and its related packaging requirements, the top packaging companies like Manjushree Technopack
had set up a packaging plant in Haridwar, the base location of PAL (Chatterjee, 2016).

Pricing
PAL claimed that its sole objective was to make quality products and make them available to the masses
at a reasonable price. Most of the products barring Ghee and hair oil were priced 10–30 per cent cheaper
than the closest competitor product. However, in certain categories due to increase in raw material cost
and a need for higher margin, PAL increased the prices. The price of a 100 g tube toothpaste has gone up
from `28 to `40, similarly for anti-dandruff shampoo prices had gone up from `85 to `95. Nonetheless,
products were still cheaper as compared to close competitors even after this increase (see Table 3). The
price differential itself acted as a strong reason to attract additional consumers, especially from the lower
income group to opt for its products, thereby increasing sales.

Promotion
FMCG companies formulated different branding strategies for different demographic regions. PAL
followed mass marketing approach. It sold all its products under one umbrella brand of ‘Patanjali’. Every

Table 3. Pricing at PAL (In INR)

HUL/P&G/
PAL Price ITC/Dabur/Himalaya Difference in
Sl. No. Product Quantity (with Source Link) Price (with Source Link) Price (%)
1. Honey 1 kg 260 380 46
(goo.gl/sM0BCH) (https://goo.gl/654dAU)
2. Anti-dandruff 200 ml 110 129 17
shampoo (https://goo.gl/c0i67G) (https://goo.gl/TYbUcu)
3. Toothpaste 150 g 75 101 35
(https://goo.gl/rtsWbc) (https://goo.gl/L2DN1r)
4. Bathing soap 75 g 13 30 131
(https://goo.gl/tHNXsI) (https://goo.gl/Up89U8)
5. Detergent soap 250 g 16 25 56
(https://goo.gl/px28Og) (https://goo.gl/sjkebC)
6. Biscuit 75 g 10 25 150
(https://goo.gl/Bt2MF0) (https://goo.gl/GmX0FE)
7. Noodles 70 g 15 40 167
(https://goo.gl/AaI1VT) (https://goo.gl/ieHbzJ)
8. Amla juice 1L 100 200 100
(https://goo.gl/3tlXZB) (https://goo.gl/8Qp8Cx)
9. Hair oil 210 ml 65 56* 14
(https://goo.gl/dpSVom) (https://goo.gl/9p2wyY)
10. Cow ghee 1L 560 482 14
(https://goo.gl/WhroXq) (https://goo.gl/Sp1CjA)
Source: Reference given within Table 3, column 5 in brackets, accessed on 30 August 2017.
Note: *175 g.
Pandey and Paul 105

product, whether a shampoo or an incense stick, carried the same brand. Traditionally, umbrella (single)
brand was not preferred by organizations as target customers were spread across various demographics,
and branding issues (if any) in one product line would have affected other product lines. Many companies,
therefore, considered umbrella branding a risky proposition.
The company invested a substantial portion of profit for charitable causes (Zarabi, 2015). PAL had
opened ‘University of Patanjali’ with a motto to reduce illiteracy and poverty in the country. PAL relied
heavily on word of mouth. Baba Ramdev demonstrated products to a large audience during his Yoga
sessions. Any coverage to Baba Ramdev or Acharya Balkrishna in the media added to the promotion of
‘Patanjali’ as a brand in the minds of the current and prospective customers. This model had worked well
for PAL as has been reflected in sales revenue growth over the years (see Figure 1).
PAL usually advertised multiple brands in a single advertisement (see Figure 3 and Figure 4). This
was in contrast to the FMCG industry trend where the company product advertisement focussed on a
single product only. PAL advertisement had captions like ‘Don’t risk the lives of your loved ones and
innocent kids by compromising on purity. Adopt 100 per cent pure and 100 per cent world class quality
Patanjali products only’. (The Times of India, 2017)

Figure 3. PAL Print Media Advertisement

Sources: Advertisement in The Times of India, Mumbai edition, 10 August 2017.
Advertisement in The Times of India, Mumbai edition, 27 February 2017.
106 South Asian Journal of Business and Management Cases 9(1)

Figure 4. PAL Digital Advertisement

Source: https://www.patanjaliayurved.net/

The tagline of each PAL advertisement was ‘PATANJALI—Prakriti ka Aashirwad (Blessing of

Nature)’. In 2016, PAL displayed 1.14 million advertisements, out of which 84 per cent of the slots were
Pandey and Paul 107

shown during news hour. Traditionally, FMCG companies advertised in entertainment and movie
category, hence it was a different promotion strategy by PAL. SK Tijarawala, the PAL spokesperson,
mentioned:

We don’t advertise; we run informative campaigns. We work on three basic principles set by Swami ji (Ramdev)—
world class quality, lowest price, and that all profits are to be given away to charity. Even in our campaigns, we
do not spend money on celebrities. Swamiji talks to consumers directly. Our entire advertising and marketing
spend is around a mere `300 crore (`3 billion). (Laghate, 2017)

Since mid-2017, PAL has initiated digital marketing campaign using search channels like Google and
display advertisements with Facebook.

Place
PAL started its operation by selling products through its franchise stores. Still, a large part of revenue
came from its exclusive distribution network, which includes Swadeshi Kendra (non-medicinal stores),
Patanjali Arogya Kendra (health and wellness centre) and Patanjali Chikitsalaya (clinic with Ayurvedic
medical practitioner). These retail outlets sold PAL products, medicines and allied products. The doctors
at Patanjali Chikitsalaya did not charge any consultation fee from the patients visiting them. However,
the herbal medicines prescribed by them were exclusively available at PAL retail outlet attached with
Patanjali Chikitsalaya. The doctors received a monthly salary of `20,000–`40,000 from the respective
retail franchise owner where a particular Patanjali Chikitsalaya was located.
The company had ramped up its distribution network. It had 15,000 exclusive outlets, out of which
5,000 were franchisee owned.1 The company planned to reach out to 0.01 million retail outlets in coming
years (India Franchise Blog, n.a.). PAL’s marketing and distribution network further strengthened after a
tie-up with Indian retail giant Future Group. This tie-up would lead to the sale of PAL products in 243
cities in India with an initial additional revenue of approximately `800 million per month (Mitra, 2015).
PAL was implementing technological solutions like systems, applications products (SAP) and other
enterprise resource planning (ERP) solutions to streamline supply chain management and customer
facing issues besides enhancing employee productivity. It had implemented digital payment system at all
its stores for all payments of more than `50 (approximately US$1) (Ohri, 2016b). PAL was about to
launch its official mobile app for facilitating customers to locate the nearest Patanjali retail outlet, finding
Patanjali Chikitsalaya and ordering Patanjali products online. These initiatives aimed at the seamless
interaction between PAL and its current and prospective customers.
Consumers associated PAL with Baba Ramdev, whom a large majority considered as a trusted leader,
spiritual guru and a preacher of healthy lifestyle. Building on this perception, the TV, newspaper and
digital advertisements given by PAL consistently highlighted superior quality, healthy and adulteration-
free herbal products. The herbal positioning with lower prices (15% to 30% below the competitors)
(Pinto, 2016) than competitor brands resonated well with the customers. It has helped PAL to position
itself as a reliable and trusted herbal brand in the minds of customers. The perceived value of its products
had also helped to attract repeat customers, which made a big portion of its sales.

Competitors’ Response
PAL with its herbal toothpaste brand ‘Dant Kanti’ (Dant Kanti, Dant Kanti Junior and Dant Kanti
Medicated) had made a dent in market leader Colgate toothpaste market share besides impacting sales of
108 South Asian Journal of Business and Management Cases 9(1)

other larger players such as HUL, P&G, ITC, Dabur, Godrej, Emami and Himalaya. Colgate sales growth
rate in the toothpaste category had decreased from 11 per cent in December 2013 to 1 per cent in December
2015.2 The Dant Kanti market share grew from 0 per cent to around 5 per cent in the same period (Malviya,
2017). By June 2017, the market share of Danti Kanti rose to 6.2 per cent market share, whereas Colgate
share came down from 55 per cent in 2015 to 52.7 per cent in June 2017 (Sharma, 2016).
The total toothpaste market in India was approximately `70 billion (US$1.08 billion) (Moneylife
Digital Team, 2016). In August 2016, Colgate launched Cibaca Vedshakti toothpaste as an India-centric
brand to counter the impact of Dant Kanti. Colgate planned to leverage its reach of 5 million outlets as
compared to PAL’s penetration into only 0.2 million outlets in India. As a reaction, the Baba Ramdev
official twitter handle posted:

Colgate used to warn against traditional Indian ways of using salt and coal on teeth. But now, it actively endorses
it. (BT Online, 2016)

Almost 45 per cent and 9 per cent of HUL and Dabur products, respectively, were affected by the high
growth rate of PAL products. HUL was reviving its herbal brand ‘Ayush’ besides the acquisition of
famous herbal hair oil brand ‘Indulekha’ from Masons group. HUL planned to launch about twenty
herbal products in categories such as shampoo, skin cream, toothpaste and soaps under the brand
umbrella of Ayush. Dabur started an e-store named ‘LiveVeda’ exclusively for selling its wellness, herbal
and healthcare-related products. The LiveVeda portal also provided free health consultation. Dabur also
planned to start a call centre, on the lines of Alibaba’a Alihealth, to advise its prospective customers on
health and herbal products (Bailay & Bhushan, 2017).
Emami acquired a famous hair oil brand Kesh King. It was also in the race for the acquisition of
‘Indulekha’ before HUL acquired it. Godrej Consumer Goods launched many herbal products such as
neem-based mosquito coil, coconut oil-based hair colour and organic soaps. Dabur had also understood
the pulse of the market and introduced new herbal products besides aggressively promoting its honey
and Chyawanprash.

Price as A Key Differentiator

PAL employed multiple strategies to contain cost because the company wanted to penetrate the highly
saturated market with stiff competition. Low manpower cost, subsidized food park, land, tax benefits,
negligible expenditure on celebrity endorsement and procurement from local farmers had kept the
operational cost low. However, given the growth and product portfolio, the company would need huge
manufacturing and supply chain investment to meet its demand. Currently, the demand for many of the
PAL herbal products outstrips the supply.
PAL pricing became a pivot for the industry (see Table 3). The entry of PAL was at a time when
consumers were facing crises of adulteration, poor quality, high price and non-organic ingredients.
Traditionally, herbal product companies did marginal business as compared to bigger non-organic
companies. However, the trust of herbal products and affordability created a new disruption in the market
that hampered the growth of established players in the FMCG industry. The pricing communication from
PAL aimed at communicating its philosophy to consumer’s minds. The message claimed that MNCs
artificially made prices higher to reap extraordinary profits.
Pandey and Paul 109

The Road Ahead

There was turbulence in the FMCG industry due to the price points with which PAL had launched its
herbal products. Baba Ramdev and team had the challenging task of consistently creating and sustaining
value for its customers. How long would the current value proposition of ‘swadeshi, herbal, wellness and
nutrition’ last? Would the current pricing and digital marketing strategy of PAL targeted at the youth help
it to achieve its revenue target of US$3 billion by the end of FY 2017–2018 (Wadhwa, 2017)?
There was a distinct shift in consumer preferences towards herbal products. This shift had forced the
organization to invest more in herbal products. Colgate, Nestle, Dabur, Emami, Himalaya and HUL were
reworking their strategies and expanding their product portfolios with herbal ingredients to meet Baba
Ramdev’s home-grown challenge. In the race to grab market share, HUL, the largest FMCG firm in
India, which had revived its Ayush brand last year, had created, with herbal ingredients, a range of
products such as hair care, skin care, oral care and personal wash (soaps) in collaboration with Arya
Vaidya Pharmacy. HUL was also trying to add some novelty to its products. For example, Ayush freshness
gel, Ayush cardamom toothpaste had cardamom (elaichi), which eliminated bad odour and gave fresh
breath, Ayush natural fairness saffron soap had saffron (kesar), which is known for its healing properties
and Ayush anti-dandruff fenugreek shampoo had fenugreek (methi) that has medicinal properties.
American oral care giant Colgate has been pushing aggressively in the market its Colgate Neem Active
Salt toothpaste, which contained traditional Indian teeth cleansers neem and salt, to take on Dant Kanti.
Among the players in the FMCG market, two strategies were quite popular. One, the established players
were now taking Ayurveda seriously, choosing to take on Baba Ramdev’s FMCG enterprise head-on.
Two, multinational corporations, which normally liked to keep their portfolio as international as possible,
have realized that it might not be the right strategy: to beat Baba Ramdev, you have to be like him.
However, historically all the green and herbal products had ‘trust’ issues, which had a direct impact on
sales. The public perception of the organization, its promoters and its product also had a direct impact
on the ‘trust’ factor. How Baba Ramdev and his team are going to sustain customer ‘trust’ for its herbal
products, given the competitors were also planning to launch similar herbal products in the market, would
be interesting to witness in the near future.

Post March 2018

Baba Ramdev, the yoga guru-turned-businessman, had on 4 May 2017 said that Patanjali would continue to
“double revenue every year” to cross Rs20,000 crore in the year ended March 2018 and subsequently would
cross the annual revenue of India’s largest packaged goods company Hindustan Unilever Ltd by 31 March 2019.
(Mitra, 2018)

PAL’s blistering pace of growth over the past few years, which had left rival packaged goods companies
terrified and had sent them to their drawing boards for devising strategies to defend their turf, got stalled,
with Baba Ramdev’s company saying sales had changed marginally in the year that ended on 31 March
2018.
‘We have closed the year 2017–18 around the same level as the previous fiscal year’s revenue,’ Acharya
Balkrishna, managing director of Patanjali, said in an interview (Mitra, 2018). During the same period,
HUL domestic consumer business grew by 12 per cent, ITC (non-cigarette FMCG) expanded by 11.3 per
cent, Nestle’s growth was 10.5 per cent and Dabur India showed growth of 8.3 per cent.
110 South Asian Journal of Business and Management Cases 9(1)

The growth slide from more than 100 per cent to nearly zero can mean the slowing down of Patanjali.
But, Acharya Balkrishna attributed it to lingering effects of the demonetization and the implementation
of the goods and services tax (GST). He said the company invested its energy in developing infrastructure
and supply chain during the year. It focussed on system development, and not just revenue growth.
Patanjali could be burning out from the scorching growth it has registered over the past few years.
Some analysts opine that Patanjali is approaching the limit of its long growth expansion. They attribute
the slowdown in sales growth to rivals catching up with competing products and Patanjali’s inability to
handle the expansion. According to them GST and demonetization affected all packaged goods companies.
Besides, the company’s distribution and supply chain was not robust and efficient enough to handle
the quick rise in volume. It expanded too fast. In addition, there has not been much innovation. The
company cannot keep growing beyond a point riding on just brand Ramdev.

Notes
1. Based on interview with doctors at Patanjali Chikitsalaya.
2. See,  http://www.phillipcapital.in/Admin/Research/717013949PC_-_Colgate_Co_Update_-_Mar_2016_
20160315111243.pdf

References
Anand, G. (2016, April 2). How Amla, yoga and a 12-hour routine helped Baba Ramdev build an ayurveda empire.
Retrieved from https://navbharattimes.indiatimes.com/business/business-news/how-amla-yoga-and-a-12-hour-
routine-helped-baba-ramdev-build-an-ayurveda-empire/articleshow/51662544.cms
Bailay, R., & Bhushan, R. (2017, April 18). Dabur plans call centre for Ayurveda. The Economic Times. Retrieved
from  http://retail.economictimes.indiatimes.com/news/food-entertainment/personal-care-pet-supplies-liquor/
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