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Is the Patanjali phenomenon fading out?

In the past one year while competition has grown in strength, the Patanjali growth story has crumbled like a pack of cards.

twitter-logoAjita Shashidhar | June 15, 2018 | Updated 14:22 IST
Is the Patanjali phenomenon fading out?

Patanjali Ayurved's over 100% growth rate just about a year ago definitely made the Indian FMCG industry more competitive. It pushed the FMCG giants to pull up their socks and become more proactive. However, industry experts pointed out that Patanjali had to be more focused. Instead of carpet bombing the market by entering into every possible category, the advice was to select high growth and high margin segments and focus on them. Being present in so many categories could backfire in the long run.

And, by that time, the FMCG upstart was already straddling personal care, home care and even food. It was also talking about foraying into apparels with its brand, Patanjali Paridhan, and solar power.

In the past one year while competition has grown in strength, the Patanjali growth story has crumbled like a pack of cards. A senior manger of a modern retail company says that the demand for Patanjali products has dipped considerably, primarily because their products are not available. "Their store filling frequency is pathetic. When the consumer asks for the product and it's not available she obviously moves to other brands," he says. Offering products at 15%-20% lower than other brands will work only if the consumers see the products on the shop shelves. In addition to this, various quality concerns about its products has led consumers to shy away from Patanjali.

A key pillar of brand building is trust and transparency. There is a serious trust deficit as a large number of consumers are beginning to say that they are not sure about the quality of their products. The head honcho of Patanjali, Acharya Balkrishna had made tall claims that his company would be a Rs 20,000 crore entity by 2018.

This year surely hasn't been a great year for Patanjali so far. While the likes of HUL, ITC and Nestle registered double digit growth, 2017/18 fiscal was a year of no growth for Patanjali. To add to this, its new forays didn't create the desired impact. For example, its social media app Kimbho, supposed to be a rival to Facebook's Whatsapp, was withdrawn within a few days of launch due to security concerns. On the other hand, it is also at loggerheads with the UP government over the Rs 6,000 crore mega food park along the Yamuna Expressway. Also, the company's bid for debt-ridden Ruchi Soya is facing competition with Adani Wilmar entering the fray with a Rs 6,000 crore bid. Patanjali has now got time till June 16 to submit the revised bid.

In the midst of all this, Balkrishna has recently gone on record saying that he is all set to roll out his apparel business, Patanjali Paridhan. The company plans to open 100-odd Paridhan stores.

After giving stiff competition to FMCG companies, Patanjali is all set to challenge the apparel brands. But isn't it high time that the company adheres to industry advice of focusing on a few core categories and building them brick by brick rather than venturing into multiple categories? Its presence in multiple businesses definitely seems to be diluting its focus. The flat growth in the 2017/18 fiscal has rung the alarm bell for Patanjali.

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