How Patanjali has become one of the fastest growing Indian company …
A couple of days back I visited a Patanjali superstore in Pune. What I saw was just unbelievable. The quality of store and the arrangements with new Patanjali products was way better than any of the Big Bazars or Reliance retails(By the way reliance retail stinks).
The wow factor is the product range being offered by Patanjali. I never expected to see sunscreen lotions or Kajal, the Biscuits or choco cornflakes, the Chocolates. All these products which have been the strong hold of companies like Nestle, HUL have been copied in every way. By the way, this reminds me of famous quote “Good artists copy, great artists steal. Pablo Picasso”
What Samsung and Xeomi have done to Apple, which Apple did to Xerox etc .is a business debate which we are not going to discuss out here. But the scale at which Patanjali has copied everything and how it is giving them a big edge over MNC companies is incredible. They are aiming a sale of 10,000 Crore next year almost doubled from this year which makes them one of the fastest going companies in this space.
All these products like Biscuits, Chocolates, Beauty products etc . take years of research. From the taste to the packaging, to the color and how the product is marketed all are then sold as a single package. There are many months if not years of intangible hard work and then the products are launched in markets. Apple did 3-4 years of research on iPhone before it was finally launched. Samsung and Xeomi blatantly copied the design as android copy the IOS and became themselves multi-billion dollar companies.McDonald’s is 20 years old in India and it took them 2 decades of hard work to change Indian eating habits and now they are on verge of enjoying the fruits. On Mcdonalds, I will write in my next post.
Now when Patanjali has copied all this FMCG stuff they have saved million of dollars on research and development, Which gives them a big edge over the rivals. On the marketing front, they again don’t need to spend million dollars as Baba Ramdev himself is such a good marketing person. They don’t have to spend any big money on Shareholders interest, or on researching which product is to launch as they are in virgin territory.
Let’s take one example, If you see soaps the product is now almost penetrated into all homes and to increase the market size is very difficult task. So, only strategy companies can deploy is to increase their market share. Now between different soap brands like Dove, Lux, Moti, Pears, Cinthol etc. they all are fighting for market share and then Patanjali comes in the fight and starts stealing all the market share.Same is the case with Shampoos, Biscuits, Cornflakes, Oats etc.
Now India is a very conservative society, and saying anything against Yoga, Ayurveda is seen as derogatory. So people feel proud using Patanjali products. The subconscious is such that you can’t even talk forget about the debate on the quality aspect of all these products.I hope you remember Maggie quality case which was to give Patanjali an upper hand.
FMCG companies are now starring at a wall and don’t know how to climb it. On One hand there is already cut-throat competition with themselves with razor thin margins and on the other hand, there is Patanjali. Some of the companies like Dabur, HUL etc. have launched or are in process of launching their own Ayurveda lines but that is not going to suffice the purpose.The trust Patanjali has built with Indian consumers is not going to be shaken. Patanjali has turned its marketing campaign as ” Swadeshi Movement ” and Indians are loving it.
The FMCG companies are going to get hurt where it hurts most.Even if they are able to maintain the sales that would be miracle forget about the market share. Till the time BJP is there Patanjali is going to keep its upward march.
Until this time, I have only seen the small shops selling the Patanjali products then I saw the Big hyper malls like Big Bazaar to keeping their products. Now they have their own superstore what next? Yes, they are going to tie up with the e-commerce giant and this will lead to Pan-Indian reach.This is going to be a game changer for this company even though already they have changed the game.
All FMCG companies at one side like for oral health care- Colgate, For Maggie – Nestle for Chocolates – Cadbury, Biscuits – Britannia, Soaps, Shampoos – HUL and P&G and Patanjali at one side. What A game, And we believe Patanjali is going to dent all these companies
So we at Shikhar capital are very negative on FMCG companies like HUL, PitanajaliColgate,, PG g etc. Gilette could bePatanjali don’t have shaving products and Baba Ramdev cant Endorse it (LOL), but their Oral b brand will be severely affected. The sales and profit margins are going to be badly affected for all FMCG companies. So we believe in the upcoming bull market or Nifty march to 9600, FMCG will not participate. We could now just hope for Patanjali IPO .
All said and done, Patanjali has a vacancy for 8000 people with a median salary of Rs. 40,000 /- Per month. Now, this will be some good news for India and Modi government.
Some of the products which I Saw at Patanjali stores were