My first impression of Ramdev
Baba was quite impressive. I was 35 years old, running at the top of my career
and also earning quite well. But I was also afflicted with hypertension, high
blood pressure, cholesterol, triglycerides, thyroid, indigestion, insomnia,
hairfall and what not. Every doctor I went to gave me pills which had to be
taken for the rest of my life. I was waking up in the morning and taking five pills
and then I was taking another five pills before going to bed at night. And I
would inevitably wake up in the middle of the night with palpitation and
nervous breakdowns making me go nuts. Sometimes I felt I would not live long.
Sometimes I felt I should kill myself to get rid of all the pain. In sheer
desperation, I enrolled myself in a Ramdev Baba Yoga Shivir to learn the secret
of healthy living.
And frankly speaking, I was not
disappointed. What the half-naked sadhu was telling from the podium was sheer
music to my ears. Breathe in and breathe out and take control of your metabolic
system. Go into deep meditation and control your mind. Avoid junk food. Come
closer to nature. Go green. Of course, his discourses also held veiled threat
against the multinationals who, he alleged, were polluting the mind and body of
the gullible customers with highly advertised and thoroughly publicized harmful
carcinogens. I did start implementing some of his teachings. Although I still
take the pills, I have to admit that my body, mind and lifestyle have become
much healthier than before.
And this week, I happened to
chance upon three cover stories done on Baba Ramdev by The Economic Times,
Business Today and Outlook. The Economic Times story ‘Desi Hustle vs MNC Muscle’ focused on how Hindustan Unilever and
Baba Ramdev’s Patanjali were battling to gain chunks of the rapidly growing Ayurvedic
and herbal FMCG pie. The Business Today story titled ‘Baba of All Trades’ detailed on how the Sanyasi was building up an
FMCG empire and launching Atta noodles to take on the might of Nestle and other
MNC giants. The Outlook story titled ‘Brand
Baba’ was on how the Ramdev Baba backed ‘Patanjali’ brand has seen a
meteoric rise in very little time.
The facts and figures dished out
in all the three articles were quite astonishing. Although the brand ‘Patanjali’ is associated
with Baba Ramdev, he does not own a single share in the company. His associate
Acharya Balkrishna owns over 93 percent in Patanjali Ayurved, and his disciples
and investors hold the rest. In turn, Patanjali owns 90 percent share in
Aastha, the satellite cable television channel that catapulted Baba Ramdev into
a celebrity Yoga teacher.
The turnover of Patanjali has now
touched ₹2,000 Crore with
diverse offerings like food (ghee, biscuits, pineapple juice, honey, corn
flakes and noodles), cosmetics (face wash, bathing soap and anti-dandruff
shampoo), household products (detergent powder, dish wash bar and floor
cleaner) and Ayurvedic medicines (nutrients and cures for diabetes,
hypertension, cancer and hepatitis). The
company is recording a staggering 150 percent year-on-year growth in turnover
and is slated to touch ₹5,000
Crore mark in 2016.
Now, let us take a quick look at
his desi competitors and foreign MNCs. The biggest player, Hindustan Unilever, is
expected to touch ₹35,000 Crore
in total revenues this fiscal year. HUL owns an Ayurvedic personal care product
line called Ayush. The other major players in the market are Dabur, Emami,
Himalaya and Forest Essentials. The multinational companies that he is
competing against are Proctor & Gamble(P&G), GlaxoSmithKline(GSK) and
Johnson & Johnson(J&J). The total size of the FMCG market in India is
estimated to be close to $50 billion.
In the case of noodles, it’s a no
holds barred contest between Nestle owned Maggi and Baba Ramdev promoted Atta
Noodles. The total size of India’s noodles market is estimated to be ₹5,300 Crore. With Maggi taking a
sudden hit and forced to withdraw from India because of the Monosodium
Glutamate(MSG) controversy, there was a huge void that was waiting to be filled
up. Maggi was a Mother’s delight (Mummy bhookh
lagi /Bas do minute), Bachelor’s delight (Kuch nahin to Maggi bana lena) and a fast food restaurant owner’s
delight. But deep down in their hearts, everyone knew Maggi was harmful to
health. And Ramdev Baba stepped in with his healthy proposition of Atta
Noodles. The Atta Noodle from Patanjali is made from wheat, while the
tastemaker is made with rice bran oil, fresh peas, beans and carrots sourced
from Uttarakhand farmers. The price has been kept at a competitive ₹15/- a packet while competitors sell
at ₹25/- a packet.
How did Ramdev Baba’s Patanjali
suddenly come out of the blue and snatch away a major market share from the
competitors? Well, it is an interesting story, told in a compelling manner in
those front page articles. Everything about Patanjali has been unique, and the
organization has been reaping rich dividends because of their innovative
styles.
The operating strategy of
Patanjali is something that needs to be taken into reckoning. . Most of the key
employees of this organization take no salaries. The rest of the employees also
paid very modest compensation. They put in long hours in the organization
without any complaints or grumblings, just out of love and adoration for their
Guru. The Baba also has a succession planning in place --- he is preparing 500
Sadhus to run the venture in future days --- building a corporate structure
with a spiritual culture. The administrative and manpower cost is barely two
percent of revenue, in comparison to MNCs who spend more than 10 percent on the
same.
The brand ambassador of Patanjali
is of course, the Baba himself. He travels 200,000 km a year, mostly conducting
Yoga Shivirs. Through these Shivirs, he reaches out to a potential mass of 200
million people, many of whom are also loyal customers of the Patanjali
products. The captive television channel, Aastha, plays a key part in further
promoting the Baba as well as his products. Recently, the company also started
giving ads in General Entertainment Channels (GEC) like Star and Zee. The ad
agency Mudra has been roped in to develop an expansive promotion strategy. The
company is also looking at Southern regional channels to increase penetration
in the South.
According the Acharya Balkrishna,
the major stakeholder in Patanjali, product development is done based on three principles
--- competitive pricing, purity of raw materials and innovation. Patanjali has
successfully brought down the price of Aloe Vera juice ---one of the key
offerings --- from ₹1200 a
litre to ₹150 a litre by
sourcing directly from the farmers. It has created a revolution in the desi ghee
market, where the end product used to be largely adulterated to earn maximum
profits. Patanjali has brought the consumer trust back into the desi ghee
product, which now accounts for ₹442
Crore or 36 percent of Patanjali’s turnover.
They also successfully made amla
juice and amla candies popular, thereby saving the livelihood of the amla
farmers. It’s herbal toothpaste brand, Dant Kranti, also considered very
effective, brought in revenues of ₹200
Crore in the Financial Year 2014-15. Incidentally, Dant Kranti, is 30% cheaper than
Colgate Active Salt and Dabur Red.
And strategically, most of
Patanjali’s products have been kept cheaper by 15 to 30 percent in comparison
to the competitors. In comparison, Hindustan Unilever’s products are 2 to 2.5
times expensive than the average market price. Patanjali is now getting ready
to launch herbal chocolates, rasgulla, idli-dosa mix and energy drinks, besides
the atta noodles launched to take on Maggi. There are new manufacturing units
being set up in Madhya Pradesh, Gujarat and Rajasthan to ramp up the
production.
The distribution strategy of
Patanjali has also been unique. Initially, they were depending on their own
channels of Super Distributors, Regional Distributors, Chikitsalayas and Arogya
Kendras to sell the products. But the turnover actually increased when they
went for strategic tie-up with retail outlets. Very recently, Patanjali has
tied up with Kishore Biyani promoted Future Group to sell it’s products at Big
Bazaar and other Future Group stores in 245 cities and towns. This is going to give the Baba a big edge in
reaching out to the end customers and consumers in a larger scale.
Unlike the MNC behemoths, Baba
Ramdev doesn’t have an army of highly paid B-School trained marketers to sell
his merchandise. But the word-of-mouth power that he commands seems to be
enough to increase his turnover by leaps and bounds. He doesn’t conduct market
research and test marketing; he just listens to the demands of his bhakts and
launches products as per their need. The FMCG, Cosmetics and Healthcare product
market is growing by 15 to 20 percent; Ramdev Baba’s Patanjali is growing at a
blistering pace of 150 percent. No wonder the FMCG giants are concerned and are
working on counter strategies to sustain their growth.
Despite all the positives, Baba
Ramdev did have his fair share of controversies. His proclamation that Yoga can cure
homosexuality drew a lot of flak from the media and the critics. FSSAI (Food
Safety and Standards Authority of India) was not too pleased when he announced
the launch of Atta noodles without getting the required approvals. The Indian
Medical Association (IMA) has written to the Government demanding strict action
against him for claiming that yoga can cure cancer, diabetes and heart disease.
As per the Drugs and Cosmetics Act, no one can claim complete cure for 54
listed diseases and all these three are included within them. But, all these
have been brushed off as minor faltering in comparison to the mega successes
that he achieved.
Though Ramdev baba is quite
appreciative about his Indian competitors, his is going all out to curb the domination
of the MNC majors in the Indian consumer markets. His objective, he says, is to
instill swadeshi pride so that Indian money does not go out of the country. And,
at this moment, it seems it is Baba Ramdev who is winning the brand war against
his foreign counterparts. He is
launching Powervita to take on Cadbury’s Bournvita and GlaxoSmithKline’s Horlicks.
He is coming out with Yoga Wear and Sports Shoes to counter Nike and Adidas. He
is launching a beauty care line called Saundarya which will directly compete
against Lakme, Avon and Oriflame. No wonder, the MNCs are having sleepless
nights trying to gauge what he will do next to upstage their apple-cart.
