Ayurveda: The Way Forward? or Not?

Ayurveda: The way forward? Or not?

Over the past few years, Patanjali has been able to display an amazing growth in terms of their revenues. A large part of it comes from the huge product base that it has developed. But what remains debatable is whether the company can manage to show a similar growth in the coming years and topple the existing leaders in the FMCG market.

Given the current scheme of things, it would be really difficult to show a similar trajectory in the coming years and overtake the industry leaders. One of the major reasons for it showing a huge growth in percentage terms has been a low base which has contributed to the high percentage numbers. Also, one more point to be considered over here is its inability to capture the market share. While the company has done wonders in its sales, it has simply not managed to hit a high market share in any of its product segment. Also, the company has not ventured into marketing and advertising but in order to increase its presence across the country, the company will have to undertake this path as well. There are two roadblocks over here – the company without any marketing and advertising costs has a profit margin similar to the industry leaders. The profit margins would fall behind in the case of added marketing and advertising costs, even if we take into account economies of scale. Secondly, the company has been operating from a single manufacturing hub but expanding the distribution towards the entire nation would require better supply chain management.

Also, a lot of Patanjali’s success is borne out of the trust that it enjoys from the Indian consumers and at the same time on the ‘ayurveda’ plank where its products are positioned. With recent events bringing to fore the Patanjali products failing to meet the standard and norms, it is bound to lose out on the position that it enjoys in the product. For a brand which has customer trust at the heart of it, coming to light of events of this sort and banning of products by the authorities will dampen the brand.