Sri Sri Ravishankar’s Sriveda Sattva eyes franchisee route to grow retail business
New Delhi: Packaged consumer goods maker Sriveda Sattva Pvt. Ltd, founded by spiritual leader Sri Sri Ravi Shankar, has firmed up plans to leverage the franchisee route for nationwide expansion of its physical retail stores.
Sriveda, formerly known as Sri Sri Ayurveda, is seeking to accelerate growth offline at a time when its rival Patanjali Ayurveda Ltd, founded by yoga guru Baba Ramdev, is banking on the e-commerce channel.
Sriveda has an e-commerce portal, srisritattva.com, and some of its products are available on online marketplaces Amazon and Big Basket.
“We have decided to open the franchisees in three formats for packaged goods and ayurvedic wellness formulations. We’ll have 1,000 franchise outlets nationwide in two years. We hope the franchise stores will generate about Rs500 crore by 2020,” Sriveda chief executive officer of Tej Katpitia, said.
Sri Sri Tattva Mart, the first format spread over 300-400 sq. ft, will showcase and sell its packaged food, personal care and home care products. The second format, namely Sri Sri Tattva Wellness Place, spread over 200-250 sq ft, will be focused on health and wellness. Each of these centres will have an ayurveda doctor to provide a detailed diagnosis and prescribe lifestyle and ayurveda medicines to patients.
Sri Sri Tattva Home and Health, the largest of the three formats, spread over around 600 sq. ft and above, will have the entire range of daily use products as well as medicine and will also house ayurveda doctors, according to the company.
Earlier this month, Patanjali Ayurved, which had more than 10,000 stores selling only its products at the end of 2016, announced arrangements with eight e-commerce companies—Amazon, Flipkart, Paytm, Snapdeal, Grofers, Shopclues, BigBasket, and 1MG—to capture a sizeable slice of India’s estimated $1 billion online market for packaged consumer goods. Patanjali is planning to give a push to its own e-commerce portal.
The online market for packaged consumer goods is projected to jump six times to $6 billion over the next three years, according to a September 2017 report by Google and the Boston Consulting Group.
Sri Sri Tattva, the brand of Sriveda, has a limited online presence through the company’s own website.
Sri Sri Ravishankar ventured into the packaged consumer goods market in 2003, three years before Patanjali Ayurved, was incorporated. Sri Sri sells more than 350 products in segments like health drinks, personal care, home care, fragrances, spices and lately apparels through modern retail stores, general retail outlets and its own website. At present, Sri Sri Tattva products reach across about 200,000 retail outlets.
The company’s best selling products include health drink Ojasvita, herbal toothpaste Sudanta, a ghee made of cow’s milk, and honey. Most Sri Sri products are manufactured in-house at three manufacturing units in India, said Katpitia.
According to Katpitia, Sri Sri Tattva has been growing at more than 100% in terms of revenue. Ayurvedic products account for just around 30% of the company’s sales, while most of the remaining comes from food and personal care products, he added.
Katpitia declined to divulge the company’s total revenue or growth targets. Its rival Patanjali had, on 4 May 2017, said it will cross Rs20,000-25,000 crore in sales by 31 March 2018, from Rs10,561 crore on 31 March 2017, Mint reported.
“It’s not about competing with Patanjali. We are not here to compete. We are here to create our own niche. We never compromise with the quality. And, we are very confident about our beliefs and products that are differentiated,” Katpitia said.
Abneesh Roy, an analyst with brokerage firm Edelweiss Securities Ltd, in a 2016 report noted that Sri Sri has been riding on the brand equity of its founder Sri Sri Ravishankar who has about 370 million followers globally. However, the company saw limited success due to lack of brand visibility.
On 17 October 2017, Mint reported that the company had hired independent media agency Madison Media for media and planning of the Sri Sri Tattva brand for an estimated Rs100 crore. Madison will be responsible for the brand’s advertising across mass media channels including print, television, radio, cinema and outdoor.
The company also exports to more than 35 countries in a limited way. “Global regulatory environment is different. Each country has a different set of regulations and standards. However, we are working on expanding exports to our existing markets besides adding a few more,” Katpitia said.