Anecdotal evidence suggests that Patanjali Ayurved Ltd may achieve the revenue target of 10,000 crore by March 2017 that was announced with much fanfare by the herbal and natural products company’s promoter and yoga guru Baba Ramdev in April. Part of this assumption stems from the sheer buzz around his products and the demand reported by retailers of packaged goods.

And if you thought that Ramdev’s Patanjali is a north Indian phenomenon—with its manufacturing facilities in Haridwar—think again. A reporter who went back home on a short break to his village in West Bengal returned with a fascinating story of the popularity of Patanjali in the east. The trading hub near his village, 200km from Kolkata, seems to have been taken over by Patanjali Ayurved. Stand-alone stores as well as general shops stocking Patanjali products dot the landscape. Even the biggest cloth merchant in Belda, close to the Odisha border, has split his shop—one half for cloth, the other half for Patanjali’s packaged goods: soaps, biscuits, creams, chyawanprash, amla (Indian gooseberry) juice, ghee and much else. Consumers are increasingly insisting on Patanjali products, forcing local retailers to keep up the supply.

Consumers in Belda and Khalina in West Bengal say they believe in the brand. Ramdev is talking about his products on television so they must be good—he won’t lie, they say. Such faith helped Patanjali’s revenue jump to 2,006 crore in 2014-15, and around 5,000 crore for the year ended 31 March 2016.

The growth in numbers can be attributed to Ramdev’s marketing expertise, too. He’s cannily hid his business acumen behind his saffron robes, sermons on spirituality and yoga, and apparent simplicity. But in Patanjali he’s quietly created a mammoth company spanning a range of product categories. To push these products, he is said to have spent 360 crore on advertising between November 2015 and March 2016 alone. This is borne out by last few months’ data from TV audience measurement agency Broadcast Audience Research Council India which features Patanjali among the biggest advertisers on television in terms of total insertions of commercials.

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To deep-dive into the performance of Pantanjali products in the market, a consulting firm organized several focus groups in metros and tier I cities. (The firm declined to be named as it did not want to be seen commenting on a particular brand.) Clearly, the brand may be popular in West Bengal villages, but it is in demand elsewhere too. The first big insight was that Patanjali Ayurved products are bought mostly by people who have faith in yoga. These consumers are believers in naturopathy. But they are not necessarily followers of Ramdev.

The other discovery was that, contrary to popular perception, not all Patanjali products are cheap. The pricing varies. Ramdev is not playing on price in every category. Patanjali ghee, for instance is priced at a premium. However, in some other categories the products are cheaper by 15-20% compared to rival brands. So Patanjali is not failing the consumer in value proposition.

Although Indians have been veering towards natural and organic products for some years, the rise of Patanjali has given a push to the back-to-basics herbal segment.

What works for Patanjali is the fact that the promoter of the brand is also its brand ambassador, and stands for good health and spirituality. He is offering products that are positioned as being pure. Consumers are increasingly seeking healthy living. Clearly, there is a fit between what Ramdev stands for, what his products offer and what consumers are looking for.

For instance, Ramdev talks of pure ghee derived from cow’s milk. In north India, ghee is still the preferred cooking medium. And he is putting a stamp on it. That’s a big appeal. Patanjali hair oils are positioned as chemical-free, natural products. Such positioning is attractive.

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“But there are categories where people may not buy into his proposition and may not switch to Patanjali. If people don’t find a good-enough reason, they do not move to a new product or brand. In such categories he plays the pricing card, which may or may not work," says Kannan Sitaram, operating partner at India Equity Partners and chief executive of Innovative Foods Ltd. There is somebody at Patanjali who is investing time and energy in drawing up strategies, product by product. “It is not random pricing or product launch," adds Sitaram.

To be sure, there are other brands that have made “Ayurveda" their USP. Delhi-based Dabur India Ltd was built on that proposition. So was Bengaluru-based Himalaya Drug Co. But the difference is that Ramdev and, by extension, Patanjali are seen to be living examples of all that’s natural. Ramdev is the original thing. He is fit, does yoga and promotes non-chemical products. His health messages find resonance in his products. That’s where his appeal lies.

Clearly, Ramdev’s chant may be spiritual but his business mantra spells money, as evident in the spectacular success of Patanjali Ayurved. The yoga guru who’s taught a generation of Indians how to breathe right, seems to be on the right track with a dexterous mix of savvy marketing and smart pricing.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.

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