close
test_template

Patanjali: an Emerging Player in Fmcg Market

download print

About this sample

About this sample

close

Words: 1563 |

Pages: 3|

8 min read

Published: Apr 11, 2019

Words: 1563|Pages: 3|8 min read

Published: Apr 11, 2019

Table of contents

  1. Prologue
  2. Indian FMCG Industry
  3. Major Global Players
  4. Major Indian Players

Prologue

Patanjali started in 1997 as a small pharmacy and today, it is the fastest growing company in the Indian FMCG sector, which was once dominated by multi-national giants like Palmolive, Hindustan Unilever Ltd, Proctor and Gamble, Colgate, Johnson and Johnson, Nestle. Acharya Balkrishna established Patanjali Ayurved Limited (PAL) in the year 2006 taking inspiration from Yogrishi Baba Ramdev with the objective to adopt science of Ayurveda in coordination with the latest technology and ancient wisdom. PAL initially started by manufacturing medicinal products only. Gradually, they expanded their domain from medicine to food items and cosmetics and now clothing line also. It has grown more than ten times in terms of revenue in the last six years which is an unparalled achievement in India’s FMCG sector.

'Why Violent Video Games Shouldn't Be Banned'?

By establishing PAL, Baba Ramdev chose the path of Swadeshi, thereby, providing an indigenous option to buyers and posing a potential threat to the other FMCG companies. In Balkrishna’s words,” Patanjali is not here to threaten anyone, but to turn effort and thought to nurture and develop the science that is present in our tradition and spread it to the benefit of masses….if people do not understand it, it is their folly”.

Balkrishna owns 98.6% of PAL and as of March 2018, has a net worth of US$ 6.1 billion17.

Indian FMCG Industry

Indian FMCG constitutes of staples (pulses, cereals, dairy, edible oils and fats), packaged food, beverages, consumer health, home and personal care products. Historically, the industry has grown at a Compound Annual Growth Rate (CAGR) of 12% and the fastest growing subcategories are packaged food, edible oil and selected segments of home and personal care products. Driven by increasing disposable income, urbanization, nuclearisation and growing workforce, the industry is expected to grow at CAGR of 14% during 2015-2025 (exhibit 1). India’s household income is expected to increase by 1.7 times by 2025 and this presents an attractive growth opportunity for Indian FMCG companiesx. It is expected that the industry will grow at CAGR of approximately 14%, this implies expected increase to 1.8 times by 2020 (≈$110-125Bn) and 3.6 times by 2025 (≈$ 220-240 Bn)y.

Traditionally, many Indian herbal and ayurvedic companies such as Himalaya herbal, Dabur India, Godrej, Jyothy Laboratories, Emami, etc. started operations in FMCG industry with organic products. However, the top market players are MNCs such as HUL, ITC, P&G, Colgate Palmolive, Marico, etc.(Exhibit 2 presents sales turnover of these FMCG companies).

Major Global Players

Hindustan Vanaspati Manufacturing Company was established as the first Indian subsidiary of Unilever in 1931. Later, Lever Brothers India Ltd. Was established in 1933 and United Traders Ltd. In 1935. In 1956, these three companies merged to form Hindustan Unilever Ltd. (HUL)6.. HUL has been the leader in home and personal care products and food and beverages. Some of the most popular household brands across the country like Lifebuoy, Lux, Rin, Surf Excel, Wheel, dove, Pond’s, Lakme, Brook Bond, Kissan, Annapurna, Kwality Wall’s that span the categories of soaps, detergents, personal care, tea & coffee, branded staples, ice-cream and culinary products, are from HUL. The company earned net revenues of INR 31,987 crore with domestic consumer business growth of 4% in FY 2015-16. Gross sales of HUL reached to INR 33,855 crore where soaps and detergents have the highest sales7.

Procter & Gamble Co. (P&G), a global MNC is one of the largest and fastest growing consumer goods companies in India. With trusted brands such as Whisper, Ariel, Vicks, Olay, Tide, Pampers, Gillette, Ambipure, Oral-B, Head & Shoulders, etc., the company has its presence in ‘beauty and grooming’, ‘household, and ‘health and well-being’ segments.

P&G has created 26,000 jobs directly and indirectly with its operations at five plants and nine contract manufacturing sites in India. Sales for FY 2013-14 increased by 22% to INR 2,407 crore as against INR 1,685 crore during the previous year. Feminine Hygiene business recorded strong double-digit growth for 11 consecutive years with all variants of Whisper Sanitary napkins.

Colgate, one of the most trusted and loved oral-care brands in India with its presence of more than 75 years is spreading smiles in India. Over generations, it has become synonymous with toothpaste in India. Expanding from oral care to personal care and home care segment, wide range of products include Colgate active salt, advanced whitening, Colgate mouthwash, kids products, bodywas, skin care, hair care, dishwas,etc.. The company registered a sales growth of 12% to INR 3,954.78 crore from INR 3,544.88 crore in year 2013-14. Total revenues earned by company in year 2014-15 was INR 4,015.12 crore. This has been the most chosen and most trusted brand in India for decades with its quality and reliable products and services, and oral care cetres across the country.

Major Indian Players

ITC has rapidly scaled up its presence in FMCG sector with its diversified fifty plus popular brands through branded packaged foods, lifestyle retailing, personal care products, stationery goods and safety matches. Some of its brands are Sunfeast, Ashirvad, Vivel, Savlon, Fiama Di Wills, Engage, etc.

In the expansion drive in FMCG segment, it has entered into juices and dairy products such as ghee as well. It launched Vivel Ayurveda Essence in Kerala, acquired Shower to Shower and Savlon brands from J&J in India and is expanding its packaged food and personal care business to overcome fall in volume sales of cigarettes. Company’s FMCG business (excluding cigarettes) recorded revenue of INR 9,038 crore during 2014-15 with a growth of 11% over previous year11.

A small Calcutta pharmacy shop with a vision to provide ayurvedic health care products. Dabur became a full-fledged company as Dabur India Pvt. Ltd. In 1936. It has presence across the entire FMCG range of products with distinct business portfolio of personal care, healthcare, home care and food products. Its major brands are Dabur Amla, Dabur Chyawanprash, Vatika, Real, Dabur red toothpaste, Babool, Hajmola, Dabur honey, Dabur glucose, Fem and Odonil. It offers a range of classical ayurvedic medicines and is a leader in herbal digestive products with 90% market share. Dabur honey has market leadership with 75% market share in the branded honey market and Dabur Chyawanprash with 65% market share.

Evolving from Kemco Chemicals, an ayurvedic medicine and cosmetic manufacturing unit that was set up in 1974 in Kolkata, Emami has been serving masses in India for many decades with famous brands like Boroplus, Fair and Handsome, Navratna, Zandu Balm, Kesh King, Fair and Handsome, Fast Relief has leadership position in men’s fairness cream segment with sales growth of 14.8% and market share of 59.1%. In FY 2014-15, consolidated net sales grew by 21.8% and domestic sales grew by 19.1%14.

Baba Ramdev is the brand ambassador and real face of Patanjali. Having gained huge fan following through live yoga camps, Ramdev’s Patanjali is all set to be a billion dollar sales turnover company. India Infoline Finance Limited (IIFL) estimates that in FY 2015-16, Patanjali achieved revenue of INR 5,000 crore, more than many other leading market players such as Colgate, Emami or GlaxoSmithKline, and forecasts revenue of INR20,000 crore for Patanjali by 2020, i.e. two-thirds of what HUL achieved in 2015, which was founded in 188822.

Which was around INR 850 crore a year earlier and INR 450 crore in FY 2011-1220. Referring to the phenomenal growth of Patanjali, experts comment that one of India’s fastest growing business empires is building at a spiritual city of India.

It recognizes farmers as their main assets and provides herbal and organic products on contract farming. Various initiatives are taken for the benefit of farmers to increase their income also to provide a surety towards sale of what they produce.

It (Patanjali) believes in optimum utilization of its capabilities for the betterment of the nation and this is what makes it different from others.

PAL is already present in the markets of the US, Canada, the UK, Russia, Dubai and some European countries, and with a growth rate of 130% it plans to spread farther.

Analysts wonder How Patanjali is managing cost effectiveness with quality control? Patanjali has three manufacturing units in Haridwar equipped with the best machinery and technology. Under its zero wastage technology, whatever is left after usage of raw material is further processed for usage. To ensure best quality products, company has separate R&D departments for each production unit as well as a central R&D facility at Patanjali Food and Herbal Park Limited, one of the biggest world class manufacturing facilities. It intends to keep its process secret hence, scientists working with Patanjali are not allowed to interact with media. It plans to invest another INR 1000 crore for its expansion that includes setting up new production units across the country and also to sharpen its focus on e-commerce and exports27.

Sales and distribution network

The company operates through 47,000 retail counters, 3,500 distributors and warehouses in 18 states with proposed factories in 6 states17. It is a manufacturer of more than 500 world-class products of herbomineral18 healthcare, personal care, dental care, food, cosmetics, medicines and other products19. The company operates under franchise model and distributorship. The company clocked a turnover of about INR 1200 crore for 2013-14.

Get a custom paper now from our expert writers.

Patanjali chooses regional managers from rural household. The demands are placed at Haridwar and are transported through its own transport. There are no intermediaries and therefore cost savings on commissions.

Image of Dr. Oliver Johnson
This essay was reviewed by
Dr. Oliver Johnson

Cite this Essay

Patanjali: An Emerging Player in FMCG Market. (2019, April 10). GradesFixer. Retrieved March 28, 2024, from https://gradesfixer.com/free-essay-examples/patanjali-an-emerging-player-in-fmcg-market/
“Patanjali: An Emerging Player in FMCG Market.” GradesFixer, 10 Apr. 2019, gradesfixer.com/free-essay-examples/patanjali-an-emerging-player-in-fmcg-market/
Patanjali: An Emerging Player in FMCG Market. [online]. Available at: <https://gradesfixer.com/free-essay-examples/patanjali-an-emerging-player-in-fmcg-market/> [Accessed 28 Mar. 2024].
Patanjali: An Emerging Player in FMCG Market [Internet]. GradesFixer. 2019 Apr 10 [cited 2024 Mar 28]. Available from: https://gradesfixer.com/free-essay-examples/patanjali-an-emerging-player-in-fmcg-market/
copy
Keep in mind: This sample was shared by another student.
  • 450+ experts on 30 subjects ready to help
  • Custom essay delivered in as few as 3 hours
Write my essay

Still can’t find what you need?

Browse our vast selection of original essay samples, each expertly formatted and styled

close

Where do you want us to send this sample?

    By clicking “Continue”, you agree to our terms of service and privacy policy.

    close

    Be careful. This essay is not unique

    This essay was donated by a student and is likely to have been used and submitted before

    Download this Sample

    Free samples may contain mistakes and not unique parts

    close

    Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.

    close

    Thanks!

    Please check your inbox.

    We can write you a custom essay that will follow your exact instructions and meet the deadlines. Let's fix your grades together!

    clock-banner-side

    Get Your
    Personalized Essay in 3 Hours or Less!

    exit-popup-close
    We can help you get a better grade and deliver your task on time!
    • Instructions Followed To The Letter
    • Deadlines Met At Every Stage
    • Unique And Plagiarism Free
    Order your paper now