Godman Baba Ramdev-promoted Patanjali Ayurved announced the expansion of its ecommerce operations in a bid to boost its reach etailing segment. The Haridwar-based FMCG brand entered into agreements with Amazon, Flipkart, ShopClues, Paytm Mall, 1MG, NetMed, Bigbasket and Grofers to sell its products on their platforms. The fact that all the platforms are either foreign-owned or have major foreign investment doesn’t seem to have affected the decision, despite Patanjali’s frequent portrayal of itself as a ‘Swadeshi’ brand.
Patanjali Ayurved said in a statement that its own e-commerce platform patanjaliayurved.net “yielded good dividend and response at trial stage itself” with online sales crossing the ₹10 crore mark in December. The company says its latest push aims to take its products from “Haridwar to Har Dwar” (from Haridwar to every doorstep).
“We believe our partnerships with e-commerce platforms will help increase the reach of Patanjali products to more and more consumers in urban and rural regions,” Ramdev said in a statement, adding that Patanjali targets to generate more than ₹1,000 crore from the e-commerce channel in the first year.
While making the announcement, Ramdev stated that Patanjali products will be sold across e-commerce portals at the maximum retail price and not at discounts.
“Also, it will not have a negative impact on traditional sales channels. We are also focusing on growing offline distribution. At the same time, we will be launching Patanjali loyalty programme later this month at the exclusive brand stores,” Ramdev added.
With the associations with the e-commerce companies, Ramdev said Patanjali hopes to settle at least 1 million orders every day. The company estimates that online sales will account for around 15% of the company’s total revenue over the next few years.
FMCG and online retail
In a September 2017 report, Boston Consulting Group and Google estimated that about 40% of all fast moving consumer goods (FMCG) purchases in India will go online by 2020, making it a $5–6 billion business. The current share of online of total FMCG purchases in India is in low single digits.
Patanjali has become a giant in the Indian fast moving consumer goods (FMCG) sector, with a turnover of ₹10,561 crore in the fiscal year 2017. It stands second in the category only after Hindustan Unilever, above long-established companies such as Nestle India (₹9,159 crore), Godrej Consumer Products (₹9,134 crore) and Dabur (₹7,691 crore). Patanjali says it aims to double its turnover in the fiscal year 2018. It was also ranked as India’s most trusted Fast Moving Consumer Goods (FMCG) Brand by the Brand Trust Report India Study 2017.
Besides FMCG, Patanjali Ayurved is present in other sectors such as education and healthcare. In December 2017, Patanjali also announced its entry into solar power equipment manufacturing, with plans to invest around ₹100 crore in the sector.
With Patanjali’s success, other players are also pushing to capture a share of the Ayurvedic/herbal goods sector. Most recently, spiritual guru Sri Sri Ravi Shankar announced that his wellness brand Sri Sri Ayurveda will establish 1000 branded stores across India by 2020 to sell FMCG products, prescription medicine, and Ayurveda items.
Hindustan Unilever is also pushing its brand Lever Ayush that caters Ayurvedic personal care products. FMCG giant Dabur also pitches itself as an Ayurvedic company while Himalaya sells herbal products in the personal and healthcare segments.