Patanjali, a name synonymous with wellness, health, and purity, is an iconic Indian brand that has captured the hearts of millions of people. Patanjali, founded in 2006 by Baba Ramdev and Acharya Balkrishna, has now become a trusted brand.
Patanjali has been a game changer in the Indian market, revolutionizing the FMCG sector with its focus on natural and ayurvedic ingredients. With an extensive range of products ranging from healthcare, personal care, food, and beverages, Patanjali has become a one-stop-shop for all natural and organic products.
The brand’s slogan “Prakriti ka Ashirwad” (Blessings of Nature) and its vision-mission of promoting natural and healthy living further emphasize Patanjali’s commitment to its customers. The marketing of the company has built an image of creating natural and safe items, making it a go-to brand for individuals looking for such options.
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Strengths in Patanjali SWOT Analysis
1. Baba Ramdev
Baba Ramdev have been a driving force behind Patanjali’s success. The spiritual guru serves as the brand ambassador, his passion for natural living and promotion of Ayurveda has attracted a devoted following of yoga enthusiasts who have eventually become Patanjali customers. His ability to connect with people on a personal level has helped Patanjali become a trusted brand in India.
2. Strong Distribution Channel
As of 30 June 2022, the company had 1,092 Patanjali Chikitsalayas, 3,260 Arogya Kendras, and 305 Patanjali mega stores. The company’s success in creating a strong distribution network has attracted more than 9.82 lakh retail outlets and a network of distributors to engage with the company, creating a virtuous cycle of growth, leading to increased sales and popularity.
3. Ayurveda and Herbal Brand
With its exceptional quality and affordability, Patanjali’s Ayurveda and Herbal brand has transformed the industry. This has created a positive feeling among consumers who value natural and ethical products. Patanjali’s herbal products have grown at an 18% rate over the last few years, demonstrating how it has capitalised on it.
4. Advertising using nationalism
Patanjali’s advertising campaigns have effectively leveraged the nationalism sentiment, evoking an emotional connection with consumers. Its taglines such as #Healthy India banaenge, Patanjali biscuit khaenge, and #Swadeshi ka swabhiman have created a differentiator, promoting the “local for vocal” movement.
This has had a significant impact on the psychology of consumers, leading to a surge in demand for Patanjali’s products. In FY2022, Patanjali’s revenue reached INR 24,282 crore, with a growth rate of 48.32% over the previous year.
5. Affordable pricing of products
Patanjali’s affordability has enabled them to penetrate deeper into India’s rural markets and compete with established multinational FMCG companies. Their focus on providing natural and Ayurvedic products at an affordable price point has resulted in a pricing advantage of up to 30%, resulting in a higher value proposition.
6. High level of consumer engagement
Baba Ramdev’s marketing skills have enabled Patanjali to become one of the fastest growing FMCG brands in India, with high brand visibility and a loyal customer base. He is credited with bringing Yoga to the forefront in India, and his strong social media presence with over 9.72 million subscribers on YouTube, has allowed them to interact with customers directly and receive valuable feedback.
Weaknesses in Patanjali SWOT Analysis
1. Over Diversification of Products
Over diversification of products has led to issues such as inventory wastage and blocking of huge money in inventory for Patanjali. For instance, Patanjali has more than 500 SKUs across 8 product categories. This has also caused other problems such as overproduction, lack of focus on core products, and inefficient use of resources.
2. Less Discounts
Patanjali’s initial marketing strategy included not offering discounts in order to create a differentiation from competing brands. However, in terms of customer satisfaction and perception, this approach did not produce the desired results. FMCG companies, on the other hand, have been successful in attracting customers by offering frequent discounts, resulting in repeat purchases. Ultimately, Patanjali’s decision to not provide discounts has been a weakness that has hindered their growth and success in the Indian FMCG market.
3. International Presence
Patanjali’s lack of global sales is a major weakness, despite its immense popularity in India. In 2022, Patanjali reported international sales of only INR 304.395 crore, which is 1.25% of its total revenue i.e. INR 24,284.38 crore. This can be attributed to the company’s limited network and lack of global marketing strategies.
4. Ecommerce Sales
Patanjali’s lack of digital strategy is a weakness as it has overemphasized offline markets, resulting in lower demand compared to other brands. With less than 5% of its revenue coming from e-commerce sales, Patanjali has failed to tap into the vast potential of online markets.
5. Less Recognition By Youth
Patanjali’s lesser in youth appeal is a potential risk that could harm its future growth prospects. Despite its impressive track record, the brand has failed to connect with the younger generation, who are the market’s future. This could slow its growth rate in the long run and even dent its market share.
6. Controversies & Negative Publicity
Negative publicity has been a weakness for Patanjali, with Baba Ramdev’s controversial statements causing harm to the brand’s reputation. In one instance, his statement to “Buy Ruchi Soya, sit in samadhi” resulted in a warning from SEBI. During the COVID-19 pandemic, his remark that “Allopathy is a stupid and bankrupt science” created a negative public perception and impacted the sales of Patanjali.
Opportunities in Patanjali SWOT Analysis
1. Ayurveda and herbal market
The Ayurveda and herbal market presents a golden opportunity for Patanjali, with a projected market size of $16 billion by 2026 at a CAGR of 15.5%. This growth is further accelerated by new age startups, who are revolutionizing the industry and creating it bigger then ever. Patanjali’s strong R&D and vast experience make it well-equipped to capitalize on this trend. Moreover, with the increasing awareness has led to the downfalls of chemical-led products, consumers are turning towards natural remedies, providing an added advantage to Patanjali.
2. Industry of Packaged Food Retail Market
With the increasing demand for packaged food in India, Patanjali has a huge opportunity to capitalize on this market. The Indian packaged food retail market, estimated at around INR 6,00,000 crore is only about 15% of the total food and grocery retail market. According to Technopak Research, it is expected to reach INR 1,013,000 crore by FY 2024-25, presents an enormous opportunity for Patanjali to expand its reach and become a dominant player in the industry.
3. Preventive Healthcare Segment
Patanjali’s R&D abilities in the preventative healthcare area have positioned the brand for exceptional potential. According to a 2022 EY analysis, India’s nutritional supplement markets are growing at a 15% CAGR, and Patanjali is well positioned to take a major portion of this rapidly increasing market due to its origins in traditional medicinal practises.
4. Soya Market
Within soya product markets, soya chunks have a huge opportunity size. The soya chunks retail market in India is estimated to be around INR 2,000 crore and is expected to jump to INR 3,422 crore by FY 2024-25. While the branded segment is dominated by Company’s Nutrela, the competition primarily comes from unbranded segments.
5. Modern Grocery Stores
Patanjali has over 4600 modern grocery stores across India. It gives the corporation increased control over its products, increasing margins and giving other benefits. Moreover, with an established distribution channel, Patanjali is well-positioned to launch new products in the future, such as organic foods, natural skincare products, and eco-friendly household items.
6. Edible Oil Market
In fiscal year 2022, Edible oil has the second highest sales share of 25% among food products of Patanjali in India. India’s edible oil industry is fragmented wherein 13% of oil is sold as loose/unbranded. The market is estimated to grow to INR 2,38,000 crore by FY 2024-25, with the size of unbranded market at INR 24,000 crore, signaling formalization of the sector with organized players gaining more share from the unorganized sector.
Threats in Patanjali SWOT Analysis
1. Double-Edged Sword
Baba Ramdev has been a double-edged sword for Patanjali, as his controversial statements have led to penalties and legal issues. The company has suffered due to his wrong claims about the effectiveness of certain products and inappropriate remarks about individuals and communities. To maintain its position in the market, the company needs to balance its association with Baba Ramdev and the impact it has on its brand image.
2. Competitive Environment
Patanjali’s remarkable success in the market has led to an increase in competition from established national and international brands. Competing with giants such as Colgate, Amul, HUL, Nestle, and the pharmaceutical industry, who have long experiences and know-how, could pose a serious risk to the brand’s longevity. This could lead to overcapacity and the failure of products, leaving Patanjali in a disastrous position.
3. Cow Ghee
In fiscal year 2022, Patanjali’s cow ghee (clarified butter) has the greatest sales share 29%. Yet, the younger generation’s decreased usage of cow ghee may represent a substantial threat to Patanjali’s market position in the long run. With health-conscious consumers choosing alternate options, the company may find it difficult to attract potential customer and maintain existing ones.
4. Palm Oil Price Volatility
Palm oil price volatility caused by geopolitical issues such as the Russia-Ukraine conflict can pose a significant threat to Patanjali. Since palm oil is a key ingredient in many of its products, price fluctuations can disrupt the company’s supply chain and reduce profitability. Furthermore, government policies and regulatory frameworks can change rapidly, adding to the uncertainty.
Patanjali has come a long way since its inception in 2006. From being a small ayurvedic pharmacy to a multi-billion-dollar enterprise, the journey has been remarkable. Patanjali has been successful in creating a brand image that resonates with customers as being natural, affordable, and trustworthy. It has created a niche for itself in the Indian market by revolutionizing the highly competitive FMCG industry with its focus on natural and Ayurvedic ingredients.
As the world progresses towards a more natural and sustainable way of living, Patanjali is well-positioned to lead the way in the FMCG industry with its commitment to providing affordable, high-quality natural products. Its legacy and brand image, combined with its future prospects, make Patanjali a force to be reckoned with in the ever-evolving FMCG industry.
“Embrace nature, embrace health, embrace Patanjali – the ultimate natural solution.”
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