The holy threat to India’s FMCG companies

– Referrals are driving product trials and adoption – 46% of the respondents began using Patanjali products after recommendations from friends or relatives

– The brand is strongly associated with health – high quality herbal and natural products

– The firm’s toothpaste brand had the highest consumption with 80% of the respondents being satisfied with the product (47% of them were very satisfied)

September 2016: Seldom does a new company become the focal point of discussion at strategy meetings of FMCG giants. A company can take up to several decades to establish itself in the FMCG sector. Yet, Patanjali Ayurved, set up merely a decade ago, is challenging multinational companies such as Nestle, P&G and Unilever. Endorsed by Baba Ramdev – a man dressed in saffron robes and armed with the skills of a yoga master – the company is forcing these multinationals to rethink their business models and marketing strategies.

 

Over the last few years, Patanjali has emerged out of nowhere to become one of India’s leading FMCG brands. The question on everybody’s mind is “Is it sustainable?”

 

Patanjali’s sustainable future growth will depend on customer happiness and quality. This basic question led ValueNotes to conduct a dipstick study in Pune to get a sense of what customers of the brand think about the products. Some of the key findings of our study, titled Patanjali is here to stay! – included:

  • Referrals are driving product trials and adoption – 46% of the respondents began using Patanjali products after recommendations from friends or relatives
  • The early adopters were mostly aged between 45 and 75, and their recommendations carry weight with the younger generation
  • The brand is strongly associated with health – high quality herbal and natural products
  • The firm’s toothpaste brand had the highest consumption with 80% of the respondents being satisfied with the product (47% of them were very satisfied)

 

At this stage one does not know much about Patanjali’s inner workings and profitability, but one thing is for sure – they’re not going away in a hurry.

 

A copy of our research report – titled “Patanjali is here to stay!” – can be downloaded here

 

 

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