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    Baba Ramdev's Patanjali leaves Ayurveda 'pioneers' like Baidyanath and Vicco behind

    Synopsis

    Kolkata-based Baidyanath, which sells nearly 750 products, meanwhile, says it has no ambition to rival Patanjali, Dabur or Himalaya in the core FMCG segments.

    ET Bureau
    MUMBAI | NEW DELHI: Ameve Sharma left consultancy firm McKinsey & Co about three months ago and is now busy planning the launch of new products, from herbal pain relievers to cough syrups. The third-generation scion of a century-old firm, Baidyanath, is seeking to ride the Ayurveda wave generated by yoga guru Baba Ramdev's Patanjali Ayurved, which has gone beyond traditional products to make use of the business potential of the ancient system of medicine.

    "Our strong brand equity doesn't justify the sales. Unlike Patanjali that entered several categories in mainstream FMCG, we have stuck to classical Ayurvedic products," said the 29-year-old who is targeting annual revenue of Rs 3,000 crore in the next five years, up from the current Rs 650 crore.

    Baidyanath and several others, including Vicco, Sandu, Amrutanjan and Charak, which introduced Indians to Ayurvedic products, haven't been able to capitalise on the market that Patanjali is now cashing in on. These companies, some of them more than a century-old, haven't expanded their portfolio beyond core products in a market pegged at Rs 4,000 crore. The decade-old Patanjali sells products from detergents and toothpaste to ghee, atta and noodles in an FMCG market of Rs 2.5 lakh crore, which offers massive space for expansion.

    "It is totally the Baba factor that's working here," said brand consultant Harish Bijoor. "Baba Ramdev has hijacked Ayurveda for sure, and since he has done it first, he now has ownership of the Ayurveda association. No one can take that away from him."

    The success of Baba Ramdev in business is inspiring gurus such as Sri Sri Ravi Shankar, Sadhguru Jaggi Vasudev, Ram Rahim as well as Aurobindo Ashram to enter the consumer segment with Ayurveda-centric products. Experts say the market for pure Ayurvedic or herbal products is still small even for Patanjali. Patanjali sells around 500 products, such as medicinal products. But ghee accounts for the largest share in revenue at 30-35%. Healthcare is next at just 20%, where it competes with traditional players.


    Image article boday

    Kolkata-based Baidyanath, which sells nearly 750 products, meanwhile, says it has no ambition to rival Patanjali, Dabur or Himalaya in the core FMCG segments. "We have been here for 100 years and want to survive another century in a sustainable way. No point getting into all FMCG segments and be a fringe player," said Sharma.

    So, what did Patanjali that started in 1997 as a small pharmacy in the holy town of Haridwar do differently? For one, the company expanded its reach from 200 Patanjali outlets in 2014 to 5,000 franchise stores currently and launched more than two dozen mainstream FMCG products as none of the existing herbal players catered to categories such as noodles, oats and detergents.

    "What we have done is consistently focused on quality and pricing. Ask consumers about our product quality.

    Why are repeat purchases coming? It's because of the quality we are offering consumers," said SK Tijarawala, spokesperson of Patanjali Ayurveda. "As far as pricing is concerned, we are trying to give consumers the best possible prices.

    There is no incremental pricing." While no one is denying the Baba effect, some industry insiders expect the big companies with FMCG exposure to benefit more from it.

    "Patanjali has helped generate excitement around the overall personal and healthcare category which has been driven by large players with bigger financial muscle and clout," said Pradeep Multani, general secretary of the Association of Manufacturers of Ayurvedic Medicines.


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