Patanjali’s SNAFU ( Situation normal all fucked up)
Mint reports that sales volume of Patanjali’s products is declining.
Mint reports that sales volume of Patanjali’s products is declining.
Why is it so?
It offered discounts for the first time since it entered the market.
Some twenty four items were available at a discount of 5% to 25%.
Discounts were available at Big Bazaar, Amazon and Reliance Fresh.
What does it mean for the new FMCG company?
Patanjali is not able to meet the demand. Its product’s are not available on shops’ shelves. They recently switched from manual processes to SAP.
Rivals such as HUL and Colgate Palmolive have launched herbal products such as Swarna Ved Shakti. Rivals have also challenged Patanjali with their aggressive pricing.
Growth has stalled. In FY 17 their revenue grew from INR 5000 crore to INR 10,000 crore. In FY 18 their revenue remained at INR 10,000 crore.
NDBJ Insight:
Patanjali aims to become India’s biggest FMCG company by 2021. It’s nice to take moonshots, but difficult to build brick and mortar businesses without fundamentals. Traditionally FMCG brands were results of market research, product development, branding and distribution. Patanjali lacks the robust foundation. Other upstarts can learn from Patanjali.
Biggies like HUL and Colgate Palmolive are pioneers and practitioners of the craft. They have more than hundred years of learning and knowledge. They will not let Patanjali win. Patanjali should brace for a long battle, which it will lose with its current strategy and tactics.
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