Case Study: Sri Sri Ayurveda waiting to go the Patanjali way

In the FMCG segment, Patanjali led by Baba Ramdev is seen as the major threat to the other companies. Besides Patanjali, new threats are also emerging. Well, Sri Sri Ravi Shankar of Art of Living is the latest one. After the initial success of the new lineup Patanjali, the other spiritual gurus are expected to join the FMCG space.

The BSE FMCG index has gone down by 11 percent in the last month and many constituents are falling by 23 percent as the aggressive intensity from the growth of Patanjali. This is the time when the FMCG segment is penetrated highly and it is expected to see a very low volume growth.

SSA (Sri Sri Ayurveda) is in a renewed aggression. It is emerging as the major threat to the consumer brands such as Dabur India, Hindustan Unilever, and Nestle. These companies have witnessed a 3 percent drop in their stocks in a month.

Due to the competitive pressure and expensive valuation from Patanjali products, the consumer durable firms such as Colgate Palmolive, Dabur, Emami and Nestle are facing the risk of earnings downgrade.

SSA is starting to make use of the mass media, decent digital presence, and point of sale advertising. In fact, Kishore Biyani of Future Group has expressed his willingness to sell the SSA products similar to the tie-up with Patanjali. SSA is in plans to open more than 2,500 stores all over India and team up with popular retail chains as well to reach a wider consumer base.

Patanjali is a runaway success that is led by the yoga guru’s own brand equity and its wide range of products. The company is all set to clock Rs 5,000 crores revenue by the yea end. As of now, Patanjali and SSA have the strong brand equity of their founders and herbal or ayurveda positioning. Besides this, SSA is lagging behing Patanjali despite the fact that its products span a wider range similar to Patanjali. However, SSA has to go a long way to succeed Patanjali as the latter has already impressed consumers.

It does not mean that SSA might not surpass Patanjali. It is waiting to capitalize on the already successful company, so it might use attractive business practices to do the same.